Clean Energy Stock Deflation And Biden’s Infrastructure Plan

Last month saw buying opportunities in some clean energy stocks as the bubble created from the euphoria over Biden’s election vanished as if it never happened.

Clean energy stocks have simply returned to the general upward trendline from the second and third quarter of 2020.  Rather than bursting in a market panic, this seems to have been more of general deflation.

Some clean energy stocks seem reasonably priced, but there are no great values like we often see during the market panics which typically follow bubbles.  Without a panic, I’m not ready to buy aggressively. Stocks, in general, continue to trade at fairly high valuations, and rising interest rates or some other market disruption could still trigger a sell-off.

 

Performance of the 10 Clean Energy Stocks for 2021 model portfolio through the end of March, vs benchmarks. Note the Clean energy benchmark RNRG is down 11.6% while the broad market benchmark SDY is up 13.7%.

Biden’s Infrastructure Plan

Biden’s infrastructure plan includes significant funding for clean energy. It would make tax credits refundable and extend them and includes an offshore wind push.  It also includes significant measures to improve the long-neglected electric grid and electric vehicle charging.

Solar and wind manufacturers will benefit from the tax credit extensions, but this may not be that significant for anyone company because most sell globally.  The US is a large market for solar and wind, but not so large that it’s a dominant player.  Renewable energy developers are more likely to see a significant impact.  

In the 10 Clean Energy Stocks for 2021 list, Brookfield Renewable (BEP) and Avangrid (AGR) both have significant development arms, so robust support for renewable energy may enable them to increase their growth rates.  Of the two, Avangrid is particularly well placed because it also develops offshore wind and electricity transmission and distribution networks.  Avangrid’s offshore wind development, Vineyard Wind, had been suffering delays due to roadblocks put up by the Trump administration.  Now it seems to be on the fast track.

1 2
View single page >> |

Disclosure: Long positions all the 10 Clean Energy Stocks for the 2021 model portfolio.

Disclaimer: Past performance is not a guarantee or a reliable indicator of ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.