Solar Companies Soak in Positive Rays From the Fed

Stocks were up big following Wednesday's FOMC rate meeting, where the committee announced it would not raise rates and showed off a dot plot of three likely rate drops in 2024. Industries like retail, housing, and automotive rose in the hope that it would become easier to finance consumer purchasing. Solar stocks enjoyed time in the sun, for a little-known reason.

As Travis Hoium of the Motley Fool wrote, solar panel companies run on 20-30-year loans for consumer installations on detached single-family housing units. When interest rates rise, it eats directly into solar panel profit. When they fall, revenue and margins get better on solar loans.

"At least for today, that pressure is reversing. The 10-year government bond rate fell 18 basis points in the U.S. to 4.02%, backed by bullish Fed officials," Hoium wrote. "Most officials think there will be three or more rate cuts in 2024, and rates will end the year at 4.6%, with rates falling to 3.6% by the end of 2025."

🎙️Q: Are solar panel stocks in your 2024 resolutions?