Solar stocks enjoyed a good start in 2021, writes Jesse Pichel of ROTH Capital Partners. In the United States, the Biden administration’s focus on climate change and the expectation of further incentives for renewables saw solar stocks rally in January. The global forecast is also positive, with China and others set for big installation numbers.
From pv magazine 02/2021
In the month of January, the Guggenheim Solar ETF (TAN) increased 5.8%, while other major market indices, includng the S&P 500 and Dow, decreased by 1.1% and 2.0 %, respectively, over the same time period.
In terms of monthly returns, the top five stock performers within the U.S. solar market for January were Sunworks (SUNW), SunPower (SPWR), ReneSola (SOL), Daqo New Energy (DQ), and Applied Materials (AMAT), which increased by 247%, 111%, 81%, 54%, and 12%.
While no clear indicators can explain SUNW and SPWR’s tremendous growth, the overall surge in solar stocks last month can be attributed to a combination of the Biden administration’s focus on climate change and a historic rise of retail investors entering the market.
Following a ‘Blue Wave’, the U.S. market is expecting more incentives to be implemented, specifically in the solar and energy storage sectors. They include (1) a permanent Incentive Tax Credit (ITC); (2) refundability or direct payments; (3) a storage ITC; (4) a permanent ITC at 10% for consumers, i.e. loans; (5) a jobs program and prevailing wage requirements, which the unions want, and; (6) national standardization of permitting and interconnection, among other priorities still to be determined.
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The global market outlook for solar also remains positive for 2021. ROTH Analyst Phil Shen suggested that China’s demand in 2021 is forecast at 50 GW. It might even reach as high as 80 GW, depending on grid parity project demand and the development of solar module prices throughout the year.
EU installation capacity could also increase by 10 times from 2020 to 2030, driven by significant development growth on the commercial side and cost efficiency on the residential side.
By Jesse Pichel, ROTH Capital Partners
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Source: pv magazine
