Renewable energy is poised to play an ever greater role as the world shifts away from fossil fuels, and the recent pullback in clean tech stocks presents a buying opportunity, Guggenheim said while initiating coverage on solar stocks.
"We believe that the shift to distributed energy generation and storage is a large, sustained phenomenon, and owning best-in-class companies makes sense," the firm wrote in a note to clients. "We expect distributed solar installations to continue growing robustly, especially now that energy storage is becoming economically viable."
Guggenheim pointed to several possible factors driving the declines, including excessive valuations after 2020's record run, as well as slower-than-expected governmental policies. Other concerns include rising input costs, such as for steel and semiconductors, and higher interest rates.
But given solar's large and growing market, Guggenheim said the pullback is an "attractive opportunity" to pick up shares of quality names.