The Party Is Not Over... Renewable Energy Stocks Reignite

US Government Climate Change Investment Imminent
Hanwha Solutions Soars 40% in 2 Weeks
Global Renewable Energy ETFs Also Rising

A brilliant New Year is rising beyond the Yeongdeok Wind Power Complex, the first large-scale wind power complex in Korea. The year 2021 is expected to be the starting point of South Korea's energy transition, following its declaration of carbon neutrality by 2050. In particular, wind power, which is rapidly growing worldwide, is anticipated to lead the transformation to renewable energy. We hope that South Korea's "Made in Korea" wind power, equipped with world-class wind power technology, will carve out new hope and vigorously advance across the globe. Shot with a Nikon D5 camera and a 24-70 lens using multiple exposures. / Uljin, Gyeongbuk - Photo by Dongju Yoon doso7@

[Asia Economy Reporter Minji Lee] The enthusiasm for investing in renewable energy-related stocks shows no signs of fading. Although the rise seemed limited as international oil prices fell below $100, the news that the U.S. government’s ‘climate change investment’ is approaching has sparked a renewed upward trend.

As of 9:20 a.m. on the 1st, Hanwha Solutions, which manufactures solar panels, is trading at 45,000 KRW, up 2.74% from the previous trading day. Since the beginning of the year, renewable energy has been recognized as a beneficiary of rising oil prices and maintained an upward trend. However, as oil prices dropped amid economic slowdown forecasts, the stock price declined. Shares that traded in the 40,000 KRW range in early June fell to as low as 32,000 KRW on the 15th of last month. However, with the revival of policy support momentum in mid-last month, Hanwha Solutions’ stock price rebounded sharply by more than 40% over the past two weeks. During the same period, polysilicon manufacturer OCI rose 7%, and wind power-related companies CS Wind and Samkang M&T increased by 24% and 21%, respectively.

The factor influencing stock prices was the anticipation of the U.S. ‘Inflation Reduction Act’ passing. This act is positive for renewable energy-related stocks because it allocates a budget of 481 trillion KRW (369 billion USD) for energy and climate-related programs. Although this amount falls short of the figure proposed in the Biden administration’s ‘Build Back Better’ bill last year, it is the largest climate-related investment ever. According to this act, the U.S. plans to achieve net zero by 2050 through various investment programs and tax incentives.

Global renewable energy exchange-traded funds (ETFs) have already been buoyed by expectations of the bill’s passage. The largest global renewable energy ETF by assets under management, the iShares Global Clean Energy ETF, surged 15.37% over two weeks from the 18th to the 29th. Other ETFs such as the Invesco Solar ETF (19%) and the Invesco WilderHill Clean Energy ETF (17%) also recorded significant gains.

Ha In-hwan, a researcher at KB Securities, explained, “Green-related stocks could benefit at any time due to government support combined with structural shifts toward eco-friendly energy policies following the Russia-Ukraine war. The easing of concerns about Federal Reserve (Fed) tightening is also positive.”

In the securities industry, it is advised that comprehensive investment across the entire renewable energy value chain through ETFs is positive. Among domestic stocks, it is considered reasonable to focus on domestic solar and secondary battery-related stocks. Although details have not been specifically presented, it can be interpreted that the plan is to reduce dependence on China in the entire renewable energy value chain, including solar batteries, and provide incentives to companies producing in the U.S. Kang Dong-jin, a researcher at Hyundai Motor Securities, said, “If you were to name companies with high competitiveness in the solar industry excluding China, they would be Korean and American companies. The secondary battery industry is currently divided between Korea and China, and domestic secondary battery cell and material companies are exploring entry into the U.S. market.”