3 solar actions making big oil obsolete


There is no doubt that solar power is the fastest growing new energy source in the world today. Costs are falling and rising everywhere, from rooftops to deserts around the world.

Initially, the increased competitiveness of solar power will disrupt coal, nuclear power, and natural gas in electricity markets, but in the long run that’s just the start. As more vehicles are powered by electricity and more electricity comes from solar power, it makes sense that solar indirectly replaces oil, especially if you are charging an electric vehicle (EV) at home. with solar power on the roof. We searched the companies that made this energy transition possible, and Sunrun (NASDAQ: RUN), SolarEdge (NASDAQ: SEDG)and Flashing load (NASDAQ: BLNK) are the three actions that three of our Motley Fool contributors see as solar energy actions that are disrupting oil right now.

Image source: Getty Images.

Solar is the “new king”

Howard Smith (Sunrun): Sunrun, the nation’s leading provider of residential solar services and related energy, has just expanded. The company completed the acquisition of Vivint Solar last week, giving it a base of more than 500,000 customers.

The combined companies have an enterprise value of around $ 22 billion and are one step closer to moving power generation home and away from fossil-fueled power plants. The company’s products “already have and will continue to help shut down inefficient carbon-producing power plants,” said Lynn Jurich, co-founder and CEO of Sunrun, in a statement on the acquisition.

Aerial view of the neighborhood with solar panels on many rooftops.

Image source: Getty Images.

Business leaders aren’t the only ones touting the growth of solar power at the expense of fossil fuels. In a new statement from the International Energy Agency (IEA), an autonomous global organization for industry, Executive Director Dr Fatih Birol said solar has become “the new king of electricity. “.

The agency just updated its global energy outlook for October and has provided four possible scenarios for how the global emergence of the COVID-19 pandemic is expected to affect energy production and demand. “Renewable energies are developing rapidly in all of our scenarios, with solar power at the center of this new constellation of power generation technologies,” the report said.

Investors looking to take advantage of this trend have already noticed Sunrun’s growth. Revenue has almost tripled since 2016, and the combination with Vivint Solar will only boost that growth. The share price, in turn, has also risen, with the vast majority of the gains being a 360% gain since the start of 2020.

But a recent pullback of almost 20% from its highs could mark the right time to invest in the longer-term scenario. Fossil fuels may not be quite obsolete, but the trend towards solar generation is on. Sunrun is a good way to invest in the residential side of this growth.

Helping Solar Power Beat Big Oil Everywhere

Jason hall (SolarEdge): Solar energy primarily disrupts coal and natural gas in the production of electricity. But the growth of electric vehicles around the world is impacting Big Oil where it matters most – in the use of petroleum as a transportation fuel. SolarEdge is positioned to benefit from the growth of renewable energy throughout the value chain.

The company’s biggest business today is module-level power electronics that connect the solar panels to the grid. Since its IPO just over five years ago, sales have increased by over 600%:

SEDG Revenue Graph (TTM)

SEDG Income (TTM) given by YCharts

And in the future, solar activity will remain important. But it won’t be the alone source of growth for SolarEdge. In recent years, management has taken steps to expand the business beyond its core business, and SolarEdge now offers electric vehicle chargers and electric vehicle powertrain component manufacturing.

Growth in demand for electric vehicles is expected to last for decades, and automakers are looking for trusted suppliers they can count on. With a long history as a reliable partner of solar panel manufacturers and installers, SolarEdge’s new business segments could go a long way in securing Big Oil’s most important source of revenue – automobiles.

Charge until the end of the oil

Travis Hoium (flashing charge): I’m going to go solar power a bit with this choice, but Blink Charging is tied to the solar industry in more ways than you might think. The choices Howard and Jason made are all about producing solar energy and transforming it into a usable form of energy. Blink Charging is about completing the cycle and bringing renewable energy into vehicles through a nationwide electric vehicle charging network.

Blink Charging has built or deployed 23,000 electric vehicle charging stations and is expanding its network at a rapid pace, even during the pandemic. Between June and August, the company sold or installed 539 electric vehicle chargers, up almost 100% from a year ago. The growing charger base gives the company more potential points of contact with users, who are growing in number as sales of electric vehicles pick up.

The connection with solar power is that the charger is what ends up making oil obsolete. I recently received a quote for solar panels on my roof; my family could not only generate enough solar power on our roof to replace grid electricity, but we could also add at least one and maybe two electric vehicles and provide them with enough electricity at home. Solar power on my roof could literally replace trips to the gas station, but a charger is needed to do that. And Blink Charging is one of the companies that make it possible to charge consumers and businesses through public charging networks.

If you look at oil stocks today, they’re going down because investors see this disruption coming. Wind and solar power become cheap enough to compete with fossil fuels, then electric vehicles become competitive with traditional vehicles, then the gas station is replaced by EV charging stations. A disruption in oil consumption is coming, and companies like Blink Charging are making that disruption possible.

The solar ecosystem is what matters

You can see here that the companies we have selected are operating in different parts of the solar and electric vehicle market, and that is how the industry works today. From solar power generation (Sunrun) to its integration in electric vehicles (Blink Charging) to the manufacture of electric vehicle components (SolarEdge), solar power is disrupting oil and has decades of room for growth as it replaces our traditional vehicle market.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


Comments are closed.