What happened
Shares of residential solar installer SunPower (NASDAQ: SPWR) jumped as much as 22.9% in trading on Tuesday as the entire solar industry rallied. Shares are still up 21.3% at 2:30 p.m. ET.
So what
The solar industry move today was driven in large part by Russia's invasion of Ukraine and the fallout for the energy industry. Today, Shell announced that it would stop buying Russian oil after making a purchase last week and the U.S. banned Russian oil imports.
Image source: Getty Images.
As a result of the reduction in global supply, which is big considering that Russia supplies about 11% of the world's oil, prices are rising, with the price of Brent crude oil hitting $128 per barrel today, up 4% from yesterday's close. The natural reaction for investors is to consider what energy sources are available in the U.S., and solar energy is naturally a winner.
Now what
While high oil prices may lead more people to consider solar energy or lawmakers in Washington, D.C., to think about domestic renewable energy subsidies, there aren't any big changes today. While I think this global energy situation will put more focus on companies like SunPower, that doesn't mean their bottom lines will improve soon. It takes time to sign up customers and deploy solar energy, so I think high oil prices will be a tailwind, but today's pop could easily reverse course tomorrow.
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Travis Hoium owns SunPower. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
