Solar stocks are showing signs of recovery. The Yoon Suk Yeol administration is pushing for solar energy as a solution to AI-driven power demand, and the U.S.-China summit has seen the U.S. take a cautious approach to easing regulations on Chinese solar products, creating favorable conditions.
On the 30th, Hanwha Solutions, a leading solar company, closed at 33,900 won, up 4.31% from the previous trading day. OCI Holdings rose 3.23% to 223,500 won, while HD Hyundai Energy Solutions increased by 5.77% to 128,300 won. Other related stocks, such as Shinsegi Entech, also saw a rise of 1.83% to 17,810 won, and LS Electric remained stable at 205,000 won. Notably, solar stocks demonstrated resilience, showing only minor adjustments of around 1% despite the KOSPI index dropping nearly 2,000 points over three days.
The catalyst for the stock rebound was President Yoon's mention during a Cabinet meeting on the 29th of utilizing farmland for solar power facilities. He stated, "If we install solar facilities on idle farmland and sell the excess power, it could yield significantly higher profits than traditional farming," adding that proper infrastructure for transmission and distribution networks would make 'solar farming' a viable livelihood. The industry interprets this as a call for policies to address power shortages caused by AI data centers through solar farming.
The U.S. taking a cautious stance on easing regulations for Chinese solar panels and materials is expected to benefit South Korean companies in the long run. Starting December 4, the U.S. will apply minimum import prices on polysilicon and solar-derived products under Section 232 of the Trade Expansion Act. Polysilicon will be priced at $21 per kilogram, and cells at $0.38 per watt, with tariffs imposed on any amounts reported below these thresholds. Additionally, a 15% tariff will apply to ingots, wafers, cells, and modules. As a result, domestic solar value chain companies currently building large-scale production facilities in the U.S. are anticipated to gain from these developments.
Hanwha Solutions, for instance, has a large-scale production facility in Georgia with an annual module production capacity of 8.4 gigawatts (GW). HD Hyundai Energy Solutions holds the top market share in South Korea's solar module sector, while Shinsegi Entech has established high-precision solar module manufacturing processes, making it well-positioned for stock price resilience as the market recovers. OCI Holdings controls one of the few 'non-Chinese premium polysilicon supply chains' in the global market.
Significant political events are also on the horizon. If the Democratic Party achieves a 'blue wave' by securing both the House and Senate in the upcoming U.S. midterm elections on November 3, stocks related to solar energy and energy storage systems (ESS) are expected to benefit in the South Korean market. The prediction platform Polymarket recently estimated a 62% probability of the Democrats winning both chambers. If this scenario unfolds, it would mark the first time since 2006 that the opposition party controls Congress entirely.
Hyundai Motor Securities Research Center analyzed, "The policy premium for solar energy and secondary batteries, which are prioritized by the Democratic Party, is expected to recover, and investments in power generation and transmission networks are bipartisan, leading to continued expectations for increased demand."
* This article has been translated by AI.
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