Clean energy is riding the interest rate roller coaster.
Renewable energy stocks surged after the Federal Reserve cut its benchmark interest rate by half a percentage point Wednesday, accelerating the sector’s rally over recent months amid anticipation of the central bank’s move to stimulate the economy. Some companies lost some of those gains later in the week.
Analysts said the effects of the rate cuts would become clearer over time for the clean energy sector, which pegs project finance costs closely to long-term debt like 10-year Treasury bonds.
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“The initial cut by the Fed only matters to the extent they continue to do it,” said Allan Marks, an attorney who specializes in renewable energy project finance at Milbank LLP.
