Solar industry stocks jumped in early trading today/yesterday, lifted by Joe Biden’s election victory and Pfizer’s Covid-19 vaccine news, but early excitement faded and most solar stocks closed down on the day.
For the solar industry, enthusiasm for Biden administration policies that advance clean energy and incorporate environmental justice runs high, but risks related to Xinjiang forced labor issues linger.
A large percentage of solar modules used in the U.S. likely include some amount of polysilicon that has been produced in China’s Xinjiang province, a region that the State Department in July flagged for possibly having forced labor in its supply chain.
On the Xinjiang issues, potential action could come from either U.S. Customs and Border Protection agency near-term with company-specific Withhold Release Orders or from legislation being passed with a funding bill due December 11th or both, Roth Capital said in a research note last week.
“We are not making the call that there is or is not forced labor in the solar manufacturing supply chain. Rather, we are highlighting that there is non-trivial and growing risk… [It] may require the industry to certify that there is no forced labor in the value chain,” Roth Capital said in an industry note in mid-October.
“The solar industry needs to get out in front of this issue. The risk of forced labor in the solar supply chain is not a good look, particularly considering the growing importance of ESG,” Roth Capital pointed out in a summary of a Webinar on the Xinjiang Uyghur risk for the solar industry that it hosted last month.
On Monday, Enphase Energy closed up 2.87% at $98.50 a share. Other major solar stocks, including SolarEdge Technologies, SunPower, First Solar, Tesla, Sunrun, Sunnova and Array Technologies all closed down on the day.
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