Renewable energy stocks have crashed hard, reverting to 2019 levels. First Solar down 35%, Sunrun 60%, and Plug Power a whopping 70%. The green bubble finally popped. Higher interest rates, supply chain nightmares, and cheaper fossil fuels did the sector no favors. Five solar manufacturers went bankrupt, and 40% of hydrogen startups vanished. Turns out weather-dependent energy isn’t the goldmine investors thought. Recovery will take time.
While renewable energy was once the darling of Wall Street, the sector has come crashing down to earth in spectacular fashion. Clean energy stocks across the board have plummeted, with industry giants feeling the pain. First Solar down 35%, Sunrun a staggering 60%, and Plug Power—ouch—down a brutal 70% year-to-date.
Remember when everyone wanted a piece of the green revolution? Yeah, those days are over.
The ETFs tracking these companies haven’t fared any better. Invesco Solar ETF dropped 30%, while the ALPS Clean Energy ETF tumbled 35% in 2025 alone. The S&P Global Clean Energy Index has been knocked back to 2019 levels, like the last few years of growth never happened. Recent election results triggered immediate sell-offs as traders responded negatively to the prospect of Republican control. Wind turbine manufacturers are trading at half their 2019 prices. So much for that climate-saving rally.
Green energy ETFs in freefall, with solar down 30% and clean energy funds plunging 35% in 2025. So much for saving the planet through investing.
What went wrong? For starters, rising interest rates hit these capital-intensive businesses hard. Despite record-breaking investments of 358 billion dollars in the first half of 2023, borrowing money suddenly got expensive. Supply chains fell apart. Equipment costs soared. Meanwhile, fossil fuel prices dropped, making the old dinosaur fuels competitive again. Turns out saving the planet is great until it costs more.
Investor sentiment has shifted dramatically. ESG fund inflows have slowed 70% compared to their 2023 peak. More than half of investors now view renewable stocks as overvalued—quite the change from the “green is gold” mentality of recent years. The fundamental weather dependence of these energy sources continues to raise reliability concerns among serious investors. Short sellers are having a field day, with short interest up 150%.
The carnage has led to widespread industry consolidation. Five major solar panel makers filed for bankruptcy this year. A third of U.S. solar installers simply vanished. The hydrogen dream? Forty percent of those startups are now defunct.
Analysts say recovery will take at least 18 months. Government infrastructure plans might help. Energy security concerns could renew policy support. But for now, the renewable sector’s golden age looks decidedly tarnished. The green dream? More like a rude awakening.
