Interest Rate Cut and Elections: Mizuho Analyst Highlights Opportunities for Solar Energy

Maheep Manley, Director of Clean Energy Equity Research at Mizuho Americas, speaks with Julie Hyman and Josh Lipton on Market Domination about the possible impacts of the upcoming interest rate cuts and the forthcoming presidential elections on the solar sector. The analyst explains that there is an astute connection between interest rates and solar energy. "We have seen that this industry responds positively to news about interest rates," Manley explains, adding that this trend will continue in the future. Manley tells Yahoo Finance that most companies in the solar industry have a high debt-to-equity ratio. Therefore, there is significant potential should the Federal Reserve indeed lower the interest rates. In general, solar companies perform better in a low-interest-rate environment, he adds. The solar energy stock gained particular attention after the presidential debate on Tuesday. A victory by Vice President Kamala Harris in November could preserve the current state of the Inflation Reduction Act, which includes tax incentives for clean energy. Manley points out that First Solar is the biggest beneficiary of the current tax incentives, as an estimated more than 60% of their earnings per share for the year 2025 will come from these incentives. In conclusion, Manley mentions that even a Republican or Trump victory would not be overly negative for the solar sector, with at most a 20% to 25% negative impact on solar stocks.