What was the big rally in solar stocks after the debate all about?

This week, shares of solar energy companies enjoyed a sharp rise in the wake of the presidential debate between Donald Trump and Kamala Harris. Some companies posted double-digit gains the day after the debate — because analysts decided the showdown would tip the balance in favor of the Democratic candidate.

“We expect a near-term rebound from Vice President Harris following the first debate with former President Trump, but the long-term impact remains unclear,” CNBC analyst Ed Mills quoted Raymond James as saying. said CNBC.

There appears to be a “general view that Harris has won the debate,” Alvin Tan, head of Asia FX strategy at RBC Capital Markets, said Reuters. “Obviously not a slam dunk for Harris, but the odds of a Trump victory have gone down a bit.”

Some, however, are more confident that the debate was a victory for Harris. “The US presidential debate achieved its goal by giving a decisive advantage to one of the candidates in what was an exceptionally close race,” Charu Chanana, Head of FX Strategy and Global Market Strategist at Saxo, told Reuters. “Crypto and energy stocks could face headwinds as market sentiment adjusts to changing political dynamics.”

Indeed, FirstSolar shares gained as much as 15% the day after the debate, while Sunrun added about 11.5% and SolarEdge rose 8.5%. A major of four industries, Sunnova, gained 6.2%. Solar energy ETFs also enjoyed gains in the immediate aftermath of the Trump-Harris debate. The question, however, is how long it would enjoy higher ratings.

Sunnova, while gaining 6.2% this Wednesday, is down per week and also down year-to-date. It has also fallen over the past 12 months. First Solar, on the other hand, has enjoyed steady growth in its share price over the past year. Not so for Sunrun, which is down slightly year-to-date but is up about 37% over the past 12 months.

Solar companies would certainly benefit from another transition-friendly federal government. That’s why energy stocks are down, after all. If Wall Street says Harris won the debate, that’s good news for solar developers.

It’s also automatically bad news for Chevron and Exxon, even though the Democratic nominee has changed her position on the key issue of fracking, reiterating at the debate that she won’t ban it. At the same time, the Republican candidate said he is “a fan of solar.”

“We’re going to go back to windmills and we’re going to go back to solar, where they need a whole desert to get some energy,” Trump said during the debate. “Have you ever seen a solar plant? I’m a big solar fan by the way.”

The election is still two months away — or maybe just two months — but the stock market movements immediately after are a preview of what will happen in the stock market once the votes are counted. Meanwhile, solar continue to lead in new generation capacity additions – and Californians are seeing their electric bills drop higher and higher.

“I am proud that, as vice president, over the past four years, we have invested a trillion dollars in a clean energy economy while also increasing domestic gas production to historic levels,” Kamala Harris said during the debate.

Indeed, a lot of money was spent on the transition and a solid chunk of it on solar subsidies to get the ball rolling. It holds, although the momentum is starting to slow – and some companies are equal going under. Among them is one of the biggest players in the field: SunPower DEPOSIT for Chapter 11 protection last month. The reason appears to be oversupply and sluggish demand. It would be interesting to see if a friendly president in the White House could do anything about it, given that the bear trend has played out during a Democratic presidency that is giving all the support possible to the industry.

By Irina Slav for Oilprice.com

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