U.S. Markets closed
  • S&P 500

    +11.90 (+0.34%)
  • Dow 30

    -28.09 (-0.10%)
  • Nasdaq

    +42.28 (+0.37%)
  • Russell 2000

    +10.25 (+0.63%)
  • Crude Oil

    -0.86 (-2.12%)
  • Gold

    -1.20 (-0.06%)
  • Silver

    -0.01 (-0.04%)

    +0.0042 (+0.3560%)
  • 10-Yr Bond

    -0.0070 (-0.83%)
  • Vix

    -0.56 (-1.99%)

    -0.0042 (-0.3207%)

    -0.1200 (-0.1145%)

    -311.97 (-2.34%)
  • CMC Crypto 200

    -1.40 (-0.54%)
  • FTSE 100

    +74.63 (+1.29%)
  • Nikkei 225

    +42.32 (+0.18%)

Will the Sun Shine on Solar Stocks This Year? 4 Picks

Archan Sarkar

The U.S. solar market performance was marred by a few factors in 2018. Trump’s sanction of 201 tariffs, which levied a 30% import tax on solar panels, was one of the primary concerns. China dealt a heavier blow by significantly cutting subsidies for its solar projects.

Other factors like big tender cancellations in India, feed-in tariff cut policy made by Japan and lack of clarity around the memorandum of understanding between Saudi Arabia and SoftBank’s Vision Fund for 200 gigawatts of solar PV with storage acted as deterrents for the solar industry, which lost 26.9% last year.

Will the Solar Market Bounce Back?

Things are expected to change for the better for the solar market in 2019. A sneak peak in to the market’s projections for the current year can substantiate that.

Per a projection by the Energy Information Administration (EIA), the U.S. electric power sector is set to add more than 4 GW of new solar capacity in 2019, with electricity generation from utility-scale solar generating units projected to grow 10% this year.  

Factors Driving Solar Growth

Deployment of utility-scale projects remains a major growth driver for the U.S. solar market. Per a recent EIA report, 69% of solar generation was utility-scale in 2018. To this end, Wood Mackenzie has lifted the utility solar forecast for 2019 from 6.9 to 7.2 gigawatt dc.

Notably, declines in module costs due to a shift in Chinese feed-in tariff policy are driving additional procurement of utility-scale solar projects.

Other major factors expected to drive solar growth within U.S. are the technological advances made for battery storage and grid operators’ expanding toolset for renewable power integration.

Our Choices

In view of the aforementioned prospects, we have handpicked three players from the Zacks Solar industry with a Zacks Rank of #1 (Strong Buy) or 2 (Buy) which may prove to be promising investment bets. You can see the complete list of today’s Zacks #1 Rank stocks here.

Canadian Solar CSIQ is a manufacturer of solar PV modules and provides turn-key solar energy solutions. The company, sporting a Zacks Rank #1, delivered an average earnings surprise of 65.51% for the last four quarters and has an estimated long-term earnings growth rate of 32%.

Azure Power Global AZRE, a Zacks Rank #1 company, is an independent power producer and operator of utility and commercial scale solar PV power plants. It delivered an average earnings surprise of 106.49% for the last four quarters and has a year-over-year earnings growth estimate of 800% for fiscal year 2019.

SunWorks Inc. SUNW, a Zacks Rank #1 company, specializes in providing solar power solutions to commercial, agricultural and residential customers. It delivered an average earnings surprise of 7.50% in the last four quarters and has a year-over-year earnings growth estimate of 142.86% for fiscal year 2019.

Enphase Energy ENPH, a Zacks Rank #2 company, specializes in delivering microinverter technology for the solar industry. It delivered an average earnings surprise of 33.34% in the last four quarters and has a year-over-year earnings growth estimate of 310% for fiscal year 2019.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Sunworks, Inc. (SUNW) : Free Stock Analysis Report
Enphase Energy, Inc. (ENPH) : Free Stock Analysis Report
Azure Power Global Ltd. (AZRE) : Free Stock Analysis Report
Canadian Solar Inc. (CSIQ) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research