Potential Rate Cuts Could Give Solar Industry a Boost

Solar power companies like SolarEdge Technologies and Sunrun may see a brighter future as Wall Street predicts interest rates could drop by September. The Federal Reserve's current high rate has made borrowing costly, stifling financing for the residential solar sector. A reduction in interest rates would likely ease borrowing for homeowners financing solar installations and for companies leasing solar equipment to homeowners who opt to go the leasing route.

Shares of SolarEdge have plummeted 76% in 2024, contrasting with the rising stocks of traditional energy giants like Exxon and Chevron. The residential solar industry is also navigating new regulations in California, which has reduced the value of electricity generated by rooftop solar systems. The Solar Energy Industries Association projects 2024 to remain weak, with the first quarter identified as the weakest in two years, partly due to these regulatory changes.

Adding to the challenges, SunPower filed for bankruptcy after its stock tumbled 73% in 2023 and fell another 90% in 2024. SolarEdge also announced the layoff of 400 employees in July, following a customer bankruptcy that left an $11.4 million debt unpaid. Despite an overall sector decline, FirstSolar has proved an exception and thrived due to subsidies from the Inflation Reduction Act. Solar energy had been expected to boom in 2024, with the Energy Information Administration forecasting US solar power generation to grow 75% between 2023 and 2025. (This story was generated by Newser's AI chatbot. Source: the AP)