Global Solar Industry Scenario

The global Solar industry has been in a pickle in the last couple of years with a huge number of bankruptcies amid crashing solar panels prices. Prominent nations are fighting each over due to subsidies and imposing duties on each other. Chinese over-investment has caused a “mother of god” glut in the solar panel market and companies like Suntech have defaulted on bond payments. Solar industries in countries such as India have been devastated by the ultra low prices and are clamoring for protection. Solar stock prices have gone down by a 90% or more for some stocks while others are trading in pennydom.

Solar to beat Retail Electricity by 2020

Massive short covering has led to some upside in solar stocks in the US but they are not based on solid fundamentals as a lot of these stocks will probably go bankrupt. However the survivors will benefit immensely from the massive $155 billion market that will be created by 2018 with 62 GW of shipments each year. The positive side of the solar panel price crash has been the improvement in solar electricity compared to conventional electricity. This has led to the installation of non-subsidy solar plants in many parts of the world. With solar costs expected to keep going down by 10% each year, by 2020 solar with storage will start beating retail grid prices posing a death threat to utilities.

Current year demand projections are expected to be 35 GW with Japan and China growing at an exponential pace this year. Japan installed a whopping 1.5 GW in the last 9 months due to a generous subsidy policy. Japan is a huge potential market because of its large electricity market and low renewable energy penetration. China is the world’s largest electricity market with 1000 GW and is dependent on dirty coal for almost 80% which is a big problem. If solar becomes cheap enough, then China would not mind substituting the entire 800 GW of polluting death causing coal, with solar energy.

There are many stocks trading for dirt cheap valuation that will benefit. These are low cost players that don’t have extreme debt.

Investors can look into the following stocks:

1. ReneSola (SOL)
2. Yingli Green Energy (YGE)
3. SunPower (SPWR)

I am also positive about other stocks like Canadian Solar (CSIQ) and JinkoSolar (JKS).

Renesola was established in 2005 and is a leading global photovoltaic manufacturer. The company has its own R&D team and advanced production equipment. Renesola is a vertically integrated company with complete R&D and manufacturing of polysilicon, silicon wafer and solar modules. Renesola has a global presence with sales branches established in Europe, the Americas and the Asia-Pacific regions. Renesola Ltd. is a leading manufacturer of silicon wafers & solar modules. This Chinese solar company is one of the lowest cost producer of solar wafer in the world. It is expanding into other parts of the supply chain. Like LDK Solar, Renesola sells most of its Solar Panels under an OEM Contract. Read more about ReneSola.

Yingli Green Energy is one of the oldest Chinese companies and is completely integrated from polysilicon.The company has been expanding rapidly and has one of the lowest cost structures in the industry.Yingli is the second biggest producer of Solar Panels in China. One of the world’s first fully vertically integrated photovoltaic manufacturers, the company develops, manufactures, and sells high-quality modules under the brand Yingli Solar to a wide range of markets, including Germany, Spain, Italy, Greece, France, South Korea, China, and the United States. The company is headquartered in Baoding, China with over 11,000 employees worldwide & more than 10 branch offices globally. Read more about Yingli Green Energy.

Sunpower is a US company which makes the most efficient solar panels using its monocrystalline solar cell technology which gives efficiency of more than 24%. The company sells black solar panels with efficiency of 18-20% . The company is a solar system integrator and developer as well building some of the largest solar farms in the US. The company was recently bought by the French Oil Giant Total. Sunpower operates in all the main segments of the market and has reputation for selling some of the highest quality solar panels in the country. Read more about SunPower.