With the wholesale transformation of the power industry from the inside out and other energy transition mega-trends, capital will continue to flow into renewables from ESG, energy funds, and retail, writes ROTH Capital Analyst Jesse Pichel. Look for a greater mix of unsubsidized economic solar projects to support improving revenue visibility, increasing earnings quality, and multiple expansions.
From pv magazine 01/2021
In December, the Guggenheim Solar ETF (TAN) increased 23.2% vs. the S&P 500 and the Dow, which both increased 2.6%. The TAN gained 233.6% vs. the S&P 500 and the Dow, which increased by 16.3% and 7.2% in 2020. The top five solar PV stock performers in the U.S. market for December were ReneSola (SOL), Daqo New Energy (DQ), Enphase Energy (ENPH), Canadian Solar (CSIQ), and SunPower (SPWR). They increased by 45%, 42%, 36%, 22% and 21%, respectively. The top five in 2020 were SOL, ENPH, DQ, Sunrun (RUN), Sunworks (SUNW), with gains of 708%, 572%, 460%, 402%, and 310%.
Global demand will remain strong in 2021. Roth Senior Analyst Phil Shen believes there will be 25-30% growth for U.S. residential PV in 2021, given the extension of the 26% ITC for another two years, increasing demand for backup power, and the potential easing of Covid-19 restrictions.
The ITC/PTC extension reduces a potential pull-in of demand in 2021, but supports higher medium-term growth. The extent of growth will be driven in part by how quickly constraints in the system – labor, BOS, inverters, and possibly even modules – can be relieved. Recent ABS issuances have priced in a range of ~2.3-3.2% compared with pre-Covid levels of ~3.5-4.0%. The reduction in rates was due in large part to a decline in base rates, though solar ABS issuances provide some evidence of spread compression.
Popular content
The industry continues to forecast a glass supply gap of 8-10 GW in 2021, with large-sized glass capacity expected to satisfy only 50-60% of total demand. Prices for polysilicon have bottomed-out and rebounded, increasing ~1% WoW, signaling the end to three consecutive months of slow but steady declines. Driven by planned expansions in wafer capacity, Tier-1 players including Longi, Trina, and Jinko have locked in up to 812k MT of polysilicon supply over the next several years, in anticipation that supply stays largely unchanged up to 2022.
Read previous versions of the Guggenheim Solar Index
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: [email protected].
Source: pv magazine
