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U.S. Solar Installations Exceed 2M Mark: 3 Stocks to Buy

Aparajita Dutta

Thanks to rapidly declining costs of solar modules, the number of solar installations in the United States recently surpassed the 2 million mark per the latest data provided by Wood Mackenzie Power & Renewables and the Solar Energy Industries Association (SEIA). This reflects a remarkable accomplishment, with the feat achieved in just three years after the industry completed its 1 millionth installation, a landmark that took 40 years to reach.

No doubt such positive trends will boost the growth of the U.S. solar industry that went through quite an upheaval last year. In fact, the industry has outperformed the broader market since the start of this year. The solar market has gained a solid 50.9% year to date compared with the S&P 500 composite’s rise of 13.7%.

 

We have briefly mentioned some factors that led the solar industry to deliver such an outperformance and issue optimistic projections.

Factors Driving Solar Installations

California played a vital role in boosting the growth of solar installations in the United States. This is largely due to a growing residential sector across the state. Notably, California represented 51% of the first million U.S. solar installations and 43% of the second million.

Moreover, decline in module costs due to a shift in Chinese feed-in tariff policy is driving procurement of utility-scale solar projects. Other growth catalysts include the technological advances made in battery storage and grid operators’ expanding toolset for renewable power integration.

Impressive Projections

The favorable trends are expected to lead the U.S. solar industry to new heights over the next few years. Wood Mackenzie forecasts U.S. solar installations to reach 3 million in 2021 and 4 million in 2023. While California will continue to lead the nation in installations, other faster growing states will also witness notable growth. Nearly 750,000 installations are expected in these markets over the next five years compared with 500,000 installations over the last five years.

Per the CEO of SEI, the $17 billion U.S. solar industry is on track to double again in five years.

Such solid projections should make investors confident about the below mentioned solar stocks’ capability to post solid operating results in the upcoming quarters.

Our Choices

With the help of the Zacks Stock Screener, we have identified three solar stocks that possess a favorable Zacks Rank and solid bottom-line growth potential.

JinkoSolar Holding Company Ltd. JKS, a solar panel manufacturer, boasts an earnings growth estimate of 81.7% year over year in 2019.  It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Enphase Energy Inc. ENPH, a solar inverter producer, expects earnings to increase a whopping 420% year over year  in 2019.  It currently carries a Zacks Rank #2.

SunPower Corp. SPWR, a solar energy systems provider, estimates 2019 loss to record year over year of 48.6%. It currently carries a Zacks Rank #2.

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Enphase Energy, Inc. (ENPH) : Free Stock Analysis Report
 
JinkoSolar Holding Company Limited (JKS) : Free Stock Analysis Report
 
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