Elon Musk is at it again, igniting the solar conversation with a tweet Tuesday.

“Solar power is growing super fast,” Musk said on his X platform. “In the very long-term (Kardashev Scale), solar will be >99% of all power generation.”

Solar power is growing super fast.

In the very long-term (Kardashev Scale), solar will be >99% of all power generation. https://t.co/CLFpGoL3OT

— Elon Musk (@elonmusk) October 1, 2024

His words couldn't come at a better time for the sector. According to a Reuters report, U.S. trade officials are set to announce potential tariffs on solar panels from four Southeast Asian countries, which could reshape the landscape for solar stocks.

Tariff Decisions Loom Over Solar Manufacturers

This week, the U.S. Department of Commerce will decide on trade cases brought by U.S. manufacturers, including Hanwha Qcells and First Solar Inc FSLR, aiming to counteract what they call unfair subsidies from competitors in Malaysia, Vietnam, Thailand and Cambodia.

The stakes are high: tariffs could either protect American jobs or inflate costs for solar developers already facing a challenging market.

Optimism In U.S. Solar Sector

Despite the tariff uncertainty, optimism is brewing among investors in the U.S. solar sector. Companies such as Enphase Energy Inc ENPH and SolarEdge Technologies Inc SEDG are eyeing double-digit growth in the solar market by 2025.

Recent insights from JPMorgan analyst Mark Strouse highlight a wave of positivity following the RE+ renewables industry conference, suggesting a resurgence in U.S. solar demand, driven by lower interest rates and stable utility pricing.

Read Also: Enphase, SolarEdge, Sunrun Eye Double-Digit Growth As Solar Market Rebounds On Kamala Harris Election Odds

Tax Incentives Benefit Enphase, SolarEdge

Enphase and SolarEdge aren't just riding the wave; they're positioned to benefit significantly from tax incentives, including a 36% domestic content ITC adder that could bolster their profit margins.

As the U.S. focuses on expanding domestic solar manufacturing, these companies are well-poised to capitalize on the growing appetite for clean energy solutions.

Investors Keep A Close Eye On U.S. Solar Stocks

Meanwhile, the situation across the pond is less rosy. Europe is grappling with dwindling demand, particularly in the Netherlands, where policy uncertainty has caused a staggering 70%-80% drop year-over-year.

This divergence highlights the U.S. solar market as a beacon of hope amid global challenges.

With Musk’s bold vision for solar power resonating in the investment community, now is the time to keep a close eye on solar stocks like Enphase, SolarEdge and First Solar and solar stocks-tracking ETFs such as the Invesco Solar ETF TAN.

Will tariffs bolster American manufacturing or inflate project costs?

One thing's for sure: the solar energy landscape is heating up, and investors need to stay tuned!

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Photo: Courtesy SolarEdge