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As Vice President Kamala Harris‘ odds improve ahead of the 2024 presidential election, observers expect a promising rebound in the U.S. residential solar market.
The Invesco Solar ETF (NYSE:TAN), a barometer of the solar energy market, gained over 3% in pre-market trading, following the consensus that Harris won Tuesday’s debate against Republican nominee Donald Trump.
Roughly 27.67% of the TAN portfolio is comprised of three stocks: Enphase Energy Inc (NASDAQ:ENPH), SolarEdge Technologies Inc (NASDAQ:SEDG), and Sunrun Inc (NASDAQ:RUN).
Invesco Solar is down 28.94% for the past year, and about 24% year-to-date. But demand is improving, with industry leaders expecting double-digit growth by 2025.
Under the Biden administration, U.S. oil production rose to new all-time highs. Clean energy stocks also thrived, partially due to the Inflation Reduction Act, which provides crucial tax credits for the sector.
With Harris being a strong supporter of clean energy, the current odds are a positive catalyst for the sector.
Moreover, insights from JPMorgan's Mark Strouse, following the RE+ renewables industry conference, point to potential strong growth—though global challenges persist.
The solar giants are optimistic about the U.S. market's recovery, driven by stable utility pricing, lower interest rates, and increased capacity eligible for domestic content tax credits.
According to Strouse, “Each company expressed optimism regarding double-digit U.S. market growth in 2025.”
However, Europe continues to lag, particularly in the Netherlands, where demand has dropped by 70-80% year-over-year due to uncertainty around net metering policies, he said.
Strouse also noted that Enphase and SolarEdge received a significant boost as their microinverters and inverters now qualify for a 36% domestic content ITC adder.
Enphase expects this to improve margins, while SolarEdge anticipates a neutral impact. Both companies, he said, are optimistic about upcoming storage solutions, despite increased competition from Tesla Inc‘s (NASDAQ:TSLA) Powerwall 3.
Read Also: Tesla Energy Highlights Texas Battery Power Milestone: Could Powerwall Have Moment In Spotlight?
Meanwhile, Strouse also notes that Sunrun and Sunnova Energy International Inc (NYSE:NOVA) are keeping an eye on financing spreads, which may widen after SunPower Corp‘s (OTCEM: SPWRQ) recent bankruptcy filing.
Nevertheless, with declining base rates, the overall cost of debt for industry leaders is expected to improve over time.
As Europe lags, U.S. solar demand is poised to rise, with Enphase, SolarEdge, and Sunrun leading the charge in a recovering market.
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