Wow – What a day Tuesday was, huh? I will leave most of the political out of this, mostly because it doesn’t belong here. What is relevant here, though, is how will this election affect the solar industry today and going forward?
When trying to project the future of a product, I head immediately to the stock market. People smarter than me act immediately on things like this. Let’s look at Wednesday, 11/9/16, results of some well-known solar companies.
SolarCity (SCTY) = -4%
Vivent (VSLR) = -6.2%
Canadian Solar (CSIQ) = -13.4%
SolarEdge (SEDG) = – 5.4%
SunPower (SPWR) = -14%
It wasn’t a good day to be invested in solar stocks as a whole, especially if you favor those on foreign soil. It was ugly, but not a complete disaster (except Canadian Solar), as solar is pretty volatile anyway. But overall, those people that are paid to evaluate the future of public companies and those with shares thought this was bad news from Washington.
One of Donald Trump’s main talking points throughout the year was that we (Americans) were losing jobs to outside countries, and he was going to bring the jobs back. Looking back at the stock market performance, I think we can see part of this in play. All solar stocks took a hit, as Trump is most likely a coal guy (more on this later), but the companies outside of the US got hit harder. Is this maybe going to be good news for Solarworld, Suniva, and other US manufacturers? Perhaps.
Donald Trump is thought (known?) to be into more traditional energy, like oil, gas, and coal. In fact, Trump has vowed to revive the coal industry as one way to create more American jobs and drive the economy. This seems to be neutral at best for solar, but if there is dollar shuffling to support one industry or the other, it seems traditional would get this support.
So where are we? We know that Trump favors more traditional energy sources and jobs, as well as Wall Street reacting very negatively to Trump heading to the White House. Are we doomed? Is the tax credit going to be torn up? Well, one place I keep coming back to is JOBS. Donald Trump wants to create jobs. Solar creates jobs! Let’s dig in:
According to the National Solar Jobs Census, solar is adding workers at a rate of nearly 12 times faster than the overall economy! Solar industry employment has grown by 123% in the past 6 years, or >115K jobs! That is significant. Solar had a 20.2% growth rate from 2014 to 2015, and was expected to continue a similar increase from 2015 to 2016! JOBS! This is a big advantage for solar – Trump and his advisors must evaluate the cost and resulting job creation from solar versus the cost and job creation in other energy sectors. Basically, even if it is a wash in cost, does it make sense to eliminate X number of jobs in solar to increase by the same X somewhere else? It seems like solar is a proven growing industry, providing US jobs, and sure doesn’t seem to be low hanging fruit.
One more large issue – the elephant in the room – is the ITC. As you most likely know, Congress voted to extend the ITC through 2019, with decreased returns in 2020 and again in 2021. This federal tax credit is responsible for helping offset the large initial cost of solar installations, thus driving the market. Will Trump tear it up entirely? End it early? I think at this point, there is no way to know. We do know it creates a lot of jobs, so we have that in our corner. But, yeah, eliminating that sure would put a damper on things.
For anyone to predict what Donald Trump is going to do in the White House is just guessing at this point. I have seen some other sites use this as a way to drive sales by using the Trump start day as a deadline. We are not going to push this agenda, though we are more than happy to help you if you are thinking this way. I think we are just trying to make sense of it all, and use the information at our disposal to try to make educated decisions about tomorrow and the next.
Thank you for visiting Tandem Solar.