Clean-energy stocks are suffering through their worst slump in years, causing the industry’s value to tumble by tens of billions of dollars and endangering America’s environmental goals.
Major auto manufacturers like General Motors (ticker: GM) and Ford Motor (F) have delayed plans to roll out electric vehicles. Offshore wind developers are canceling or delaying projects that were expected to provide millions of Americans with carbon-free electricity. Homeowners, even in climate-conscious states like California, are buying fewer solar panels for their roofs. And green-power producers known for offering steady, reliable dividends have lost their veneer of safety. Rising interest rates have posed the gravest challenge to the industry, but supply-chain problems, inadequate electric transmission infrastructure, and competition from China are hurting, too.
The fallout has caused 76 of the 77 stocks in the Invesco WilderHill Clean Energy exchange-traded fund (PBW)—a green-power benchmark—to fall for the past three months (the one stock to rise is a tiny fuse maker). The ETF itself is down 32% since the start of the year, compared with a 14% gain for the S&P 500 index.
Most of those stocks look set to keep dropping. Solar and wind companies are awash in mispriced inventory and face an extended stretch of high interest rates; they’re probably several quarters away from a financial rebound. Newer tech like clean hydrogen is years away from profitability. While some clean-energy stocks do seem headed for a rebound, even those call for some caution.
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