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Shares of residential solar installer Sunrun Inc. (NASDAQ: RUN) fell 17.3% in October, according to data provided by S&P Global Market Intelligence, as residential solar stocks slid during the month.
One of the worrying items that came out during the month was word that San Diego Gas & Electric hit its net metering cap, which means that new fees will be added to solar customers in the future. Soon, other utilities in California, which is the country's biggest solar state, will hit caps that will result in higher fees as well.
This addition of fees could lead to the solar economics not working as well as they did in the past. And with installers like Sunrun already struggling for customers, it could lead to a rough next few quarters.
We'll find out later this week what the financials of solar today look like and there are both good and bad trends. Sales costs have been rising, which is hurting margins, but solar panel prices have plunged in the last few months, which could lead to higher margins for installers. I wouldn't panic over a stock move that isn't driven by real fundamental flaws, but the trends for Sunrun need to be monitored closely because this is a company with higher costs than many of its competitors in residential solar.
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