By Wolf Richter for WOLF STREET.
This is about stock prices that get inflated beyond recognition on nothing but wild mania, and when the mania subsides, the stocks collapse and are inducted into our pantheon of Imploded Stocks. And we’re going to look at eight of these imploded solar stocks.
This is not about solar power. Rooftop and utility-scale solar installations are now a fairly large business. Utility-scale batteries have become a profitable way of arbitraging the highly volatile electricity spot prices that can spike during high-demand hours and plunge during low-demand hours, and in this arbitrage, batteries work well with big solar installations, buying electricity when the price is low, and selling when it’s high. And they work well with small-scale solar too. Some of the eight companies here are involved with both solar power and energy storage.
There are up-front costs with solar power, as there are with every power plant. But with solar, the “fuel” is free for the life of the installation, and the math has been getting better as the price of photovoltaic panels has come down over the years. In 2023, the share of electricity generated by small-scale and utility-scale solar installations rose to 5.6% of the total electricity generated in the US.
The eight companies here are sort of pure-plays in the solar-power field. Big utilities are all over solar power, as are big equipment providers, and of course, Tesla. But these eight companies here are specialized players, many of them with over 1,000 employees at the peak, and with hundreds of millions to several billion in annual revenues.
Globally, about 85% of the photovoltaic panels are manufactured in China, which is also its own biggest customer. Vietnam is #2 with a share of a little over 3%. There are some efforts underway to boost manufacturing of photovoltaic panels in the US, to not be so totally dependent on China. But that will take a while to pan out.
This is about stock market craziness, not about solar power.
SunPower has been around for a long time. It went public in 2005 as a spin-off from Cypress Semiconductor. It was one of the big boys at the time.
Its stock experienced two huge bubbles. The first in 2006-2007 when it went from $20 a share to $100. The second started in May 2020, when free money turned brains to mush, and the stock multiplied by 12, from $4 a share to $54 a share in about 18 months to peak in January 2021. Then it collapsed.
There was a mix of operational issues, years of substantial losses, accounting issues, missed filing deadlines, defaults, etc., etc. When it could no longer raise new cash to burn, after it had already burned everything it had, it was over.
In August 2024, SunPower filed for bankruptcy. Most of its assets were acquired by solar SPAC Complete Solaria for $45 million (more in a moment), and SunPower’s shares and investors got wiped out.
This stuff happens. What was crazy were the two spikes in share prices on nothing but mass-mania, and after it subsided, the stock collapsed to zero (data via YCharts).
Complete Solaria [CSLR], the residential solar systems provider that acquired SunPower’s assets for $45 million, had gone public via merger with a SPAC in July 2023, an amazing feat, given that the ignominious SPAC bubble had already collapsed. From the merger-share price of $10 a share, the stock has plunged by 81% to about $1.90 currently, including a slick rug-pull right after the SPAC merger was completed (data via YCharts).
SolarEdge Technologies [SEDG] makes inverters, batteries, power optimizers, and other equipment for solar systems. Back in 2015, when it went public via IPO, SolarEdge made a deal with Tesla Energy to provide inverters for Tesla’s Powerwall. But eventually, Tesla produced its own inverter.
The company, which is headquartered in Israel and is largely active in Europe, made several acquisitions: In 2018, it acquired a major stake in South Korean maker of battery cells and batteries, Kokam. In 2019, it acquired a majority stake in Italian EV powertrain manufacturer SMRE, and it acquired UPS maker Gamatronic. In 2023, it acquired UK-based software-as-a-service provider Hark Systems.
In prior years, the company booked some net income, but over the past five quarters, it booked massive losses, totaling $1.72 billion, including $1.2 billion in Q3. And sales collapsed in 2024, including by 65% in Q3 2024.
The stock price had multiplied by 10 between early 2019 ($36 a share) and January 2021 ($360 a share), then plunged and spiked a few more times within the same range, before the big kathoomph in the second half of 2023. The stock has now plunged by 96% from the triple peaks in 2021 and 2022:
Sunrun [RUN] makes and installs residential solar systems that it sells as a subscription or financed purchase. The company, which is based in San Francisco, went public via IPO in 2015. There had been some profitable years, but over the past five quarters, it lost $1.45 billion.
The stock had multiplied by 11 between April 2020 ($8.36) and January 2021 ($96.50), but then collapsed and today, closing at $9.23, is down by 91% from that peak.
Enphase Energy [ENPH], makes equipment for residential and business solar and storage systems, and EV chargers. After the California-based company had gone public via IPO in 2012, its stock wobbled along the single-digit-dollar line for years. But then in 2019, it took off and multiplied by 48, to $336.00 in December 2022, before collapsing. Today, it’s down by 81% from that high.
The company has been mildly profitable. But revenues declined since 2023, including a 31% year-over-year plunge in Q3 2024.
Shoals Technologies [SHLS], which makes assorted equipment for solar systems, including utility-scale systems, went public via IPO in January 2021 at $25 a share. A month later, it was at $40.17, which was also the peak. Since then, shares have plunged 89% to $4.67 today.
The company had been mildly profitable in recent years, but revenues plunged 30% in Q3, and it booked a loss.
Sunnova [NOVA], which sells solar energy equipment and services, went public in July 2019 at $12 a share, and the stock traded largely around $10 until the covid money came along, when it multiplied by 5 from March 2020 till February 2021.
Just around the peak in February 2021, and still flying high, the Texas-based company acquired SunStreet, a residential solar platform, from homebuilder Lennar, and as part of the deal became the exclusive residential solar and storage provider for Lennar’s new developments.
Since that peak in February 2021, the stock has collapsed by 94% to $3.13. The company has consistently lost large amounts of money, including $418 million in 2023 and $225 million in the first three quarters of 2024. Lennar probably knew why it dumped SunStreet.
Array Technologies [ARRY], which manufactures ground-mounting systems for solar installations, went public via IPO in October 2020, at $22 a share. The stock popped out the gate and quickly rose to over $40 a share, peaking at $51.01 in January 2021, four months after the IPO.
The IPO was notable for two reasons: One, it raised over $1 billion amid huge demand for the shares; and two, it was the beginning of the exit for PE firm Oaktree Capital, which had backed Array.
The company had some mildly profitable years. Sales grew through 2022 but began to decline in 2023. In recent quarters, sales plunged, including by 34% in Q3 2024, generating a large loss.
The stock has now plunged by 86% from the January 2021 high, to $6.97.
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