3 solar stocks in the spotlight amid the solar boom in California


With the gradual recovery of the US economy over the past two quarters, the solar market has returned to a growth path supported by solid installation activities. The State of California is the leader in the US solar market in terms of capacity.

As reported by the Solar Energy Industries Association (SEIA), California ranks first in solar power generation in the United States, with solar power supplying more than 20% of California’s electricity today. Naturally, there has been an increase in the activities of leading solar companies like SunPower SPWR in the state, which may attract the attention of investors.

What led to the boom?

As in the rest of the country, the tendency for the price of solar modules to fall rapidly due to the improvement in labor productivity; low supply chain costs and increased module efficiency have also been observed in California. The Breakthrough Institute found that the value of solar energy has fallen by about 37% since 2014 compared to other sources of electricity, after analyzing six years of hourly production and price data from the California Independent System. Operator (CAISO). This surely offers a great incentive for solar installers.

Both the weather and the economic environment in California have supported a boom in the solar market. For example, the California Energy Commission’s New Solar Homes Partnership (NSHP) program was created as part of a statewide solar incentive program called the California Solar Initiative (CSI), which was launched in January 2007. The program was intended to provide incentives for integrating solar power systems into the construction of new homes in investor-owned utility (IOU) territories. In addition, the solar investment tax credit has boosted the solar market in this state.

Look ahead

In August 2021, the California Energy Commission approved rules that would require new buildings, including multi-family dwellings and commercial structures, to be equipped with solar storage and batteries. This should give new impetus to solar growth in the state.

Going forward, to help meet California’s goal of 50% renewable power generation by 2025, CAISO plans to add an additional 1.6 gigawatt (GW) of solar capacity scale-up. utilities in 2021, according to a report released by the US Energy Information Administration in August. CAISO had planned to add 2.5 GW of battery storage capacity in 2021. These projections give us confidence that the solar boom in California will continue in the coming days.

Actions to watch

Given the aforementioned discussion, let’s take a closer look at three solar stocks that have a strong presence in California and are therefore poised to do well.

Sunrun RUN signed contracts with three Community Choice Aggregators (CCAs) in the San Francisco Bay Area of ​​California, designed to meet state-mandated resource adequacy requirements, in August 2021. In 2020, the The company had signed contracts to install up to 20 megawatts (MW) of solar battery systems for approximately 6,000 homes served by CCAs East Bay Community Energy, Peninsula Clean Energy and Silicon Valley Clean Energy. The company wears a Zacks Rank # 3 (Hold).

Canadian solarCSIQ’s subsidiary, Recurrent Energy completed the divestiture of its Slate project in California to Goldman Sachs Renewable Power in January 2021. With a production capacity of 300 megawatts of alternating current (MWac), Slate was the world’s largest solar storage project. and storage of Recurrent Energy. . In May 2021, Recurrent Energy won a contract to build the $ 550 million Crimson solar project from the Biden administration. The company holds a rank 3 of Zacks. You can see The full list of Zacks # 1 Rank (Strong Buy) stocks today here.

Renesola SOL won a power purchase contract (PPA) for the production of a 20 MW solar project in California in December 2020 which will be coupled with 6.5 MW / 26 MWh of battery storage. Output from the complex will be purchased by Northern California-based electricity supplier Valley Clean Energy. The company holds a rank 3 of Zacks.

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Renesola Ltd. (SOL): Free Stock Analysis Report

Canadian Solar Inc. (CSIQ): Free Stock Analysis Report

SunPower Corporation (SPWR): Free Inventory Analysis Report

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