TPI Composites (NASDAQ:TPIC) -11%, Maxeon Solar Technologies (NASDAQ:MAXN) -6.8% and Clean Energy Fuels (NASDAQ:CLNE) -2.5% in Tuesday’s trading after Raymond James downgraded the stocks following their huge rallies after the Inflation Reduction Act package was announced.
TPI Composites (TPIC) and Maxeon Solar (MAXN) ran up in response to the bill, “even though it will take a long time for the bill’s benefits show up in financials, and the magnitude of those benefits remains hazy,” analyst Pavel Molchanov said, while Clean Energy Fuels (CLNE) “also rallied, appropriately pricing in the immediate uplift in profitability,” and the stock has now reached fair value.
TPI’s (TPIC) Iowa blade manufacturing plant has been “essentially mothballed” since the end of 2021; with the bill’s new incentives, the plant likely will be restarted but Molchanov noted there is no timetable for doing so and no clarity on how much production can be expected.
Maxeon (MAXN) has no U.S. manufacturing operations at all, and siting, planning and construction will take considerable time – 2024 or 2025, the analyst estimated.
Many solar and clean energy stocks have been ripping to YTD highs in recent weeks as the Inflation Reduction Act, which includes $369B in spending on climate and energy policies and was passed Friday by the U.S. House.