It’s part of a rally fueled in part by hopes of a blue wave that leads to more federal support for renewables, as Joe Biden has called for wiping out carbon emissions from the power grid by 2035.
“It’s just a sign that renewables are going to be a faster-growing, more affordable solution. There’s just no denying that anymore,” Sunrun co-founder and CEO Lynn Jurich told CNN Business.
The Vivint takeover meant that Jurich was juggling a billion-dollar acquisition and her normal duties as a public company CEO — while working from home during the pandemic with her two young children.
“We’re all struggling with work-life balance. The children thing is the hardest part,” said Jurich, who is 41 years old. “I’ve been able to spend more time with my children because I work from home. That has good days and bad days, like everyone else.”
Betting on Biden win
Investors rushed to buy Sunrun shares on hopes that the acquisition, along with more favorable policies out of Washington, will boost the company’s prospects.
“The Biden platform is very favorable to renewable energy, specifically residential solar,” said Sophie Karp, senior analyst at KeyCorp.
“Biden is priced in,” she said. “I definitely think we’re going to see a letdown in renewable names if he doesn’t win.”
Jurich, the Sunrun boss, downplayed the impact of politics on the industry’s future.
“In terms of the election, the interesting thing is that solar has huge bipartisan support,” she said. “That encourages us no matter which direction the election goes. Either outcome is supportive of the business.”
Election could determine fate of tax credit
“Extending the tax credits under Democrats, something people increasingly priced in this year, could be worth a lot of money,” said Michael Weinstein, an analyst at Credit Suisse. “It would accelerate growth and make solar even more competitive.”
Weinstein emphasized, however, that renewable energy — and solar in particular — no longer requires help from Uncle Sam to compete with fossil fuels. That’s because the costs to build out renewable energy have plunged.
“Solar is ready to stand on its own two feet. It doesn’t need tax credits or federal support,” he said.
“It’s a huge job creator. And it’s one of the only federal policies helping us tackle decarbonizing the electric system,” Jurich said. “If it doesn’t get extended, we would proceed along. The market’s not going anywhere.”
Solar on the rise as fossil fuel doubts grow
Regardless of the election’s outcome, analysts expect investor interest in renewable energy to remain elevated because of the influence of the ESG movement.
Weinstein, the Credit Suisse analyst, said he’s been fielding requests from money managers in the oil-and-gas space who are under pressure to diversify their portfolios to hedge against the long-term risk that fossil fuels will be replaced by renewables.
“It’s brought more money into the ecosystem,” said Weinstein. “And more money sometimes means higher prices.”