SolarEdge Technologies (SEDG), a global leader in smart energy technology, hit a 52-week intraday high of $53.28 on Friday, March 20, before closing at $51.73. The party was short-lived, though. By noon on Monday, March 23, share prices had already dipped to $46.16.
Welcome to the volatile world of renewable energy stocks.
In this analysis, we’ll explain why renewable energy stocks are historically volatile, how AI is fueling demand for more clean and renewable energy, and how SolarEdge’s recent performance encapsulates the entire renewable energy sector.
Renewable energy stocks don’t typically fluctuate quite as much day-to-day as SolarEdge recently did. But they are historically prone to significant boom-and-bust cycles.
Maybe not to the degree of the oil industry, but there’s plenty of evidence that renewable energy stocks experience their shares of peaks and valleys.
Look at the Invesco WilderHill Clean Energy Fund (PBW) for example. This exchange-traded fund (“ETF”), according to Invesco, is composed of publicly traded companies that “are engaged in the business of advancement of cleaner energy and conservation.”
The fund saw major peaks from 2005 through 2007 before plummeting throughout 2008 and into 2009. Then came an uptick that lasted from mid-2009 until the spring of 2011. Following that, it experienced a steep drop that more or less lingered for around nine years.
Then, the clean and renewable energy markets exploded in the spring of 2020, partially driven by increases in wind and solar prices during the COVID-19 pandemic. Between March 2, 2020 and January 4, 2021, PBW shares skyrocketed by roughly 346%.
Just a year later, it saw a sharp decline of roughly 30%. And between January 3, 2022 and April 1, 2025, the ETF’s share price dropped another 78%.
Since that time, however, PBW shares have nearly doubled to around $32, where they sit today.
And it’s not just PBW. Another clean energy ETF, iShares Global Clean Energy Fund (ICLN), has followed a similar (although not as drastic) pattern.
Same thing for the Invesco Solar Fund (TAN).
Why such volatility for this sector? There are a few reasons.
These hurdles are enough to send the renewable energy sector into an occasional tailspin. But the industry may now be facing its most significant obstacle yet.
When President Donald Trump began his second term in 2025 after a four-year hiatus, the entire clean and renewable energy industry felt a chill up and down its collective spine.
Renewable energy was squarely in the Trump administration’s sights.
In the span of roughly 14 months since his inauguration, Trump and the federal government have:
Not surprisingly, the International Energy Agency projected the U.S. to add far less power from clean and renewable energy in the coming years than previously anticipated.
In its 2025 Renewables report, the agency stated that:
“The renewable energy growth forecast… for the United States is revised down by almost 50%. This reflects several policy changes, including the earlier phase out of federal tax credits, new import restrictions, the suspension of new offshore wind leasing and restricting the permitting of onshore wind and solar PV projects on federal land.”
The Trump administration’s policy shifts also have Deloitte predicting that annual solar, wind, and storage additions between 2026 and 2030 could fall to a range of 30 gigawatts (“GW”) to 66 GW. That’s down significantly from the projection of 54 GW to 85 GW prior to the signing of the One Big Beautiful Bill Act (“OBBBA”).
These are drastic downgrades. Despite the federal government’s recent push for fossil fuels over renewable energy, however, the industry has been thriving of late. The main reason isn’t surprising.
As we’ve covered here before, AI and its massive data centers require tons of power to operate.
Consider:
Despite the Trump administration’s mandates to roll back clean and renewable energy initiatives, the need for power boils down to one question: What type of energy is ready to deploy right now to satisfy the unquenchable power needs of data centers?
The answer is clean, renewable energy. Why?
For one, it’s all around us. Because renewable energy, like solar and wind, relies on natural resources, there’s no need to spend on imported fuel and other energy sources. That creates energy independence.
Renewable energy technologies and systems are also generally faster to build than fossil fuel plants. That can expedite access to new energy sources.
Plus, renewable energy can often bypass the traditional electric grid, which is facing an astounding 2,600 GW interconnection backlog — mostly composed of solar, wind, and storage capacity projects.
Solutions include on-site or “behind-the-meter” approaches, where power generation happens at the point of consumption. Imagine a solar farm or wind power source on or next to the site of a data center or factory, using power sources that avoid the bottlenecked public grid.
Perhaps most importantly, renewable energy is cheaper. Solar and wind, for example, were roughly 41% and 53% less expensive, respectively, than fossil fuels in 2024.
As of 2025, renewable energy (primarily wind, solar photovoltaic, and hydro) comprised 27% of the electricity used by data centers. By 2030, however, renewable energy could reach a 50% share on the back of global solar and wind growth.
That said, Operation Epic Fury in Iran may complicate matters for the renewable energy industry.
