We’re all worried about global warming and ozone depletion. It’s melting the ice caps, which risks sinking island nations – maybe even some Aussie beach towns. It exposes us to higher levels of skin cancer and generally messes with life on earth as we know it. One of the major ways to slow the tide is by ditching fossil fuels in favour of renewable energy. Alternative energy sources include wind, water, biogas, and steam.
Ironically, solar power is a popular choice, so we’re benefiting from the increased sunlight in a roundabout way. In the past, solar energy was expensive and impractical, but solar panels are getting cheaper and cheaper, and companies all over the world are investing in the sun. India just opened the world’s largest solar park in Karnataka, spanning 13,000 acres. From an investment perspective, this makes solar power companies a sure bet, so let’s look into some of the top contenders around the globe.
Atlantica Yield PLC
This UK-based company is a powerhouse in solar energy, but they also have investments in water energy, natural gas, and wind farms. Their operating income has been steadily expanding, and their stock price has continued its solid gains four years in a row. Its energy assets are spread across the USA, South Africa, Algeria, Spain, Uruguay, Peru, Mexico, and Chile, giving it on-ground representation in four continents.
If you’re a long-time investor, you might know the company by its former name, Abengoa Yield. Atlantica was strengthened earlier this year when Algonquin – the Canadian power and utility company – acquired a 25% stake, injecting capital and stretching ABY’s influence in North America. Algonquin is now ABY’s largest shareholder.
First Solar Inc. (FSLR)
In a strange – or perhaps intended twist, this American solar company could benefit from Trump’s time in office. The US President’s tariffs on solar panel imports from China have largely been seen as a bad move. It hurts China and could raise production costs for companies that use Chinese components. However, FSLR uses thinner cadmium-telluride panelling, so they could be positioned as an alternative to the now pricy Chinese panels.
This allows them easy access to the market with hardly any competition. The company’s stocks didn’t do too well in 2016, but throughout 2017 their fortunes improved with a 20% rise in October and another 13% in December. By last month, shares were trading at close to $70, making it serious eye-candy for any overseas stock broker.
Sunpower Corporation (SPWR)
2016 was a harsh year for SPWR. They lost nearly 70% of their share value. For any other solar company, this would have raised a bankruptcy scare. Fortunately, SPWR is shored by traditional fuel, thanks to its 66% ownership by Total S.A, a company with firm footing in the petroleum industry. In solidarity, Total bought solar panels for the 5,000 petrol stations that it owns, marking a boost in Sunpower sales.
The company’s strategic decisions are looking good for share price too. In response to Trump’s tariffs, SPWR invested in Congenra Solar’s technology wing, to develop vast improvements in solar panelling, especially related to scale and efficiency. It also agreed to fully acquire SolarWorld technologies, a home-grown US manufacturer of solar panels. This April 2018 agreement completely by-passes the China tariff problem.
Vivint Solar Inc. (VSLR)
The company had a wild ride in 2017. January saw a 200% rise in revenue from 2016, and in June, prices doubled, but the gains were eventually lost. Still, the third quarter saw a profitable turn, based partly on a change in strategy. VSLR switched up its business model, allowing consumers to buy in cash or make purchases on a loan basis.
Two years ago, the company ceased operations in Nevada. However, the state passed new laws to make the most of renewable energy by allowing solar power companies to sell their excess to electricity companies. This had the dual effect of offering a new revenue stream and gathering consumer interest in solar power, allowing VSLR to resume Nevada operations.
Jinko Solar (JKS)
We’ve been looking at the effect of the solar panel tariffs in the US. Now let’s see what they’re doing to China. JKS CEO – Kangping Chen – downplays the impact. He says his selling prices in the US are stabilising. In 2016, one watt of solar power sold at 30 to 31 cents at the start of the year, and had risen to 25 cents by year’s end. In 2017, prices hovered between 37 and 39 cents. A 10% to 15% drop was expected.
Mr. Kangping did note that PERC cells were gaining popularity because they were more efficient, but they cost more. At home in China, a June reduction in solar subsidies was expected to reduce demand slightly, but in the first half of 2017, sales went from 6.656 gigawatts to 9 gigawatts. Similarly, Canadian solar company CSIQ says China accounts for over40% of its sales, so the solar market is definitely active.