Renewable Stocks Shaken by Greek Woes as Investors Shun RiskEhren Goossens
Clean energy stocks plunged this week amid concerns of a Greek default, a slower Chinese economy and a U.S. court ruling that could keep more coal-fired power plants operating.
Since Friday’s close, the WilderHill New Energy Global Innovation Index declined 3 percent while the Bloomberg Intelligence Global Large Solar Energy Valuation Peers Index is off 3.4 percent. Those drops exceed the broader S&P 500 index, which has dipped 1.8 percent over the same period.
Solar stocks “tend to outperform when the market is going up and underperform when it’s going down,” said Pavel Molchanov, an analyst at Raymond James Financial Inc. in Houston.
Greece closed banks and imposed capital controls after its prime minister called for a July 5 referendum on austerity measures demanded by creditors, pushing stocks lower worldwide.
Clean energy investors are also reacting to “concerns around potential rate increases” and a ruling Monday by the U.S. Supreme Court blocking certain Environmental Protection Agency rules on coal-fired power plants, Ben Kallo, an analyst with Robert W Baird & Co. in San Francisco, said by e-mail.
“We believe this is short-term volatility,” he said. “Demand for renewables will continue to increase in the U.S.”
On Saturday, China’s central bank cut its benchmark lending rate to a record low after the biggest two-week plunge in the company’s stock market since December 1996.
“It is now time to reassess the risks in what is perceived as a ‘state-sponsored’ bull-market,” Shen Jianguang, a Hong Kong-based analyst for Mizuho Securities Asia Ltd., said Tuesday in a research note.
Solar companies, meanwhile, are going about business as usual. Sunrun Inc. filed last week with regulators to raise as much as $100 million in an initial public offering. JinkoSolar Holding Co., a Chinese solar manufacturer that’s fallen 3.3 percent since Friday, announced Tuesday an expanded credit agreement that doubled its credit limit to $40 million.
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