Special Report: Harnessing the Sun: Solar Power Investing 101

Oil is an important resource that we’ve relied on for generations… It provides huge sources of energy, powering our cars, heating our houses and stoves, and it’s the energy source that most often seems to be in the news. The will-they won’t-they back and forth with OPEC has been dominating the news cycle for months.

But there’s another source of energy that could be just as important as oil… in fact one day it could replace oil in much the same way kerosene oil replaced whale oil.

That’s right, I’m talking about a renewable source of energy.

Solar power.

Solar power has long been unaffordable for the average person… but that’s quickly changing.

solar

How often do you drive by houses that have these panels on their roofs?

These are solar panels, and they’re our future.

Solar Power for the People

You might think that other than providing sources of energy, solar power and oil are totally unrelated… but you’d be wrong. Historically, oil and solar have traded in tandem. 

It used to be that when energy sources like oil and natural gas tanked, solar did too. It didn’t matter how much people wanted to invest in solar power, it was just too expensive.

Things Change

According to National Geographic, “Despite low natural gas prices, solar and wind accounted for 60 percent of new U.S. power capacity last year and will likely account for 70 percent this year.”

That’s because it is cheaper.  The average price of the PV panel needed for solar installation has more than halved since 2004. There are also government incentives to consider; Congress renewed tax credits on solar and wind power for another five years last year, which forces companies to look into renewable energy sources more seriously, as it can help cut costs.

According to SEIA.com, “Growing 43 percent year over year, the U.S. saw 2,051 megawatts (MW) of solar photovoltaic (PV) installed in the second quarter of 2016. According to GTM Research and the Solar Energy Industries Association’s (SEIA) latest U.S. Solar Market Insight report, this marks the eleventh consecutive quarter in which more than a gigawatt (GW) of PV was installed.”

solar chart

The above chart shows that demand for solar power is growing.

Billions of dollars are being poured into solar power… and it’s not from sources you might think. Sure, many green technology companies are investing in it, but so are oil and natural gas companies. According to The Guardian, “Total made its first real drive into renewable energy five years ago, with its $1.4bn acquisition of SunPower, one of the largest solar panel makers in the US. Total has also since set up a division, called New Energies, for these low-carbon technologies.”

Total is one of the biggest oil and gas companies in the world. Another huge oil and gas company, Shell, has also established a New Energies section that will focus on renewable sources of energy. Even Exxon, one of the companies least likely to bother with energy sources other than fossil fuels, has started to look more seriously into renewable sources of energy.

According to Nasdaq.com, “The U.S. installed more solar than natural gas capacity last year, its first in history. According to a current report by GTM Research, U.S. solar installations grew 17% in 2015 to 7,286 megawatts (MW), marking the 15th consecutive annual record. Per the Solar Energy Association, in the next two years, approximately 20,000 MWs of new solar capacity will be installed, about twice the existing capacity.” 

Solar power isn’t on top yet, but it’s heading that way, which is why now is a good time to get invested in it, before everyone else realizes what a steal solar stocks are.

First Solar, Inc. (NASDAQ GS: FSLR)

First Solar is a solar energy company that works in the U.S. and internationally. It's a big solar energy company, with a market cap of $3.91 billion. First Solar designs, manufactures, and sells solar panels and solar equipment, and it also provides operating and maintenance help to utilities and commercial companies. It's a solid solar stock because it's so large, and also because it works in more places than just the U.S. Solar power is getting more and more international demand, so the fact that First Solar works internationally as well is sure to boost its annual revenue. It was founded in 1999 and is headquartered in Tempe, Arizona.

SunPower Corporation (NASDAQ GS: SPWR)

SunPower is a much smaller company than First Solar with a market cap of just $1.18 billion, and a share price of $6.88 at the time of writing. However, this is one of the reasons we recommend SunPower. It’s a much more feasible stock to get invested in for the average investor, and SunPower has a lot of room for growth, specifically because it provides solar technology for more than just commercial use, it also provides it to individuals and residences. With the growing demand for solar power in homes, SunPower has an advantage over bigger companies like First Solar because it is already set up to provide solar power to individual homes. It was incorporated in 1985 and is headquartered in San Jose, California.

SolarEdge Technologies, Inc. (NASDAQ GS: SEDG)

SEDG is a tech company that provides one thing all solar power needs… PV panels. Without these panels solar technology doesn’t work, and so SEDG’s focus in designing, manufacturing, and selling these needed parts has made its stock jump lately. It sells its products for both commercial and residential use, so it has a wide revenue base. It's headquartered in Israel, but sells its products all over the world, including in Europe and the U.S. It's a bit smaller than First Solar and SunPower, with a market cap of $564.62 million, but this only gives it room to expand. It was founded in 2006.


Energy and Capital, Copyright © 2022, Angel Publishing LLC. All rights reserved. 3 E Read Street, Baltimore, MD 21202. Your privacy is important to us – we will never rent or sell your e-mail or personal information. Please read our Privacy Policy. Neither the publisher nor the editors are registered investment advisors. Subscribers should not view this publication as offering personalized legal or investment advice. Read our Details and Disclosures.