In the month of February, the solar industry witnessed a decline, writes Jesse Pichel of ROTH Capital Partners. Increasing prices throughout the supply chain and forced labor concerns from China spelled headwinds for the solar industry, but the decline can also be viewed as a healthy correction, following historic highs in January.
From pv magazine 03/2021
The Invesco Solar ETF (TAN), an exchange-traded fund that tracks solar and renewable energy companies, decreased 10.5% in February, while the S&P 500 and Dow Jones Industrial Average increased by 1.8% and 3.8%, respectively.
Within the solar industry, the top five stock performers in the U.S. market for February were SolarEdge Technologies, Inc. (SEDG), Sunnova Energy International, Inc. (NOVA), Daqo New Energy (DQ), Enphase Energy (EPNH), and First Solar (FSLR). These companies witnessed changes of -5.1%, -6.0%, -10.5%, -11.3%, and -12.6%, respectively.
Rising prices
The decline in the solar industry over the past month can be attributed to market headwinds, including increased pricing throughout the supply chain. More specifically, this applied to many of the major PV module components, including polysilicon, glass, and silver.
China’s forced labor issue potentially affected polysilicon supplied from Xinjiang, and there was a healthy correction after markets reached historic highs in January.
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Bounce back
Despite the downturn in February, the overall global solar market maintains a positive outlook. Anticipated demand in both China and Europe remains strong.
Module prices are expected to begin to decrease, after polysilicon pricing reached a resistance level of CNY 100 (approximately $13.68/kg) earlier this month.
Additionally, the U.S. House of Representatives has reintroduced the Growing Renewable Energy and Efficiency Now (GREEN) Act, which aims to extend a 30% Investment Tax Credit (ITC) for five years. It will likely be passed in the months to come.
By Jesse Pichel
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Source: pv magazine
