What happened

It's a federal holiday Monday, but unfortunately for investors in the renewable energy industry, stock traders don't seem to be taking the day off. Shares of Plug Power (NASDAQ:PLUG), Enphase Energy (NASDAQ:ENPH), and Piedmont Lithium (NASDAQ:PLL) are selling off hard, down 6.1%, 6.4%, and 12.9%, respectively as of 11:45 a.m. EDT.

Why are alternative energy stocks down today, and why are they down across the board, in segments covering everything from hydrogen fuel cells to solar power to rechargeable batteries?

Collage of windmills solar panels and electric lines representing the renewable energy industry

Image source: Getty Images.

So what

I honestly don't see much in the way of bad news for any of these industries today. Still, here are a couple of theories that might be right:

Oil prices are down today, with WTI crude falling 3.1% and the international standard Brent down 3%. If you consider that alternative energy sources are alternatives to oil, and that they become more attractive as oil gets more expensive, then it only makes sense they'd be a little bit less attractive on a day like today, when oil is getting cheaper.

Separately, The Wall Street Journal pointed out this morning that "alternative-energy investments are leaving their traditional peers in the dust." With investors betting that a President Joe Biden would be good news for renewable energy investments, multiple ETFs and funds that track the industry's fortunes are up 75%, 100%, even 150% just since the beginning of this year.  

Now what

Now, you might think this is good news for alternative energy stocks -- I certainly do. But looked at another way, investors today may be seeing the incredible gains of renewable energy stocks as indicating that now might be the time to take profits. This could be especially true in the case of Plug, Enphase, and Piedmont, which are up 445%, 285%, and 310% since the start of the year -- way ahead of the average.

It could be more especially true in the case of Plug Power stock, which despite its stock price gains has never earned a profit in its life -- and in the case of Piedmont Lithium, which isn't even producing revenue. The one stock in this trio that I'd be more cautious about selling is Enphase Energy. An exception to the rule that renewable energy stocks have more potential than profit, Enphase earned a cool $161 million last year, generated $124 million in free cash flow and is growing both numbers as 2020 progresses.

In the alternative energy world, Enphase Energy still might be the real deal.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.