Clean Energy Shares Hardly Move As Trump Pulls Out of Paris Deal
BLOOMBERG — Solar stocks barely budged after the announcement Thursday. The Bloomberg Intelligence Global Large Solar Energy Valuation index of 16 companies gained 0.8 percent at the close in New York.
JinkoSolar Holding Co., the world’s biggest panel producer, climbed 2.7 percent, and that was one of the bigger swings.
Canadian Solar Inc., the top North American supplier, gained 0.8 percent, and U.S. rival SunPower Corp. rose 1.5 percent. Seoul-based Hanwha Q Cells Co. posted one of the larger losses, and that was just 2.1 percent.
The muted response is a sign that investors expect demand for clean energy will continue to grow, in the U.S and around the world.
“Trying to make a short trade on a long-term trend is risky,” SunPower Chief Executive Officer Tom Werner said in an interview Thursday.
The reaction followed a more volatile Wednesday, suggesting that investors have already moved beyond their gut reactions, said Joseph Osha, a San Francisco-based analyst at JMP Securities LLC.
Most solar shares declined, with Canadian Solar and JinkoSolar both down more than 5 percent, on the first reports that Trump intended to withdraw the U.S. from the Paris agreement.
“It’s sentiment,” Angelo Zino, a New York-based analyst at CFRA Research, said in an interview Thursday. “Will Trump exiting the Paris-climate accord have an impact on solar demand in the next nine to 12 months? Probably not.”
Michael Liebreich, the London-based founder of Bloomberg New Energy Finance, put it another way: the Paris accord is “nothing more than an international framework for discussion and expectation-setting. There’s nothing binding about Paris other than discussions.”
In the U.S., federal tax credits and state-level renewables mandates have been key drivers of wind and solar growth. It’s not clear how Trump’s plan will affect these policies, if at all.
“The U.S. is so hedged around the initiatives at the state level,” Liebreich said in an interview Thursday. “As long as those are not dismantled on an accelerated time frame, nothing appreciably will change.”
Still, a broad U.S. shift away from efforts to curb emissions may eventually weigh on state-level renewable targets, Paul Coster, a New York-based analyst at JPMorgan Chase & Co., said in a research note Thursday.
“Innovation throughout distributed energy and storage is an irreversible trend that’s gaining momentum,” said Jeffrey Eckel, chairman and chief executive officer at Hannon Armstrong Sustainable Infrastructure Capital Inc., an Annapolis, Maryland-based financier of energy efficiency and renewable-energy projects. “You sell on rumors and buy on the news.”
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