Shares of solar manufacturers rose sharply Thursday after President Donald Trump told supporters that mounting solar PV panels atop his proposed Mexican border wall would allow the project to pay for itself.
SunPower Corp. jumped 13 percent to $8.69 at the close in New York, Canadian Solar climbed 7.7 percent and JinkoSolar Holding Co. rose 4.4 percent.
During a campaign-style rally on Wednesday evening in Cedar Rapids, Iowa, Trump publicly described for the first time the idea that a wall along the 1,990-mile (3,200 kilometer) Mexican border could double as a solar power plant.
“We’re thinking of something that’s unique, we’re talking about the southern border. Lots of sun, lots of heat,” Trump said. “We’re thinking about building the wall as a solar wall, so it creates energy, and pays for itself. And this way Mexico will have to pay much less money, and that’s good. Is that good?”
Analysts have expressed skepticism about the plan, saying it could take more than a century for solar panels to generate enough power to cover the cost of the wall. But Jeff Osborne, an analyst for Cowen & Co. in New York, said the mere fact that Trump mentioned solar in positive terms is probably giving panel makers a boost.
“Just the fact that he used the word solar in a sentence and that perhaps he is not entirely anti-renewables helps,” Osborne said in an interview.
When it comes to the border wall, the companies best positioned to win bids from Washington are SunPower and First Solar Inc., which are both based in the U.S., Deutsche Bank AG analyst Vishal Shah said in a research note. First Solar closed up 3.2 percent, at $38.42, after earlier rising as much as 6.7 percent.
Coker & Palmer Inc. analyst Brad Meikle said the rally had more to do with module prices than Trump. After falling for years, panel prices have climbed to between 41 and 43 cents per watt, from 35 to 39 cents a month ago, Meikle said. That’s largely because a pending trade case could lead to tariffs on solar cells imported into the U.S., potentially squeezing supply and bucking previous concerns that the market was over saturated.
“Given that, shortages are much more prone to develop,” Meikle said in an email. “Spot prices have risen sharply.”
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