U.S. Solar Sector Stocks Could Shoot Up in 2021

With the elections finalised and Joe Biden firmly proceeding into office, the solar sector, as well as other renewable energy sectors, are in high hopes at the expectation of better days under a much more supportive government.

Although his senate is Republican-dominated, Biden’s government can still carry out several executive actions and changes in personnel that will have a notable impact on the renewable energy sector, especially the solar sector.

The solar sector has loomed as the best performing corner of the clean energy universe during the pandemic and thereafter continued to shine after Biden was declared president-elect.

Here are the major reasons why solar stocks are seeing a dynamic growth path

Trump’s administration implemented the elimination of solar tariffs in January 2018 on the imported cells and modules at the height of the trade war with China. This caused severe harm to the solar sector. According to the Hill, the 2018 solar tariffs have significantly affected the U.S. solar sector by destroying more than sixty-two thousand (62,000) jobs and nearly $19 billion in new private sector investments. The tariffs made some imported solar panels more expensive, with the price of high-efficiency PERC (Passivated Emitter Rear Cell) modules nearly doubling in the United States compared to prices in other markets.

That the U.S. solar sector has continued to prosper in spite of the tariffs reveals how strong the solar momentum has grown. One of the first pieces of business expected for Biden is to order the International Trade Commission to evaluate these tariffs and possibly annul them considering the damage they have brought to the country’s solar industry.

Another factor is the possible elimination of fossil-fuel subsidies. For years, the fossil-fuel industries have enjoyed an estimate of twenty billion dollars a year in both direct and indirect subsidies they receive from the government. However, Biden has already pledged to cut down or completely remove those subsidies and channel the funds to renewables. This is much likely to provide solar and other renewables an opportunity to thrive.

Interestingly, solar and wind are already competitive with fossil fuels in many electricity generation markets. Elimination or reduction of fossil fuel subsidies will accelerate the shift to renewable energy.

With all these improvements to come, the solar market and other renewables would indeed flourish in the coming years.