Will solar stocks crash again soon?

Nobody’s paying attention to solar stocks.

These days, all anyone talks about is AI. Or the oil crisis in Hormuz.

Meanwhile, solar stocks are ripping in the background.

The Invesco Solar ETF (TAN) soared +160% since April 2025.

And if historical patterns are any guide, this rally is far from over.

Solar stocks trade in a predictable pattern.

This will sound strange. But for nearly two decades, they’ve risen or fallen in lockstep with which party controls the White House.

The pattern has been remarkably consistent. Just not in the way you’d expect.

Solar is green energy. You would assume that means solar stocks would do well under a Democratic president, and poorly under Republican ones.

But it’s exactly the opposite.

Despite Obama’s aggressive green agenda, solar stocks got crushed during his tenure. If you put $10 into the TAN ETF when he took over, you would have just $2 left eight years later.

TAN bottomed three weeks before Trump’s first inauguration. Then… it surged 660%.

Biden then got elected. Again, green energy was at the top of the agenda. But just three days after his inauguration, solar stocks peaked. By the time Trump took over for the second time, they had shed over 70% of their value.

Once again… solar stocks bottomed just weeks into Trump’s presidency. And as I showed you, they’ve been on a tear since.

It’s amazing how well this pattern has held up. We’ve taken advantage of it at RiskHedge too. One stock we recommended has more than tripled during this solar bull market.

If this two-decade-old pattern holds, solar stocks have at least two more years of runway. Or three, if you consider turning points tend to happen around inaugurations, not election dates.

But I think this actually understates solar’s potential.

Because we don’t live in normal times.

And that’s a good thing.

“Yeah, but AI” is a phrase that keeps coming up when we discuss investment ideas at RiskHedge.

It means: yes, historical patterns make sense… most of the time. This is not “most of the time.” AI demand is warping historical patterns.

As you likely know, AI consumes staggering amounts of electricity. xAI’s Colossus 2 data center, for example, consumes as much electricity as the entire city of Miami. And we’re already building data centers that are ten times larger.

The world is desperately short of energy. The International Energy Agency (IEA) expects global electricity demand to grow by the equivalent of adding an entire Japan to the grid every year through the end of the decade.

We need every ounce of energy we can get.

This canyon-sized supply-demand imbalance is big enough to keep pushing solar stocks higher. Even under a Democratic president.

If you’re not convinced, here’s what our Chief Analyst Stephen McBride had to say about solar recently:

“Solar is easily the most underrated disruption in the world.

It already produces as much electricity as nuclear or wind.

Source: Our World in Data

And the more I study the numbers, the more convinced I am that solar will claim an even larger share of global electricity than most people still expect.

It’ll never meet 100% of our energy needs. And I’m more pro-nuclear than ever. But as solar continues to get cheaper and better, its growth will only accelerate.

Over the past 50 years, the price of solar modules has collapsed 99.6%. They’ve also gotten a lot more efficient. Compared to 20 years ago, you now need 87% fewer solar panels to produce the same amount of energy.

Solar is on a manufacturing learning curve. As we build more, it gets cheaper.

This is why solar power is no longer some hippie dream. In many regions, it’s now cost-competitive with fossil fuels. The exact economics vary by location, but the direction is unmistakable.

Exponential growth industries like solar often trip up investors. They systematically underestimate how fast adoption can compound. Folks made the same mistake with smartphones, the internet, and electric vehicles.

Early on, adoption looks slow. Then it takes off like a rocket.

Solar is on that trajectory.”

In other words, solar may have started as a political trade. But AI is turning it into an energy trade.