As shares in Hannon Armstrong Sustainable Infrastructure Capital Inc. cratered during the week of March 16-20, company leaders snapped up more than $270,000 worth of the stock, signaling their belief that the investment firm can "weather the storm" unleashed by the coronavirus pandemic, CEO Jeffrey Eckel said March 20 in a letter to shareholders in the renewable-energy investment firm.

Hannon Armstrong's stock price is down almost 39% in March, outpacing declines in the S&P 500 and Nasdaq indexes as the coronavirus pandemic sweeps the globe and a price war between oil producers further rattles markets. Eckel blames the dizzying drop on index funds driving a sell-off in clean-energy companies with stable, long-term revenue streams, as well as the rapid liquidation of on highly leveraged shareholder, a trust managed by UBS Group AG.

Long term, investors seem confident that the clean-energy sector is poised for growth: Prices for renewable energy are falling, and governments and corporations are stepping up efforts to cut emissions of carbon dioxide. A basket of renewable energy stocks tracked by S&P Global Market Intelligence gained 49% in 2019, outperforming the S&P 500 by 20 percentage points. But those tailwinds are not shielding the industry from the pandemic's immediate financial and economic fallout. The ALPS Clean Energy ETF is down 26% in March compared to a 17% decline in the S&P 500.

Even companies that generate predictable revenues from contracted renewable energy assets have seen their status as safe havens disappear in recent weeks.

"Even though these solar and wind assets are fairly countercyclical to the broader economy and we usually view them as a port in the storm compared to other types of debt ... the overall lending market is really facing a lot of turbulence," said Gregory Lavigne, a partner at Akin Gump Strauss Hauer & Feld LLP, on a March 24 conference call.

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The coronavirus crisis is unfolding at a time when developers of wind and solar projects are hurrying to qualify for expiring government incentives. For now, the market is still busy, said Andrea Wang Lucan, another partner at Akin Gump. However, Pattern Energy Group Inc. CEO Michael Garland said he expects many projects will be delayed.

Opportunities 'not going away'

Project development will "shift to the right in time," Eckel said on a March 24 investor call. "But the opportunities are not going away and, in fact, we think they'll be larger coming out of this."

However, any delays will pose a test of corporate balance sheets, particularly among smaller players whose businesses depend on advancing new projects.

Sunworks Inc., a California solar project developer, on March 23 said that it is cutting operating expenses by 30% per month, or about $400,000. It has already terminated or temporarily laid off 59 employees, or about a third of its workforce, and another 23 were moved to part-time status.

"Unfortunately, many of our customers, suppliers and business partners are significantly disrupted and the impact of the current environment on their operations will undoubtedly affect our business," Sunworks CEO Chuck Cargile said in a news release.

Sunworks, which plans to report financial results for the fourth quarter of 2019 on March 30, had $2.2 million in cash and equivalents at the end of September 2019, down from $3.1 million at midyear 2019, and net debt of $3.5 million, according to S&P Global Market Intelligence.

Other companies are responding to the turmoil by buying back stock, in part to try to bolster investor confidence.

China's JinkoSolar Holding Co. Ltd. on March 19 said it bought 200,000 of its American depositary shares as part of a $100 million buyback program that the manufacturer's board approved earlier this month. "This share repurchase program authorized by the Board of Directors reflects our confidence in our future growth prospects," CEO Kangping Chen said in a March 12 news release.

Directors at MasTec Inc., one of the largest renewable-energy construction contractors in North America, recently authorized the repurchase of up to $150 million of common stock using first-quarter cash from operations. "We will monitor current conditions and act prudently, however, we believe this period offers a significant and unique opportunity to create value for our shareholders," CEO José Mas said in a news release. He expects the company to finish the first quarter with about $900 million in liquidity.

Asked about a potential buyback, executives at MMA Capital Holdings Inc., an investor in renewable energy projects, said on a March 18 earnings call that the company's board was still weighing its options. The carrying value of MMA Capital's renewable energy investments totaled $289.6 million at the end of 2019, according to a recent filing.

"On the one hand, it's clear that relative to our book value, share price is significantly off," MMA Capital CEO Michael Falcone said. "On the other hand, the short lesson from the last financial crisis was every nickel of liquidity matters."