Tracking the impacts


The Invesco Solar ETF (TAN) decreased by 0.9%, while the S&P 500 increased by 2.4%, and the Dow Jones Industrial Average increased by 2.6% in the month of August. The top five performing solar stocks in the US market include Sunworks (40.3%), Array Technologies (24.6%), SunPower Corp.(22.4%), Hannon Armstrong (16.6%). and First Solar (16.4%). With the industry digesting earnings season, the Invesco Solar ETF was in slightly negative territory following mixed results among US companies.

During the week of Aug. 15, as it relates to ARRY & FTCI and the Inflation Reduction Act, there is an $0.87/kg incentive for steel used in torque tubes, which the torque tube manufacturer technically has a claim on.

Our recent checks suggest that in 2023 approximately 75% of this tracker incentive may go to the torque tube manufacturers, given the limited number of suppliers currently in the US resulting in stronger bargaining power. That said, many torque tube manufacturers are setting up shop in the US right now. By 2024, there should be a substantial number of suppliers which can tilt the balance toward buyers, i.e. tracker companies.

With the Inflation Reduction Act now signed into law, investors have been working through who in the value chain gets the tracker subsidy. Investors are trying to understand how the 10% domestic content investment tax credit adder may be applied and judged. Our checks suggest we’ll need to wait at least four to six months for the Internal Revenue Service to publish its guidelines.

During August prices for wafers, cells, and modules have stabilized amidst an end market standoff, while polysilicon prices continue on an upward trend. Utilization rates in the polysilicon segment remain high, while utilization rates in the wafer segment fell to approximately 68%, those for tier 1 module manufacturers fell to 70% to 80%, and those for SME module manufacturers dropped to 30% to 60%. 

By Jesse Pichel

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