Solar stocks haven’t been having a great run of things lately, and recent news isn’t providing much help. In fact, several solar stocks are trading down in Tuesday afternoon’s trading session. What prompted this industry-wide slip? News about subsidies for homeowners and factories. The reports noted that planned federal subsidies, designed to get more plants opened in the United States that would build solar panels, simply wouldn’t be enough to offset the savings realized by Chinese imports.
While the federal government was set to offer a subsidy of $0.07 per watt produced, prices for panels are set to hit somewhere around $0.16 per watt by the end of 2025. As a result, First Solar (NASDAQ:FSLR) is down just over 2%, while SolarEdge (NASDAQ:SEDG) is down a bit over 3%. Enphase Energy (NASDAQ:ENPH) slid over 7%, and Sunnova Energy (NYSE:NOVA) crashed nearly 8.5%. The worst hit, though, was Sunrun (NASDAQ:RUN), cratering at just under 9.5% in Tuesday afternoon’s session.
Solar Market Impacted by Economic Challenges
There was some good news in home solar in 2023; the United States added a hefty 32.4 gigawatts of solar capacity in 2023. That was a 37% increase over the record set in 2021 and represented a 51% rise in capacity from 2022. However, rising economic challenges are proving a setback to solar additions. The loss of several incentives in the California market—one of the biggest such markets due to its accommodating weather—won’t help matters here either.
Which Solar Stocks Are a Good Buy Right Now?
Turning to Wall Street, the laggard in the solar field is ENPH stock. With an average price target of $130.64, this Moderate Buy-rated stock offers investors an upside potential of just 9.25%. Meanwhile, NOVA stock is the leader here, as this Moderate Buy with an average price target of $16.60 yields a hefty 240.16% upside potential.
