Top 10 Most Shorted Solar Stocks and What It Means for Retail Investors

If you’re a retail investor keeping an eye on clean energy plays, you’ve probably noticed the buzz around short interest in solar stocks. In May 2025, several solar companies have seen an unusually high level of short interest—meaning a large number of investors are betting these stocks will go down.

But here’s the kicker: high short interest doesn’t always mean trouble. In fact, sometimes it signals opportunity—especially if a short squeeze is on the horizon. So let’s break it down in plain terms: who’s being shorted, what it means, and how you, the everyday investor, can make smarter decisions.

What Is Short Selling and Why Does It Matter?

Let’s get the basics out of the way first. Short selling is when investors borrow shares of a company, sell them on the market, and then plan to buy them back later at a lower price. If the stock drops, they pocket the difference. If it rises? They lose money. That’s the risk.

So when short interest in a stock is high, it means a lot of investors believe the company is headed for tough times.

But here’s where it gets spicy—if the price goes up instead, these short sellers scramble to buy back their shares to avoid bigger losses. That rush? It’s called a “short squeeze.”

Think GameStop 2021. Yep, that wild ride.

Why Solar Stocks Are Being Targeted

So why are solar companies in the hot seat? Several reasons:

Interest Rates Are Up: Solar companies need capital. Rising interest rates make borrowing more expensive.
China’s Overproduction: A flood of cheap solar panels from China has driven down prices and hurt global margins.
Earnings Misses: Companies like SolarEdge and Enphase recently posted disappointing earnings, sending shares spiraling.

Still, many of these companies have solid fundamentals. And that creates a tension—a stock that’s down, but not out.

The 10 Most Shorted Solar Stocks Right Now

Here’s a look at the top contenders with high short interest as of May 2025:

1. SolarEdge Technologies (SEDG)

Short Interest: ~33%
What Happened: Shares fell 26% in one day after a downgrade and soft Q1 results.

2. Canadian Solar (CSIQ)

Short Interest: 20.77%
Why: Concerns over shrinking margins and Chinese competition.

3. First Solar (FSLR)

Short Interest: 10.89%
Despite: Strong U.S. presence and IRA (Inflation Reduction Act) tailwinds.

4. Enphase Energy (ENPH)

Price Drop: 17.7% on May 22
Trigger: Guidance missed Wall Street expectations.

5. Sunrun (RUN)

Price Drop: 41% on May 22
Concern: Slowdown in residential solar demand.

6. Complete Solaria (SPWR)

Price Drop: -15%
Reason: Structural challenges in scaling operations.

7. Maxeon Solar Technologies (MAXN)

Data Limited: But rising short chatter.

8. Daqo New Energy (DQ)

Why It’s Shorted: Heavy reliance on China’s polysilicon market.

9. JinkoSolar Holding (JKS)

Volatility Risk: Tied closely to global solar tariffs and exports.

10. Array Technologies (ARRY)

Price Drop: 10.2% in a single session.

What a Retail Investor Should Take From This

Alright, so what do you do with this info? Here’s your guide:

Step 1: Don’t Panic—Understand the Why

Not all shorted stocks are bad investments. Sometimes, Wall Street just gets jittery about sector-wide trends.

Step 2: Look for Fundamentals

Before jumping in—or jumping out—look at the fundamentals:

Is the company profitable or on a clear path to profitability?
Are they innovating in tech, expanding into new markets?
Do they have government tailwinds (like the U.S. Inflation Reduction Act)?

Step 3: Watch for the Short Squeeze Setup

If a heavily shorted stock starts climbing—on good news or even a rumor—it can spark a short squeeze, where prices pop hard and fast.

Retail investors who got in early? They win big.

But beware: short squeezes are volatile. Don’t bet the house.

Real-Life Example

Remember GameStop and AMC? Short interest was sky-high. Reddit traders piled in, driving prices up. Short sellers were forced to cover, pushing prices even higher.

Could that happen again in solar? It’s possible—especially if one of these companies reports a surprise profit or gets major government backing.

How to Track Short Interest (Step-by-Step)

Here’s how to stay updated:

Use Nasdaq.com or MarketWatch – These sites list short interest %.
Set Google Alerts – Track “SolarEdge short interest” or similar terms.
Monitor Earnings Calls – Positive surprises often trigger squeezes.
Check Reddit & FinTwit – Early signs of retail momentum can emerge here.

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(FAQs)

Q1: What does short interest above 20% mean?
A: It’s considered very high and often signals potential for a short squeeze if positive momentum hits the stock.

Q2: Is it risky to invest in highly shorted stocks?
A: Yes. These stocks are volatile. Only invest what you can afford to lose and do thorough research.

Q3: Are solar stocks bad investments now?
A: Not necessarily. While some are struggling short-term, long-term solar growth trends remain strong, especially with global climate goals in place.

Q4: Where can I find official short interest data?
A: FINRA Short Interest and Nasdaq Short Interest are great starting points.

Q5: What is a short squeeze example in solar?
A: If SolarEdge reports better-than-expected Q2 earnings, it could trigger a short squeeze given its 33% short interest.

Top 10 Most Shorted Solar Stocks and What It Means for Retail Investors