ELLO - How to Invest in US Solar Energy Stocks
Despite the current political environment, the US solar energy market has a number of small-cap opportunities for investors looking to enter this clean energy sector.
According to the most recent report from the Solar Energy Industries Association (SEIA), during the second quarter of 2019 over 600 megawatts (MW) of residential solar capacity was installed for the fourth consecutive quarter in a row.
In a further sign of growth, over the first quarter of 2019, the solar market in the US reached record historical levels of solar installations. SEIA projects solar installations to double within the next five years.
Similarly, even with the 30-percent tariffs the Trump administration slapped on solar panels in early 2018, the US added more solar power than any other type of electricity in the first quarter of 2018, highlighting the rising demand taking place in this industry.
Along with this, the outlook for the solar industry continues to show signs of protracted strength. The Advanced Energy Now projects that the rooftop solar market will reach US$4.14 billion by 2022, growing at a compound annual growth rate of 9.7 percent.
Despite the costs involved with producing electricity from solar energy being higher than traditional sources, there are a number of financial benefits for these firms. This includes government subsidies and tax credits to encourage the production of clean energy sources.
To help investors learn more about individual solar companies, the Investing News Network has put together a list of six US solar energy stocks to buy that have a market cap of US$500 million and under at the time of publication.
Companies are listed in alphabetical order. The companies on the list were generated from MarketWatch and the NASDAQ and New York Stock Exchanges (NYSE) exchanges. All numbers and figures are as of market close November 25, 2019.
1. Ellomay Capital (NYSEAMERICAN:ELLO)
Market cap: US$136.69 million; current share price: US$12.80
First on this US solar energy stocks list is Ellomay Capital. The company is based in Israel, but its shares trade on the NYSEAMERICAN. For nearly a decade, its focus has been on the energy and infrastructure sectors.
The company’s primary assets include roughly 12 photovoltaic (PV) plants in Italy, four PV plants in Spain, a 9.4-percent indirect holding in Dorad, and a 75-percent interest in a project to build a pumped storage hydropower plant in Israel with a peak generating capacity of 340 MW. Several of Ellomay’s solar projects have power purchase agreements (PPAs) of 20 years.
2. ReneSola (NYSE:SOL)
Market cap: US$77.45 million; current share price: US$1.61
ReneSola is a solar company headquartered in China, although it trades on the NYSE. ReneSola began trading on the NYSE in 2008, but was founded in 2005.
The company has offices and warehouses in over 16 countries and provides energy-efficient products. More specifically, RenSola’s products can be broken down into energy storage systems, inverters, wires and cables, solar racking systems and solar panels.
3. Sky Solar Holdings (NASDAQ:SKYS)
Market cap: US$13.26 million; current share price: US$1.58
Sky Solar Holdings is based in Hong Kong and has traded on the NASDAQ since November 2014. The company’s primary focus is on the downstream solar market, and it mostly develops projects in Asia, South America and North America.
Taking a closer look at its balance sheet, since the beginning of 2015 the company’s operating income has primarily been driven from solar power generation revenue. It has developed more than 300 solar power plant projects and parks around the world.
4. Spi Energy (NASDAQ:SPI)
Market cap: US$29.75 million; current share price: US$2.05
Spi Energy is also headquartered in Hong Kong and provides PV solutions for business, residential, government and utility customers. Its primary focus is on the downstream PV market, including the development, financing, installation, operation and sale of utility-scale and residential solar power projects. These projects can largely be found in China, Japan, Europe and North America.
Its portfolio features projects in varying stages of development — from operation to construction.
5. Sunworks (NASDAQ:SUNW)
Market cap: US$6.13 million; current share price: US$1.16
Sunworks was founded in 2002 and is headquartered in California.
Sunworks provides solar power systems for residential, commercial and agricultural markets in California as well as Nevada. It has roughly 64 projects divided between the two states and has installed more than 850 systems.
The company designs, integrates, installs and manages systems that range in size from 2 kilowatts for residential loads to multi-megawatt systems for larger commercial projects.
6. VivoPower International (NASDAQ:VVPR)
Market cap: US$15.54 million; current share price: US$1.14
Closing out this US solar energy stocks list is VivoPower International. VivoPower was originally founded in 2014, and formed VivoPower in Australia and Asia that same year. By 2016, VivoPower was established in the UK and US, and began trading on the NASDAQ. The company is principally engaged in solar electricity generation facilities across many stages of development. With its global reach, VivoPower provides everything from the construction and operation of various solar projects.
VivoPower also provides financing, consulting, engineering and project management services for other developers. It holds a number of subsidiaries such as VivoRex, VivoPower USA and VivoPower International Services.
Exchange-traded funds
Within the solar sector, there is a very sparse number of exchange-traded funds (ETF). In fact, there is only one solar energy ETF, the Invesco Solar ETF (NYSE ARCA:TAN), which tracks the MAC Global Solar Energy Index.
This is an updated version of an article originally published by the Investing News Network in 2017.
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Securities Disclosure: I, Dorothy Neufeld, hold no direct investment interest in any company mentioned in this article.