One of solar energy’s most vocal bears flipped bullish this week, as Axiom analyst Gordon Johnson upgraded SolarCity Corp (NASDAQ: SCTY) from Sell to Hold and Trina Solar Limited (ADR) (NYSE: TSL), JA Solar Holdings Co., Ltd. (ADR) (NASDAQ: JASO) and Yingli Green Energy Holding Co Ltd (ADR) (NYSE: YGE) from Sell to Buy.
In a new research note, Johnson mentioned growing Chinese demand, higher substrate prices and relative recent underperformance as three reasons he is now bullish on solar stocks. However, one major catalyst remains up in the air, at least for another month or so.
Johnson sees a potential Hillary Clinton presidency as a major driver for solar energy.
Johnson points out that Clinton’s solar energy plan is targeting 140GW of U.S. solar installments by 2020. There is currently only 24GW of U.S. installments.
“So... take 140GW – 24GE = 116GW; then take 116GW ÷ 4 = 29GW/year; the US is on pace to do ~9GW in 2016, so that would be a 222% improvement in 2017,” Johnson told Benzinga.
“While highly unlikely, as investors start to consider these numbers, we feel there will be more optimism in the solar space.”
Johnson sees a potential Trump presidency as an entirely different story.
“Trump does NOT support solar,” Johnson added. “If he is elected, it will be negative for our short-term positive solar thesis.”
So far in 2016, the Guggenheim Solar ETF (NYSE: TAN) has been hammered, dropping 32.7 percent.
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