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Zacks Industry Outlook Highlights: JinkoSolar Holding, JA Solar Holdings, Trina Solar and Canadian Solar

Zacks Equity Research

For Immediate Release

Chicago, IL – September 16, 2016 – Today, Zacks Equity Research discusses the Alternative Energy, including JinkoSolar Holding Co., Ltd. (JKS), JA Solar Holdings. Inc. (JASO), Trina Solar Ltd. (TSL) and Canadian Solar Inc. ( CSIQ).

Industry: Alternative Energy

Link: https://www.zacks.com/commentary/90640/alternative-energy-outlook---september-2016

The U.S. renewable energy sector witnessed a number of important decisions last year from both state and federal governments. These decisions continue to play a key role in determining this industry’s future growth trajectory.

Governments, businesses and cities around the world are making concerted efforts to speed up the evolution of energy use. As the global energy system transformation is the backbone of climate action, the world has come closer under a set of major cooperative initiatives. It is these environmental considerations that are driving the demand for alternative energy sources.

A U.S. Energy Information Administration (“EIA”) report projects that electricity generation from renewable sources will increase 9.5% in 2016 and 5.8% in 2017 in the country. Generation from renewables other than hydropower is forecast to climb 11.8% in 2016 and 11.1% in 2017. A more comprehensive study by the Department of Energy’s National Renewable Energy Laboratory (NREL) shows that the country will be able to generate most of its power requirements from renewable sources by 2050.

These favorable demand growth trends notwithstanding, the abundant availability of fossil fuels and the resultant drop in oil prices have emerged as key competitive challenges for the industry. The industry’s long-term fundamentals, nevertheless, remain favorable.

Here, we discuss some of the major alternative energy sources:

Solar

A major growth area in the renewable space is solar energy. An EIA report indicates continued growth in utility-scale solar power capacity, which is projected to average almost 13.3 gigawatt (“GW”) in the 2016–2017 period. In spite of the rapid uptake, solar will still be just 1% of the total U.S. utility-scale generation in 2017, indicating room for immense growth.

Solar growth has historically been concentrated in customer-sited distributed generation installations. The EIA expects utility-scale solar capacity to expand over states like California, Nevada, North Carolina, Texas and Georgia.

The solar industry in the U.S. is booming. The solar Investment Tax Credit (“ITC”) has gone a long way in providing the industry stability and expansion. In the last 10 years, solar has witnessed a compound annual growth rate of almost 60%, with the cost of installation dropping by over 70%.

Over the past few years, utility-scale solar has represented almost two thirds of the market, and this trend will likely continue through 2016, given the huge pipeline of projects under construction.

The Solar Energy Industries Association (“SEIA”), expects the U.S. solar market to witness strong growth in 2016 with installations peaking 14.5 GW DC, representing almost double the capacity over 2015. At the end of this decade, there will be vigorous growth across all three market segments, attaining a 20 GW annual solar market.

Solar in China: Although Chinese economic woes continue to hurt the market, the longer-term prospects for solar in China remain intact. The country has established itself as the world’s largest market for solar panels and will likely be the home to a quarter of the planet’s new energy capacity from solar panels in the years to come. China is speedily adding as much power generation as possible, and solar is just one source of the new energy generation coming up in the country.

In Mar 2016, China released its 13th Five-Year Plan that outlined considerable investments in the renewables sector. The country’s National Energy Administration (NEA) announced plans to triple capacity over the next five years, to reduce China’s carbon emissions and become the world’s leader in clean energy. The nation is aiming for 110–150 GW of capacity by 2020.

China had earlier pledged to attain peak carbon emissions by 2030 or earlier if possible. The country had set a daunting target of boosting the share of non-fossil fuels to 22% of its energy mix by 2030.

The following leading Chinese solar stocks are sure to make the most of the favorable government stimulus: JinkoSolar Holding Co., Ltd. (JKS) , JA Solar Holdings. Inc. (JASO) and Trina Solar Ltd. ( TSL) .

Ontario, Canada-based solar product manufacturer, Canadian Solar Inc. (CSIQ) is also well positioned with its diversified manufacturing base and project portfolio in Canada, China, Japan and the U.S.

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JINKOSOLAR HLDG (JKS): Free Stock Analysis Report
 
JA SOLAR HOLDGS (JASO): Free Stock Analysis Report
 
TRINA SOLAR LTD (TSL): Free Stock Analysis Report
 
CANADIAN SOLAR (CSIQ): Free Stock Analysis Report
 
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