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Solar Stocks Plunge on Bearish Forecasts
28 Feb
Summary
- Solar ETF saw its worst week since June, dropping 8%.
- First Solar's 2026 revenue forecast fell short of expectations.
- Sunrun's disappointing cash flow outlook triggered a stock drop.
The promising start to 2026 for the solar sector has been overshadowed by a significant selloff this week, driven by conservative financial outlooks. An Invesco ETF focused on solar stocks experienced its worst weekly performance since June, declining by 8%.
First Solar contributed to the downturn by projecting 2026 revenue between $4.9 billion and $5.2 billion, falling short of analysts' expectations of $6.16 billion. Consequently, its stock saw an 18% decrease.
The negative sentiment persisted into Friday, with Sunrun issuing a disappointing cash flow outlook for 2026. This prompted a downgrade from Jefferies analysts and a substantial 35% drop in Sunrun's share price.
These events occur amidst broader challenges for the solar industry over the past year, including accelerated termination of key subsidies due to legislation signed in July and exposure to tariffs. Despite these headwinds, the Invesco ETF remains up 12% year-to-date, partly due to increased energy demand from AI and reduced regulatory concerns.
