VSCould there be new momentum for solar stocks after Bloomberg Philanthropies and the International Solar Alliance announced a partnership to leverage $ 1 billion in global solar investment? Added to the mix, Atrato, an investment trust focused on renewable energy, particularly solar energy, is planning a £ 150million IPO next month, bolstering hopes of gradual energy integration. solar energy supply networks.
While these developments point to a positive future for solar stocks, it is also weighed down by the reality that the solar market’s growth trajectory is flattening, amid a global energy crisis.
Solar stocks facing short-term headwinds
The solar sector is hit by a plethora of issues, including rising material costs, accusations of forced labor in China and a trade war, reports Bloomberg, causing solar panel prices to rise annually for the first time since 2013.
A key issue is the polysilicon feedstock, which is refined primarily in Chinese factories using largely coal-based energy. A coal shortage has cut supplies of the metal used to make polysilicon, causing prices to skyrocket. On top of that, rising costs for steel, aluminum, and freight are also weighing down. The situation even led Guggenheim Securities to withdraw its buy rating on four solar stocks, citing growing risks to 2022 earnings, reports Bloomberg.
Total Bloomberg Philanthropies and International Solar Alliance plan to invest in global solar energy by 2030
Adding to this problem, nearly half of the world’s polysilicon supply is manufactured in Xinjiang, a region in western China facing allegations of forced labor and human rights violations. This led the US government to block imports of materials made by supplier Hoshine Silicon Industry.
There is still hope on the horizon. Solar panels remain cheaper than in October 2018, and new polysilicon factories, coupled with a possible end to power shortages in China, are expected to lead to lower prices by 2023. Solar companies also continue to grow. improve technology, which should lead to further cost improvements.
Will solar stocks benefit from a $ 1 billion investment in solar?
Bloomberg Philanthropies and the International Solar Alliance (ISA) have announced a partnership to inject $ 1 billion into the world by 2030 to help develop solar power in the 80 ISA member countries. They will develop a “solar investment action program”, alongside the World Resources Institute, which is expected to be launched at the UN climate conference COP26, reports powerengineeringint.com.
Bloomberg Philanthropies Founder Michael Bloomberg, who is also the UN Secretary General’s Special Envoy for Climate Ambition and Solutions, said: It is not being deployed enough … a solution that requires more collaboration … And more data to identify challenges and opportunities.
The Managing Director of the International Solar Alliance, Dr Ajay Mathur, said that “ISA has a vital role to play in helping to establish the infrastructure for a zero carbon future… our immediate goal is to ” identify and mobilize opportunities and capital to accelerate our solarization objectives. in the interim and in the long term. The news comes as the report on the intensification of solar energy in ISA member countries showed that Covid-19 prompted investment in solar projects last year to plunge 44% below average. 2019 levels in developing countries, and funding for energy startups fell 24% to $ 440 million. 2020, compared to 2019.
Decrease in investments in solar projects between 2019 and 2020
This injection of funds, combined with a new impetus from the current COP26 summit and a reduction in current roadblocks, should give significant impetus to solar actions over the rest of the decade and beyond.
Atrato IPO adds to solar wellness factor
Atrato Onsite Energy is set to become the first UK listed investment trust to offer investors exposure to ‘green power generation on site’, with a planned IPO of £ 150million on the London Stock Exchange by the end of November, under the symbol “TOIT”. Its main investments will target solar photovoltaic (solar photovoltaic) power generation systems and related infrastructure, which are mainly located on the roofs of commercial buildings, reports thisismoney.co.uk.
In addition to aiming for capital growth and ‘long-term, secure and progressive income’, the trust wishes to contribute to the UK’s net zero transition, adding renewable energy capacity and clean energy solutions. . Good Energy founder Juliet Davenport OBE will chair the board, with the portfolio managed by London-based asset management group Atrato. With electricity demand expected to double by 2050, solar will be “a key part of the solution,” Atrato said.
Invesco Solar ETF Offers Industry-Wide Investments in Solar Equities
Our ETF performance scanner shows that solar, represented by Invesco Solar ETF [TAN], ranked as the best-performing tracked theme last week – and over the past month – up 12.07% and 23.20% respectively at the close of Friday, October 29.
Increase in Invesco Solar ETF shares over the past month (as of October 29)
Investors can gain industry-wide exposure through an ETF, which invests in multiple solar stocks – the Invesco Solar ETF has over 50 stocks in its portfolio. The fund’s most weighted solar stocks are currently Enphase Energy [ENPH], with a weighting of 12.42%, SolaEdge Technologies [SEDG] with a weighting of 11.20% and First Solar [FSLR], which has a weighting of 7.01%.
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