Biden invokes DPA and stops import duties: 3 solar actions up for grabs


you.S. solar stocks are expected to shine brightly in the days ahead following recent moves by the Biden administration to support the solar industry. In particular, the White House decided to waive any potential new tariffs on solar panels from four Southeast Asian countries for two years to boost solar installation at an affordable price.

Additionally, to accelerate domestic production of clean energy technologies, including parts of solar panels, Biden recently invoked the Defense Production Act (“DPA”).

Such strategies bode well for the growth trajectory of the US solar industry. This sheds light on major industry players like Enphase Energy ENPH, Sun Power SPWR and First Solar FSLR, who are well placed to rejuvenate under ongoing reforms.

How will the US solar industry benefit?

The US President’s recent authorization to use DPA will allow the Department of Energy to rapidly expand US manufacturing of five critical clean energy technologies, primarily solar panel parts, building insulation, heat pumps , equipment such as fuel cells and electrolysers, and power grid infrastructure. .

Additionally, as the DPA declaration empowers the government to induce funds for the domestic production of solar components, it will reduce the nation’s reliance on imports of solar components and parts. This, in turn, will further mitigate supply chain sensitivity and drive revenue growth for US-based solar panel manufacturers.

Additionally, given that the U.S. solar industry is heavily dependent on Southeast Asian countries for the supply of solar modules, by removing potential tariffs on solar components, Biden aims to lower the cost of components and facilitate the supply of solar components at present.

Lately, the U.S. solar industry has been grappling with pandemic-induced supply chain vulnerabilities and high component costs amid runaway inflation. Against this backdrop, the actions taken by the Biden-led government would help America duly achieve its goal of tripling domestic solar manufacturing capacity by 2024.

Actions to win

In light of the above factors, the US-based solar stocks that investors should keep on their watch list are:

Enphase Energy: Enphase enjoys a strong position as the leading US manufacturer of microinverters and holds a valuable position in the manufacture of fully integrated solar-plus-storage solutions.

In the first quarter of 2022, Enphase’s U.S. revenue grew 49% on a year-over-year basis. To further expand its market in the U.S. solar industry, ENPH acquired SolarLeadFactory, which provides high-quality leads to solar installers in the United States, in March 2022.

Sun Power: SunPower designs, develops, manufactures, markets and sells high-performance solar electric power technology products, systems and services worldwide for residential, commercial and utility-scale power plant customers.

SunPower added 16,500 customers in the first quarter of 2022, reflecting 40% year-over-year growth. SPWR expects its residential customer volume to increase by more than 35% in 2022 compared to 2021.

First Solar: First Solar is one of the world’s leading providers of complete solar PV power solutions and specializes in the design, manufacture and sale of solar electric power modules.

In 2021, First Solar announced plans to increase its manufacturing capacity by 6.6 Gigawaat (GW) by building its third manufacturing plant in the United States and its first manufacturing plant in India. Such capacity expansion will allow FSLR to maintain its position as the largest solar module manufacturer in the United States.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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