LITTLETON, Colorado, May 14 (Reuters) - A slew of U.S. solar stocks jumped to life this week amid a resurgence in retail investor buying so-called meme stocks and news that the Biden administration is imposing new tariffs on Chinese solar equipment that may support U.S. manufacturers.

Share prices in U.S.-listed solar firms including Sunpower Corp, Maxeon Solar and Sunnova Energy all jumped more than 20% this week as they benefited from a wave of investor buying of stocks that have been battered for the past year or so.

The Biden administration's new tariffs on several China-made products including solar components and electric vehicles also enlivened trading activity in related stocks.

OVERSHADOWED

Solar equities may lack the profile of meme stock behemoth GameStop, which rallied to its highest since 2021 this week as posts from "Roaring Kitty" Keith Gill raised chatter about the return of the central figure behind the 2021 meme stock frenzy.

Nonetheless, stocks tied to firms mainly engaged in the U.S. residential solar sector have taken a drubbing and seen a surge in short-seller interest since 2022 as rising interest rates slowed demand for residential solar systems.

SunPower, Maxeon and Sunnova share prices all plunged roughly 90% between mid-August 2022 and May 1,2024, and until this week looked set to face continued headwinds in 2024 on a "higher for longer" interest rate outlook.

However, the downbeat tone pervading the solar space has been upended this week by the one-two punch of the meme stock revival alongside the heightened focus on the solar space from Biden's fresh tariffs and accompanying rhetoric about supporting U.S. businesses.

OVERSOLD?

Stocks in SunPower have been among the most active in the solar space this week, posting a record one-day gain of roughly 60% on May 14 as a buying frenzy took hold.

The manufacturer and installer of large scale solar systems has racked up significant losses since California enacted new net-metering charges a year ago that greatly reduced the appeal of household solar systems in the state.

The company's dismal stock price performance over the past year or so reflected the dour operating conditions, and the firm announced a major restructuring last month.

However, the stock has also been a favourite among short-sellers during much of its descent, with short interest representing over 90% of the total amount of shares available to the public as of April 30, according to LSEG.

Such lopsided investor positioning left the stock vulnerable to a short covering rally on any sudden shift in market sentiment, such as seen this week.

UNCLEAR OUTLOOK

Many of the challenges that have beset U.S. solar companies over the past year remain in place, including high interest rates that have snuffed out the appeal of financing the installation of rooftop solar systems.

And the new tariffs imposed on Chinese components this week may actually worsen market conditions for some firms which rely on imported parts.

Nonetheless, after a roughly 90% collapse in the price of some solar company shares since 2022, there was arguably only limited room for additional stock price weakness going forward, and plenty of scope for a rebound.

Now that a major rebound has taken place, many opportunistic investors will no doubt have placed fresh short-sided bets on solar stocks, on the assumption that prices will revert to their downtrend once the short covering melee runs its course.

But given how aggressive the upside price moves have been this week, most short-sellers will remain cautious about placing very large bearish bets, and will be ready to unwind positions if the market runs against them.

That change in sentiment may take some of the pressure off the solar sector in general over the near term, and may allow stock prices to creep higher still on any upbeat news items or earnings reports.

And if U.S. interest rates are viewed as likely to come down later in 2024 - making the financing of solar systems more palatable - some investors with a long-term outlook may start to view the beaten-down solar space as a bit of a bargain.

Such a sentiment swing would have been viewed as outlandish just a few weeks ago.

But now that scores of short-sellers have been battered and pushed out by this week's bull run, a change in the mindset of solar stock holders is on the cards, and a brighter outlook can't be rule out.

The opinions expressed here are those of the author, a columnist for Reuters.

(Reporting by Gavin Maguire; Editing by Lincoln Feast.)