Things were looking up for the U.S. solar-power industry. The Inflation Reduction Act, the climate legislation that passed in August 2022, boosted the savings of anyone looking to go solar, among its several clean-energy incentives.
Just about every major U.S. solar company had big quarterly misses. Invesco Solar ETF TAN is down nearly 40% this year, contrasting with gains of around 14% for the S&P 500 index SPX. The “new normal” for solar companies is likely to be annual growth of around 15% compound annual growth rate, thanks to “the large public companies with strong liquidity on hand to take share and grow at a faster pace,” the analyst said.
Distributors are working through high levels of inventories, which they bought at higher prices than current prices. Then there’s California. The state, which long has been the No. 1 state by cumulative solar capacity installed, implemented late last year a new way to calculate how much homeowners get from their utility company for the excess solar power they send back to the grid.
And as SolarEdge showed, another solar powerhouse, Europe, also faces a slowdown among macroeconomic concerns.