The Silicon Valley Bank crisis is creating attractive entry points in residential solar stocks Sunrun and Sunnova Energy International , according to Wells Fargo. "Weakness in resi-solar driven by the SVB crisis is a buying opportunity," analyst Michael Blum said to clients in a note. While fears of contagion risk have caused regional banks to pull back, the greater likelihood of a pause in interest rate hikes from the Federal Reserve is a boon for solar stocks.
Further, in light of a potential banking crisis, the Fed could pause rate hikes, which would reduce the cost of financing for resi-solar names, a key driver of performance," the analyst said. At the same time, while consultants expect the U.S. residential solar sector could fall by 2% in 2023, Blum forecasts the biggest solar companies could hit their 2023 guidance by expanding market share by just 8%.