Shares in First Solar, one of the largest US solar panel manufacturers, rose sharply today, climbing more than 8% in early trading on the Nasdaq. The jump came after reports suggested the Biden administration is preparing to finalise tax credit rules that would benefit domestic solar production, alongside growing demand from utility-scale projects.
The move pushed First Solar's stock to around $230, its highest level in weeks, and lifted the wider Invesco Solar ETF by over 3%. Analysts pointed to the company's strong position in the US market, where it benefits from both federal incentives and protectionist tariffs on imported panels. 'First Solar is a key beneficiary of the Inflation Reduction Act and the ongoing push for energy security,' said one analyst.
For UK investors, the rally has spillover effects. London-listed renewable energy investment trusts, such as Greencoat UK Wind and The Renewables Infrastructure Group, saw modest gains in early trade. However, direct exposure to First Solar is limited among UK pension funds, which tend to favour diversified global equity funds.
The broader context is a global shift towards clean energy, with solar capacity expected to double by 2028. Yet UK investors should be aware that solar stocks remain volatile, sensitive to interest rate changes and policy shifts. The sector has underperformed the wider market in 2024, but today's news highlights the potential for sharp rebounds when regulatory clarity emerges.
Source: Reuters, Bloomberg