Since the call to rescue mother earth from global warming, clean tech stocks have consistently maintained a clean sheet on the stock market. But, unfortunately, that all-time high fell sharply by half the year.
This unfavorable situation became very concerning for the sector this year. In addition, the never-ending inflation made investors more careful about the market.
Big cleantech companies are made to take the fall. For instance, after making a massive profit in 2021, Global clean energy has also taken a break from that constant growth. S&P Global energy index, which comprises companies like Sunrun Inc., Orsted AS, Iberdrola SA, etc., witnessed a decline after almost tripling its value in the previous year. Generally speaking, cleantech stocks are not appearing as good as they used to. However, they are beginning to gain some momentum.
The Causes of Fall in Clean Tech Stock
The cause of this surprising decline in cleantech stock can be attributed to ;
- Inflation
The cost associated with going green is high. To make matters worse, there is a rise in inflation worldwide. There is already a high cost of wages and salaries due to a limited number of skilled workers. And with the current level of inflation, it has become more challenging to make a profit as it should. So, the value of stocks is forced down.
Fortunately, the narrative is changing because more people are swinging towards climate change and eco-friendly production processes. This means there will no longer be a shortage of labor. Moreso, enough competition will bring down the production overhead. And thanks to the government policies that are going in the direction of climate change and in favor of cleantech companies. As a result, inflation will no longer be able to hold clean tech stocks down.
- Low interest
The rising costs of products and services hurt the interest rate on stocks. As a result, the interest went down, forcing down the value of stock and discouraging investors. Meanwhile, businesses need to profit, so channeling funds to the most profitable stock is the best thing to do. An average business person would instead put his money where he can yield the most interest. Unfortunately, the rate of returns has prevented more investors from investing in cleantech.
However, this is also changing because with policies in place to combat inflation, interest rates are bound to increase, and therefore more investors are encouraged to put in their funds.
Reasons Why CleanTech Stock Will Rebound
There are several reasons why cleantech will rise again. It is not about positive thinking; some factors will give the stock wings and make them fly high.
First, the stock exchange market is generally dynamic and susceptible to negative change. Yet, this unusual situation is bound to reverse for cleantech stocks. Although the value of the stock was brought down by inflation, the US government is combating it with the ‘inflation reduction act.’
In the long run, cleantech stocks will perform well on the stock market. There is so much noise about climate change and the need to build a better world. Most governments are making policies and doing everything they can to support cleantech. And this is because they follow an environmentally friendly approach.
The demand for the goods and services of the clean tech industry will continue to increase. Keeping the environment safe is a general concern. For this particular reason, people and governments will continue to choose environmental safety. This means that the demand for cleantech goods and services.
The government supports clean tech industries by trying to make policies that make it easier for business organizations to be part of them. There are also grants for business units with innovations that support the ”green” initiative.
Clean Tech Stock to Look out for in 2023
There will be so much increase in clean energy and environmentally friendly technologies. An intelligent investor should take advantage of this slight price decline to invest in cleantech. In addition, the Inflation Reduction Act will help speed up clean tech stock prices in the coming year. So, generally, you should look for clean tech stocks in the coming year. Below are some of the stocks predicted to make the best gains on the stock market. This prediction is based on how well they’ve been performing on the stock market.
- Sunrun Inc.
Sunrun was established in 2007 as a cleantech company. They develop and install solar energy systems in the US. It is an interesting fact that the company has Alsotent with earnings. In addition, Sunrun has a track record of exceeding previous revenue. As a result, some analysts predict that the price of this company’s stock will go as high as $70 or even more.
- Brookfield Renewable
Brookfield Renewable partner is one of the cleantech companies with clean and impressive stock. Operating in Colombia, China, India, and Brazil, including North America and some parts of Europe, Brookfield has increased year over year (YoY) revenue by more than 20%.
- SunPower Corporation
This corporation is an energy provider in the US and Canada based in California. They are the manufacturer of photovoltaic solar energy generation systems. They have an impressive stock outlook after recording a high year-over-year increase, and the share price rose from $22 to $30 before other factors caught up with it and declined a bit.
- Plug Power Inc.
They are New York-based and established to be a provider of zero-emission solutions and clean hydrogen, Plug power has a positive outlook on the stock market. In addition, the Amazon deal positively affected the organization. As a result, it is currently possible to reach its goal of $3B in revenue by 2025.
- Shoals Technologies Group, Inc.
Shoals Technology is a provider of EBOS (Electrical Balance of System) solutions for solar projects in the US. They reported a $73.5M revenue, which impacted their revenue positively.
Conclusion
Despite the recent decline of cleantech stocks, there is the hope of rebounding in a big way. First, no one wants to be associated with any investment or project contributing to environmental pollution. This alone can drive investments in clean tech stocks. Moreso, with the government’s support of the clean tech industries, you can be sure that nothing will go wrong. In the long run, clean tech stocks can give investors higher returns on investment (ROI). This is because of their record of performance and financial strength.
P.S: The best time to make that smart move is now. If you want to be part of cleantech, you can invest today. Contact your broker for more information on how to invest.
