Readers have been well-informed about the collapse of the green energy bubble over the last several quarters, with solar, hydrogen, and wind stocks imploding. The primary driver of this downturn has been high inflation and elevated interest rates, which have decimated demand for solar and wind projects in the US and across Europe. The much-hyped green transition ushered in by the Biden administration is unraveling as quickly as Biden's presidential election odds.
The latest mess in the green space comes from a research note on Thursday supplied to clients by Roth MKM. Analyst Philip Shen cited a letter from SunPower to dealers that explained as of Sept. 17, it "will no longer be supporting new leases and PPA sales, nor new project installations."
The letter continued, "We continue to dedicate our attention to addressing our financial position and are actively working to navigate our current challenges."
Bloomberg said SunPower confirmed the letter in Shen's. However, there are lingering questions about how long the suspension of installations will last.
"They are essentially saying that they're not able to continue operations," said Pol Lezcano, an analyst with BloombergNEF.
JPMorgan Chase analyst Mark Strouse said the suspension will not be resolved quickly: "We do not believe this is a temporary halt, but rather an indefinite suspension of SPWR's future dealings."
Bloomberg pointed out, "The notice comes after the company said in April it needs to restate almost two years of financial results. It also replaced its chief executive officer and chief operating officer, defaulted on a credit agreement in late 2023 after an earlier earnings revision, and is grappling with an installation slump in California — its home state and the country's biggest solar market."
In markets, shares of SunPower crashed as much as 40% on Thursday, with shares tumbling 12% lower in premarket trading to around $1.33 a share.
Over the last three years, iShares Global Clean Energy ETF (ICLN) has plunged 37%, while Goldman's MAG7 index has surged 47%.
In November, a Bloomberg MLIV Pulse survey of over 600 professional and retail investors revealed that more than half anticipate the downturn in green energy stocks will persist into 2024. Certainly, this has been the case, as there have been no notable analysts we follow calling for dip buying in solar, wind, and hydrogen stocks (yet).
Earlier this year, Senators Elizabeth Warren and Sheldon Whitehouse, both climate alarmist Democrats, penned a letter to Fed Chair Jerome Powell requesting an immediate halt to the interest rate hiking cycle to avert further collapse of the renewable infrastructure space.
In the letter, first obtained by Bloomberg in mid-March, Warren and Whitehouse warned that interest rate hikes have "completely tanked major renewable infrastructure projects across the country." Or perhaps, 'tanked' their stock accounts...
Powell's interest rate hikes have derailed the Democrats' dream of renewable power to save the planet. Even JPMorgan has acknowledged this, calling for a "reality check."
Much of the solar and wind is unreliable and unstable for supplying power to AI data centers, and that's why we've informed readers in recent years, as well as several months ago in the 'powering up America' theme, that nuclear is the best bet for clean, reliable energy to power the rapid electrification of the economy.
