Solar company shares, such as SolarEdge SEDG, Sunrun (RUN) - Get Sunrun Inc. Report, SunPower (SPWR) - Get SunPower Corporation Report and Sunnova (NOVA) - Get Sunnova Energy International Inc. Report, fell Tuesday, after California’s three biggest utilities proposed changes in the state’s solar program.
The changes would bring higher connection charges and lower rebates for homeowners who put up solar panels. The recommendations would apply just to new installations.
They came from PG&E (PCG) - Get Pacific Gas & Electric Co. Report, Edison International’s (EIX) - Get Edison International Report Southern California Edison and Sempra Energy’s (SRE) - Get DBA Sempra Report San Diego Gas & Electric.
The utilities said they want to erase the “unfair and growing inequity” in state policy that has non-solar customers doling out about $3 billion more a year for electricity to subsidize solar customers, Bloomberg reports.
The solar industry’s response: “California is a solar state, but the utilities want to own the sun and keep it out of the hands of everyday people,” Bernadette Del Chiaro, executive director of the California Solar and Storage Association, said in a statement, according to Bloomberg.
Sunnova finished down 5%; SunPower ended off 8%; Sunrun lost 8.6%; and SolarEdge dropped 3.9%.
If the proposal goes through, it could hurt Sunrun, SunPower and Sunnova, Morgan Stanley said, according to Bloomberg. But the bank said in a follow-up commentary that weakness in Sunrun stock creates a buying opportunity.
Solar stocks have risen in recent months amid enthusiasm over President Biden’s support for renewable energy. The Invesco Solar ETF TAN has soared 67% in the last six months, compared to a 17% gain for the S&P 500 during that period.