Get to Know These Solar Energy Stocks
It probably doesn’t come as a surprise to you, but renewable energy sources are expected to experience massive growth in the next decade. Governments and businesses are realizing the benefits of renewable energy — and how investing in it could not only benefit them, but also have an impact on the environment.
One of those renewable sources is solar energy. The market for solar energy is set to grow significantly in the next few years. According to a market forecast in a report from Mordor Intelligence, "global solar energy installed capacity is registered to be 728 gigawatts (GW) and is estimated to be 1645 GW in 2026." This growth for the global solar energy market is forecast to be at a strong compound annual growth rate (CAGR) of 13.78%.
That’s some impressive growth in just five years. It appears that the COVID-19 pandemic didn’t have a significant impact on the global market for solar energy. In fact, Mordor's report “Solar Energy Market — Growth, Trends, COVID-19 Impact, and Forecast (2021–2026)" states that many countries had ramped up solar panel production and shipment and had many projects put into operation during the third and fourth quarters.
Declining prices and installation costs for solar photovoltaic (PV) systems, along with new legislation and policies that have the government’s stamp of approval for solar energy initiatives, have led to this demand and growth within the solar energy industry. The report does note that because of this new acceptance of renewable energy, sources like wind are also experiencing industry growth and could restrain solar’s market growth a bit.
So now that we know that renewable energy sources like solar are going to see a surge in demand in the upcoming decade, here are two solar energy-focused stocks to be aware of...
ReneSola Ltd. (NYSE: SOL)
ReneSola's business has three segments: solar power project development; engineering, procurement, and construction (EPC) services; and electricity generation revenue. The company also develops community solar gardens.
This past May, ReneSola was able to increase its revenue significantly in the first quarter, which could be due to its projects in Hungary and Utah. Its adjusted income for the first quarter rose to $3 million. That was a big step up from the net loss of $2 million that it reported in last year’s first quarter.
ReneSola has recently been awarded 29 solar utility projects in Poland. Each will have the capacity of 1 MW, except for one larger-scale utility project, which will have a capacity of 4 MW. These projects are on the path to be connected to the grid within the next two years.
In the company’s recent first-quarter 2021 financial results, ReneSola reported revenue of $22.8 million, an increase of 7.5% year over year. It beat first-quarter revenue expectations by $2.78 million.
SunPower Corporation (NASDAQ: SPWR)
SunPower operates globally to provide solar solutions in residential, light commercial, commercial, industrial, and other segments. Recently SunPower’s CEO, Peter Faricy spoke of the growth potential for the solar industry still in the rooftop market. That market includes 100 million U.S. homes that could potentially be provided with solar solutions. Faricy also talked about how the solar industry and business are “ripe” for digital innovation that could help to simplify solar-related products.
The company’s first-quarter 2020 earnings per share (EPS) was $0.05, which beat estimates by $0.03. SunPower reported revenue at $305.7 million for the first quarter of 2021. Unfortunately, the company missed first-quarter estimates by $0.98 million.
SunPower could experience direct benefits from the U.S.'s goals for solar energy sources. The company will most likely profit from the increased U.S. demand for solar equipment to reach its goals for solar energy sources.
Companies involved in providing solar energy products and solutions will experience a surge of demand that could have business booming for ReneSola and SunPower. Not to mention the potential profits for early investors in companies related to solar and other renewable energy sources.
Until next time,
Pro Trader Today