What happened
Share prices of SolarEdge Technologies (SEDG 3.67%), Enphase Energy (ENPH 5.05%), and ReneSola (SOL 3.06%) -- all of which are solar technology companies -- were jumping Tuesday as the price of oil continued to climb.
As of 2:22 p.m. ET, SolarEdge was up 9.6%, Enphase had gained 10%, and ReneSola had skyrocketed by 25.7%.
So what
Numerous renewable energy stocks have been rising lately as Russia's invasion of Ukraine has caused oil prices to surge from levels that were already high due to a supply and demand imbalance. Russia supplies oil and natural gas to many European countries -- and also exports some oil to the U.S.
Image source: Getty Images.
Investors have been bidding up the prices of alternative energy stocks lately -- including solar players like SolarEdge, Enphase, and ReneSolar -- because the cost of alternative energy production becomes more competitive as oil prices rise.
The huge share price gains these three companies experienced Tuesday likely were driven in part by President Biden's announcement that the U.S. is banning all further oil imports from Russia.
The U.K. announced Tuesday that it will wean itself off of Russian oil as well, with the goal of ending all imports of oil and refined petroleum products such as diesel fuel from that nation by the end of this year.
This news sent the prices for both Western Texas Intermediate (WTI) crude and Brent crude up 4.6% Tuesday afternoon. The price for the U.S. benchmark WTI is now nearly double what it was a year ago.
Now what
There are still a lot of unknowns right now as global energy markets process the information about the war in Ukraine.
But what's clear is that investors are anticipating that alternative energy companies -- including SolarEdge, Enphase, and ReneSola -- will over the medium to long term become more central to meeting the world's energy needs.
Right now, there's no indication of when oil prices might begin to retreat from their current highs; some experts are predicting that the cost per barrel could continue to rise. All of this means that solar stock investors should continue to keep a close eye on what's happening in the energy sector right now.
