Is Shoals Technologies Stock a Good Solar Stock to Own?

October 13. 2023. 6 mins read

Broadly speaking, tech stocks are volatile. That has been doubly true with solar stocks, which tend to rise and fall in tandem rather than based on individual company performance. There is some justification to lumping solar companies together in this way, because they are often subject to many of the same risks while also reaping many of the same benefits through subsidies. Indeed, we’re supposed to be living in the golden age of green technology with initiatives like the U.S. Inflation Reduction Act (IRA) and European Green Deal offering billions of dollars in tax credits, loans, and grants. Instead, solar stocks are down nearly 30% in 2023 based on the year-to-date performance of the Invesco Solar ETF (TAN), a pure-play solar fund.

Why are solar stocks lagging? Some of it is attributable to individual performances. The three top holdings in TAN – Enphase Energy (ENPH), First Solar (FSLR), and SolarEdge (SEDG) – account for roughly 30% of the fund’s holding. Big swings in any of these stocks will certainly drag down the rest. In fact, both Enphase and SolarEdge are down more than 50%

Become a premium member and get access to hundreds of premium articles, reports and additional content.

Nanalyze Premium is your comprehensive guide to investing in disruptive technologies. Read by the top investment banks, management consultancies, VCs, and research houses. Trusted by over 100,000 institutional and retail investors. Covering disruptive technologies for over 18 years.