While the AI-dominated stock market pauses to consolidate, with Palantir Technologies and others declining in recent days, solar stocks have rallied higher after the Trump administration offered the industry a lifeline.
The 27 stocks in the IBD-tracked Energy-Solar industry group have collectively advanced nearly 17% during this month's stock market trade, including a 4.6% collective gain so far this week. Solar stocks broadly advanced on Aug. 15 after the Department of the Treasury released guidance which made clear that wind and solar projects can qualify for federal tax credits if they have either begun "physical work" or a 5% investment in projects by July 2026.
Analysts responded positively to the Trump administration's guidance.
GLJ Research analysts on Aug. 15 proclaimed that the Treasury's guidance "couldn't be better news for the residential solar space." The firm noted that the stock market broadly believed that the Treasury department was going to make it impossible for residential solar companies to take advantage of the Biden-era tax credits in years to come, but that the Trump administration "did the opposite."
Meanwhile, Guggenheim analysts on Monday added that the Trump administration's guidance was good news for solar tracker suppliers, with these companies "positioned to benefit the most."
Even as the stock market viewed solar energy as on life support for much of 2025, the Energy Information Administration, or EIA, on Wednesday released data showing that U.S. developers added 12 gigawatts of new utility-scale solar electric generating capacity during the first half of 2025, with plans to add another 21 gigawatts in the second half of the year.
If those plans are realized, solar energy would account for more than half of the 64 gigawatts that developers plan to bring online in 2025, according to the EIA. Battery storage, wind, and natural gas power plants account for virtually all of the remaining capacity additions for 2025, the EIA reports.
Investors can also keep tabs on leading growth stocks by using IBD's Leaderboard, the IBD 50 list of top growth stocks and IBD SwingTrader along with the IBD Sector Leaders list.
Solar Stocks Take Off
Heading into Thursday's stock market open, residential solar installer Sunrun jumped more than 11% higher this week. Sunrun broke out on Aug. 15 from a sloppy three-month consolidation, and has rallied more than 50% so far in August, on track for a fifth straight monthly advance.
Solar-tracker provider NextTracker has climbed 9% higher on the week and is currently just below a traditional 67.87 buy point, according to MarketSurge charts.
Meanwhile, Array Technologies moved 17% higher during this week's stock market, part of a 37.4% jump in August. The solar stock is slightly extended from a traditional 8.19 buy point from a double-bottom base.
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Israel-based solar panel inverter manufacturer SolarEdge Technologies hit its highest level since June 2024 this week, reaching 33.30 on Monday. SEDG stock is on its way to notching a fourth consecutive monthly gain and has a year-to-date gain of 140%.
First Solar, which manufactures and sells residential and commercial solar panels, is up 18% in this month's stock market. Similar to SolarEdge, First Solar is on pace for a for a fourth straight monthly advance. FSLR stock has gained 64% since the end of April and is up 17% for the year. First Solar is currently extended after retaking a cup-with-handle buy point of 189.50 on Aug. 15.
Not All Clear Skies
However, solar stock rallies are never without risk. That is particularly true under the current White House.
President Donald Trump on Wednesday claimed on Truth Social that states that have built and rely on wind power and solar energy are seeing "record breaking increases in electricity and energy costs."
Trump added that it is "the scam of the century" and that "we will not approve wind or farmer destroying Solar."
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The president's comments could mean heightened scrutiny for renewable energy projects despite the Treasury's guidance.
Meanwhile, Canadian Solar early Thursday lowered full-year guidance amid trade uncertainty and increased solar supply chain prices. CSIQ stock, which had jumped nearly 11% higher in August, was on pace early Thursday to give up all its monthly gains.
Canadian Solar is headquartered in Canada and sees the bulk of its from business in the U.S. and China. It has the majority of its manufacturing operations in China, making it subject to tariff impact. It lowered 2025 revenue expectations to $5.6 billion-$6.3 billion, down from its previous forecast of $6.1 billion to $7.1 billion. The company also said Thursday it predicts solar module shipments between 25-27 gigawatts, revised lower from an earlier expectation of 30 gigawatts.
CEO Shawn Qu said in the earnings release Thursday that these revisions reflect solar projects shifting into 2026.
"The second half will remain challenging, with rising solar supply chain prices and ongoing trade uncertainties," Qu said Thursday.
Please follow Kit Norton on X @KitNorton for more coverage.
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