Typically, when war or trade tensions impact the oil and gas industry, alternative energy sources are the beneficiaries.
That may not be the case this time around as the war in Iran continues to rage.
Despite the closure of the Strait of Hormuz, which is choking off 20 million-plus barrels of oil and 290 million cubic meters of liquefied natural gas from passing through each day, renewable energy may not benefit from the fossil fuel supply disruption.
That’s because inflation concerns are rising as oil and gas prices have skyrocketed since the start of the war at the end of February.
And if higher inflation becomes reality, the cost of clean and renewable energy manufacturing will likely rise.
That’s what happened when Russia invaded Ukraine in 2022. The war drove prices for raw materials, labor, and logistics up, resulting in supply-chain issues for the industry. And that damaged the momentum renewable energy had built prior to the invasion.
The war in the Middle East has the potential to stagnate what has been a fast-growing industry. More investments in renewable energy helped clean power, such as wind, solar, and hydro, generate more electricity combined than coal in 2025.
And, surprising as this may be, clean energy stocks have recently outpaced AI stocks. In the past year, the ICLN fund rose roughly 55%. By comparison, Nvidia (NVDA) increased roughly 60%, while the Magnificent Seven tech stocks are projected to gain 26% in 2026.
In the first quarter of 2026, clean energy ETFs were still performing strongly, with positive year-to-date gains. This can be partially attributed to rate cuts by the Fed late last year, which lowered financing costs for renewable energy projects.
Despite some momentum in 2026, however, the renewable energy industry is still prone to volatility. SolarEdge is a perfect example.
Since the start of 2026, SolarEdge had been riding the wave of an impressive 65% rally that culminated in its 52-week high on March 20.
Then the trend reversed, and SolarEdge dropped nearly 10% on March 23.
Let’s examine why by using numbers from the company’s 2025 earnings call in February:
Lots of positives for SolarEdge, especially compared with its performance in 2024. This has led some analysts to upgrade their ratings for SEDG, including Jefferies, Bank of America Securities, and BWG Global.
Looking at the bigger picture, however, there are concerns.
Yes, SEDG’s stock price has roughly tripled in the past year. But over the past five years, SEDG is down around 83%. And the company hasn’t been profitable for about three years. Its negative 34.23% net margin and forecasted negative 4.54 earnings per share for 2026 tell some of the story.
For the rest of the story, just reread the bullet points above to see how much the company lost.
After its roughly 13% spike on March 20, the stock appeared overvalued based on its March 20 closing price of $51.73 versus its fair value estimate of $33.80. The reality for SEDG is that the market still sees the company as turning a corner rather than fully profitable. The 10% plunge in stock price was simply the market correcting itself.
Despite those losses, SolarEdge’s 2025 financials – especially when compared with 2024 – and its early 2026 performance suggest a turnaround for the company.
The overall renewable energy industry may soon get a push as well.
Per OBBBA, all wind and solar projects must commence construction by July 4 of this year to qualify for tax credits. Any projects starting after July 4 are required to be placed in service by the end of 2027 to receive credits.
So, in a way, Trump’s push to abolish clean energy actually gave the industry a short-term jolt by pushing companies to expedite their projects.
That includes SolarEdge, which has big plans for 2026 as it transitions from the “inventory-clearing” phase of the past couple years to a growth plan, particularly in the residential market.
Will these developments propel SolarEdge into profitability in 2026? And will it continue to mirror the rollercoaster the renewable energy sector continues to ride?
Time will tell.
Some macro-level concerns we covered (supply chain issues, rising interest rates, etc.) may inhibit renewable energy from achieving consistent growth. So, continued industry volatility wouldn’t come as a surprise.
However, if the renewable and clean energy industry can successfully adapt to the changing trade policies and supply chain disruptions, there’s plenty of promise.
If you’re looking to invest in renewable energy, SolarEdge remains an intriguing option based on its recent overall success. But this fact remains: Its shares are still extremely volatile, with 89 one-day moves greater than 5% over the past year.
A well-established clean energy ETF, on the other hand, offers more portfolio diversity and potentially more long-term growth. These ETFs may experience their share of volatility, but they’re typically a safer play.
Buckle up, investors. Renewable energy may take us all on a bumpy ride once again in 2026.
Regards,
David Engle
Editor’s note: It’s no secret that artificial intelligence is gobbling up energy at an unprecedented rate… straining America’s already vulnerable power grid.
All the big players are racing to find a new way to meet AI’s power-hungry daily demands, pouring in billions of dollars for alternative energy sources.
Regular folks can still get in on this tech, too – but time is running out.
Because Amazon (AMZN) may have cracked the code.
This breakthrough technology is being hailed as “the Holy Grail of Power,” and Amazon went all-in on it…
Get the details right here, including how to prepare and what to buy.
