Clean energy stocks surge as President Biden prepares to unveil infrastructure package


Clean energy stocks surged yesterday following a White House update on President Joe Biden’s infrastructure bill, which includes financial aid, tax credits and funds for research and development activities for initiatives in the renewable energy sector.

Administration officials say Biden’s proposal would result in a $ 2 trillion infrastructure spending bill that aims to improve the country’s roads, bridges and airports, while also aiming to upend others. areas such as water treatment facilities and the power grid.

During this time, Biden’s plans for the green energy sector include the deployment of funds for research and development, which would represent a total of 35 billion dollars, while reinforcing certain financing programs of the American manufacturers in this sector and in others.

Notably, the president proposed a $ 174 billion investment to “win the electric vehicle market” by providing manufacturers with the tools they need to be successful while providing sales discounts and tax incentives to consumers for them. persuade to buy electric vehicles.

In this regard, the government has set itself the goal of building a network of EV charging stations made up of 500,000 stations across the United States by 2030.

In addition, a total of $ 27 billion appears to be earmarked for a program called the Clean Energy and Sustainability Accelerator, which aims to democratize access to clean energy sources in communities that have not yet benefited from these solutions.

In summary, more than $ 300 billion could be deployed through this bill to benefit green energy initiatives, either directly or indirectly, with the administration considering lowering the U.S. corporate tax rate from 21% to 28% to generate the additional revenue needed to fund the bill. .

Due to Biden’s strong push to accelerate development of the sector, green energy stocks surged sharply during the day yesterday. stock trading session, with several exchange-traded funds (ETFs) like Invesco’s WilderHill Clean Energy (PBW) and iShares Global Clean Energy (ICLN) up 6% and 5% respectively.

During this time, Tesla (TSLA) shares rose 4% to $ 635.6 after Biden’s pad on the back of the electric vehicle sector, while individual clean energy companies like Plug Power (PLUG), Enphase Energy (ENPH ) and First Solar (FSLR) also recorded a strong increase in numbers during the session.

President Biden’s proposed hike for business remains one of the bill’s most controversial topics and could hamper its way to the Senate, with top Republican leaders in Congress already voicing concerns about what they have called “a Trojan horse for massive tax hikes and other job-killing leftist policies.”

While Democrats expect to gain bipartisan support for pushing the bill up, they could also decide to pass the legislation through budget reconciliation – a process that involves passing the bill without the 10 additional Republican votes required by the usual procedure.

Further details on this infrastructure bill are expected to be given in a speech he will deliver in Pittsburgh around 4:00 p.m. ET, according to the president’s agenda.

What’s the next step for clean energy stocks?

IShares Trust Global Clean Energy ETF (ICLN) Price Chart – Viewing One Day Candles with Volume, RSI, MACD and other metrics – Source: TradingView

Although it is still difficult to determine which ETF clean energy offers exposure to the most promising companies in the industry, the iShares Global Clean Energy (ICLN) ETF remains the largest with a total of $ 5.24 billion in assets under management.

Data from the ETF database shows that the top 15 holdings of the fund, which include Plug Power, Enphase, First Solar and some foreign stocks, account for 67% of its assets.

What is the Price action seen in the ICLN lately is that a potential double bottom could have formed as a result of yesterday’s hike, with the price bottoming out at the $ 21 level on March 25 while jumping 14 % over the next three days.

Importantly, such a reversal would come at a time when green energy stocks were experiencing strong negative momentum – possibly after Plug Power (PLUG) announced that it would restate its financials after meeting with multiple “accounting errors”.

However, President Biden’s strong push for the development of the sector could now catalyze a reversal of the downtrend. For now, a diverse basket of stocks seems like a better alternative than trying to identify which company will be the most likely winner in the race to become the nation’s largest clean energy solutions provider.

If such a reversal were to occur, it is likely that the price of this ETF could advance towards the $ 28 level in the near term.

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