Wall Street misread the solar tariffs, says climate finance expert

Investing.com -- Wall Street has misread the market reaction to the latest solar tariff announcement, according to Matt Roling, a climate finance expert and professor at Northwestern's Kellogg School of Management.

Speaking to Investing.com, Roling said that "everyone's talking about which solar company won from Trump's tariffs. Nobody's talking about the fact that the losers' stocks went up too," pointing to the initial reaction.

Roling believes First Solar (NASDAQ: FSLR) is a winner by default.

"First Solar makes its panels out of cadmium telluride, not silicon. This tariff applies to the silicon supply chain,” he explained. “So while every other US panel maker has to prove where its polysilicon came from or risk a penalty, First Solar doesn't have to worry about it at all."

Meanwhile, the overlooked name, in Roling’s view, is Corning (NYSE: GLW), which co-owns Hemlock Semiconductor, one of only two U.S. polysilicon plants.

Roling called it the quiet structural winner, though he said the muted share reaction is justified because "the benefit flows through the JV stake, so it shows up diluted in Corning's own numbers."

Installer Sunrun (NASDAQ: RUN) initially rose on the news, with Roling stating that the increase came despite the fact that they're exposed to higher costs.

“They buy solar panels; they don't make them. The market cheered for a policy that taxes them,” he stated.

Roling was most surprised by Canadian Solar (NASDAQ: CSIQ), the name most exposed to Chinese-linked sourcing, cautioning that headline figures largely reflect its Shanghai-listed subsidiary and a one-time tariff refund.

The initial stock moves at SolarEdge (NASDAQ: SEDG) and Enphase (NASDAQ: ENPH) were "sector beta, not a reaction to anything in the actual policy," he said, since inverters sit outside the polysilicon chain.

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