Investor Alert

June 28, 2021, 6:58 a.m. EDT

Are Your Solar Stocks Safe?

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Also on the move is San Jose, California-based Sunpower Corp. (-1.22%), with SPWR shares nearly 10% up over the past five trading days. SunPower manufactures crystalline silicon photovoltaic cells and solar panels based on an all-back-contact solar cell technology.

SunPower really is an old head in the solar industry and has tried its hand at many aspects of the business. However, the company's latest act involves becoming a more specialized player in solar technology, after selling its microinverters business to Enphase in 2018 and completing the acquisition of Maxeon /zigman2/quotes/220015328/composite MAXN -5.09% in 2019.

A key benefit of this strategy has been a reduction in SunPower's cost of capital and a healthier balance sheet. It's too early to tell whether SunPower's streamlining efforts will pay off in the long run but if you love a good turnaround story, this company might be a good buy.

Losers: Chinese Manufacturers

The ban by the Customs and Border Protection comes days after the Commerce Department's Bureau of Industry and Security banned four other firms located in Xinjiang to its "entity list": Xinjiang Daqo New Energy Co., Xinjiang East Hope Nonferrous Metals Co., Xinjiang GCL New Energy Materials Technology Co., and the Xinjiang Production and Construction Corps.

All the four companies are involved in the manufacture or use of polysilicon products, with Xinjiang Production and Construction Corps having been the target of a previous import ban by the Trump administration.

Daqo New Energy Corp., another polysilicon maker with a factory in Xinjiang, has dipped 7% after the news. Daqo is a Chinese company that manufactures monocrystalline silicon and polysilicon solar PV systems.

Daqo's addition to the entity list has come despite the company recently going out of its way and hosting a visit to its main manufacturing facility in Xinjiang in an extraordinary effort at transparency.

And the ban will certainly not make life any easier for one of China's leading solar names, Jinko Solar.

One of the biggest trends that has been driving the phenomenal growth being witnessed in the renewable energy sector is falling costs. And nowhere has this been more evident than the solar sector. Indeed, solar photovoltaics (PV) has seen the sharpest cost decline of any electricity technology over the last decade, with the International Renewable Energy Agency (IRENA) finding that between 2010-2019, the cost of solar PV globally dropped by 82%.

But that bullish thesis is now in grave danger.

A quadrupling in the cost of polysilicon has pushed solar module prices up 20% YTD and threatens to lay to waste years of gains.

Polysilicon makers have struggled to keep up with demand, lifting prices to as high as $25.88/kg, up from $6.19/kg less than a year ago.

Jinko's been in correction mode for most of the year due to the said supply chain issues. Since January, the shares have lost nearly 40%.

Overall, Biden's latest move is likely to be strongly bullish for U.S. solar equipment manufacturers over the long term.

Just months after president Biden rejoined the Paris Climate accord, global energy market navel-gazer IHS Markit has ranked the United States as the most attractive market for renewable energy investments in the world.

The United States has claimed the top spot on the latest IHS Markit Global Renewables Markets Attractiveness Rankings mainly on sound market fundamentals and the availability of an attractive--though phasing down--support scheme. The survey

tracks attractiveness for investment for non-hydro renewables such as solar PV, offshore wind, and onshore wind. The ranking evaluates each country on the basis of seven subcategories that include market fundamentals, current policy framework, infrastructure readiness, investor friendliness, revenue risks and return expectations, easiness to compete and the overall opportunity size for each market.

By Alex Kimani for Oilprice.com


Is there a problem with this press release? Contact the source provider Comtex at editorial@comtex.com. You can also contact MarketWatch Customer Service via our Customer Center.

US : U.S.: Nasdaq
$ 19.02
-1.02 -5.09%
Volume: 230,261
Nov. 26, 2021 1:00p
P/E Ratio
Dividend Yield
Market Cap
$886.42 million
Rev. per Employee

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