Following months of speculation about when the Federal Reserve would cut rates, investors seemed to take a “sell the news” approach in September. Renewable energy projects that are often financed for decades based on interest rates should become more economical as rates fall, but stocks dropped when rates did drop.

According to data provided by S&P Global Market Intelligence, Plug Power (NASDAQ: PLUG) jumped 20.2% in September, Bloom Energy (NYSE: BE) fell 11.3%, and Sunnova Energy (NYSE: NOVA) dropped 12.3% in the biggest moves for the industry.

Renewable energy’s lost growth moment

One of the reasons renewable energy stocks are down is because they’re not getting the boost from artificial intelligence (AI) demand. Over the past few weeks, it’s been revealed that big tech companies have signed deals with nuclear energy providers to build power plants for their data centers, not deals with wind, solar, and hydrogen providers, as they have in the past.

If the tech industry eschews renewable energy for nuclear, it could reduce demand for large projects long term. That said, nuclear power plants are years from reaching production, so there may be a need for near-term solutions that renewable energy can provide.

Plug Power’s good news

A few developments caused Plug Power to outperform the broader renewable energy market. First was a $10 million grant to lead the development of medium- and heavy-duty vehicle refueling stations in Washington State. The Department of Energy is spending $62 million to accelerate next-generation hydrogen technologies, which will be one of the largest awards.

Plug Power also announced it won a contract to provide technical evaluation for a 25-megawatt electrolyzer project in Portugal. This isn’t a final contract, but the deal is expected to be decided soon, to be operational by the end of 2026.

Renewable energy’s bad news

Protectionism also seems to be a trend we will see more in 2024 and beyond. Cheap solar panels and batteries from China have come under pressure, with tariffs from the U.S. and European governments, and those protections will likely continue. That could make it harder for companies like Sunnova to provide installations economically.

For Plug Power and Bloom Energy, the protections could limit the market size they can exploit long term, which is meaningful because China is the largest renewable energy producer in the world.

Financials aren’t improving

The fundamental problem for all of these companies is the lack of profitability. It’s great to have a big addressable market or growing revenue, but if losses mount, they’re still reliant on the market to continue funding the business. A falling stock price can cause a downward spiral that makes it difficult to sustain the business model.

NOVA Free Cash Flow data by YCharts

The recent bankruptcy of SunPower, along with previous collapses of SunEdison and dozens of clean energy manufacturers, is proof that eventually, profits win out. That’s what will ultimately keep me from buying these stocks on the recent moves. Bloom Energy, Plug Power, and Sunnova have all proven they can grow, but haven’t proven the ability to make a profit. Until they do, I’ll stay on the sidelines.

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Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.