SolarCity Corp (NASDAQ: SCTY)
Solar stocks have been having an incredible time in the market recently. However, the one stock that’s leading the charge seems to be SolarCity. Today, we’ll talk about the factors that are driving SCTY upward, what we’ve seen in the market over the past week, and what we can expect to see moving forward.
Solar Tax Credit Has Been Extended
The big story that seems to be causing gains in SCTY and other solar stocks is a deal that was reached on Wednesday. Congress announced that it had reached a deal with regard to a federal tax credit for solar customers. For quite some time, there has been a tax credit of 30% for consumers or businesses who have installed renewable energy systems. This credit proved to be a great incentive for consumers and businesses alike to purchase solar products from companies like SolarCity. However, this tax credit was expected to expire in 2016. Nonetheless, the expiration isn’t going to happen. In fact, Congress reached a deal that would extend the 30% federal tax credit beyond 2016. In a statement, Lyndon Rive, CEO at SCTY had the following to say with regard to the new deal that was reached…
“SolarCity applauds the bipartisan agreement that prioritizes the growth of solar in the United States… Combined with the historic Paris climate agreement, long-term certainty of the ITC sends a strong signal to the marketplace that investment in clean energy is the right way to drive continued economic growth and job creation.”
Paris Reaches A Historic Deal
The global climate has been a major cause for concern, and science has proven that greenhouse gas emissions are changing the global climate as we speak. As a result, a deal was reached in Paris to curb greenhouse gas emissions, which in turn will provide even further support for the solar and renewable energy industry. Under the agreement, 195 countries are now committed to reporting progress with regard to cutting carbon emissions to a U.N. body every 5 years.
The first report will be due in the year 2023. While this is incredibly bad news for oil investors and the aspects of the energy sector that are reliant on oil, this is incredibly good news for renewable energy companies like SCTY. Ultimately, solar, wind and water power are key ways to drive greenhouse gas emissions in the downward direction. As a result, we can expect to see more sale from SCTY and others in the solar and renewable energy sector.
What We’ve Seen In The Market Recently
As mentioned above, we’ve seen incredible movement in the value of SCTY recently. Over the past four trading sessions, SCTY grew from $36.21 per share to $53.96 per share. That growth is continuing today as well. Currently (11:52), SCTY is trading at $57.12 after a gain of 6.38% so far today.
What We Can Expect To See Moving Forward
Moving forward, I have an incredibly bullish opinion of what we can expect to see from SCTY and other stocks in the solar industry. The bottom line is that global leaders are realizing that greenhouse gas emissions are a horrible thing for the global climate. As a result, governments around the world are looking to renewable energy as a way to combat the issue. With tax credits and deals like what we’ve seen out of Paris coming to light, there’s no reason to expect declines in SCTY or any other solar company for that matter. After all, these types of news are likely to lead to more sales, higher revenue, better earnings and ultimately growth for the stock.
What Do You Think?
Where do you think SCTY is headed moving forward and why? Let us know your opinion in the comments below!