Add renewable energy to the list of industries-from real estate to utilities-getting punished by high interest rates.

The 10-year Treasury note was yielding 5.2% on Friday, up a full percentage point in just the past seven months. Solar and wind companies are struggling, because they have to pay higher rates to borrow money for their projects.

The Invesco Solar ETF is down 10% in the past month, and 23% in the past six months. The First Trust Global Wind Energy ETF is down 4% and 6% over the same periods.

Renewables were already in a tough spot heading into the second half of this year. Last year's big tax bill cut tax subsidies for new projects starting in July, and the Trump administration has slowed the pace of renewables permitting, companies say.

Rising rates are adding even more pressure. One subindustry that's particularly vulnerable to high interest rates is residential solar power. Homeowners tend to take out loans to finance the solar arrays they put on their roofs, which can cost over $20,000. Rising debt costs make those systems less attractive.

Installer SunPower said in its latest quarterly earnings filing that its installations dropped in part because of high rates.

Even companies that lease panels to homeowners can struggle in these environments. Sunrun, the leading residential solar lessor, said high interest rates affected the size of the up-front payments it gets from investors to finance its projects. SunPower stock is down 76% in the past six months, while Sunrun is off 38%. Solar equipment suppliers like Enphase and Nextpower also suffer from second-order effects, and their stocks have fallen.

For larger renewables projects-which are spread out across fields instead of on top of roofs-rising rates can also hurt.

The cost of a renewables project is front-loaded. Companies need to buy equipment, get permits for land and pay construction workers well before they start making money by selling power, so they need to raise money from banks and investors early in the process. When rates are high, they have to pay more for that financing, committing future cash flows to interest payments.

It's not just loans that get pricier. Equity investors in projects demand higher returns on their money too-it makes little sense for them to accept a 6% return on a solar project when they can make more than 5% on a Treasury note with much less risk attached, for instance.

High rates also make renewables less attractive compared with other kinds of electricity generation because they reduce the present value of future cash flows. A 2 percentage point change in the "risk-free rate," which is defined as the rate on a very safe interest-bearing investment like a government bond, increases the cost of a renewable project by 20% over its lifetime, versus 11% for a natural gas plant, according to energy research firm Wood Mackenzie.

Natural gas plants also involve up-front investments that are sometimes financed with debt. But a significant portion of their cost is for the fuel that makes them run, which companies buy over a longer period. (The risk-free rate, measured by the 3-month or 10-year Treasury, is up about 2 percentage points since mid-2022.)

Among the players developing large renewable projects in the U.S. are NextEra Energy and Clearway Energy, both of which are down sharply in the past few months.

NextEra has a particularly ambitious project pipeline, involving both renewables and fossil fuel plants, and carries a heavy debt load, which makes it sensitive to rates. But the company says it's added more than $46 billion worth of hedges specifically designed to protect it from swings in interest rates.

If rates rise half of a percentage point, the company says it will only cause its earnings to fall by up to 2 cents per share next year. Rising rates may put those hedges to the test.