what happened
The day started hot for renewable energy stocks, with several stocks rising more than 10%. A major catalyst was that President Trump signed the newly adopted stimulus bill over the weekend after threatening to veto it. But the excitement over the signing soon increased.
The most important of today were shares of Blink loading (NASDAQ: BLNK), which climbed to 13.4%; Plug power (NASDAQ: PLUG), as much as 5.4% up; ReneSola (NYSE: SOL), with 29.3%; and Eos Energy Enterprises (NASDAQ: EOSE), with 20.4% higher.
In the end, Blink and Plug Power returned all their profits and ended the day with 5.3% and 5.6% respectively, while ReneSola (28.9%) and Eos (16.9%) closed higher.
Image Source: Getty Images.
Approximately
From a policy perspective, solar developers get a two-year extension of the investment tax credit at 26%. It also focuses on energy storage projects that are also linked to solar power projects, which can help Eos Energy Enterprises.
$ 1.08 billion has also been allocated to energy storage for research and development, and there are also funds for modernizing grids that can also be used through storage projects. All in all, the fact that the stimulus was officially signed is probably good news for a solar power developer like ReneSola and a battery company like Eos Energy Enterprises.
The impact on hydrogen and electric vehicles is minimal, and that’s probably why Blink Charging’s and Plug Power’s pops did not hold up today. There may be a small benefit from more renewable energy installations or R&D funding that goes wider to alternative energy, but direct subsidies have not been added or extended for their businesses.
Now what
Shares for renewable energy have taken a strong lead over the past six months as investors cheered on the combination of a Biden presidency, low interest rates and greater attention to all forms of alternative energy, such as solar and electric vehicles. But by the end of 2020, the hype will have to turn to fundamental improvements for these energy supplies.
What I’ll be looking at next year is how these companies are converting their higher share prices into growth. Blink Charging needs to grow its charger network fast, and Plug Power needs to increase hardware and hydrogen fuel sales to keep investors happy.
For ReneSola and Eos Energy, the project cycle is long, but we can expect the backlog of projects they are working on to grow rapidly. If they do not, these stocks can be disappointing for investors. For today, there was one last step higher than the year-end.