U.S. solar stocks are likely to shine brightly in the days ahead, following the recent actions taken by the Biden administration in favor of the solar industry. In particular, the White House has decided to waive off any potential new tariffs on solar panels from four Southeast Asian nations for two years to boost solar installation at an affordable price.
Further, to accelerate the domestic production of clean energy technologies, including solar panel parts, Biden recently invoked the Defense Production Act (“DPA”).
Such strategies bode well for the U.S. solar industry’s growth trajectory. This puts the spotlight on major industry participants like
Enphase Energy
ENPH
,
SunPower
SPWR
and
First Solar
FSLR
, which are well-poised to rejuvenate amid the current reforms.
How Will the U.S. Solar Industry Benefit?
The recent authorization by the U.S. President to use DPA will enable the Department of Energy to rapidly expand the American manufacturing of five critical clean energy technologies, mainly solar panel parts, building insulation, heat pumps, equipment like fuel cells and electrolyzers and power grid infrastructure.
Moreover, as the DPA declaration empowers the government to induce funds for the domestic production of solar components, it will reduce the dependence of the nation on the imports of solar components and parts. This, in turn, will further ease supply-chain susceptibility and boost the top-line growth of U.S.-based solar panel manufacturers.
Further, considering that the U.S. solar industry relies heavily on Southeast Asian countries for the supply of solar modules, by waiving off potential tariffs on solar components, Biden aims to lower the cost of components and ease the supply of solar components at present.
Of late, the U.S. solar industry has been encountering pandemic-induced supply-chain vulnerabilities and a high cost of components amid soaring inflation. Against this backdrop, actions taken by the Biden-led government would help America duly achieve its target of tripling the domestic solar manufacturing capacity by 2024.
Stocks to Gain
In light of the aforementioned factors, U.S.-based solar stocks that investors should keep in their watchlist are:
Enphase Energy
: Enphase enjoys a strong position as a leading U.S. manufacturer of microinverters and has a valuable position in manufacturing fully integrated solar-plus-storage solutions.
In the first quarter of 2022, Enphase’s revenues from the United States improved a solid 49% on a year-over-year basis. To further expand its market in America’s solar industry, ENPH acquired SolarLeadFactory, which provides high-quality leads for solar installers in the United States, in March 2022.
SunPower
: SunPower designs, develops, manufactures, markets and sells high-performance solar electric power technology products, systems and services worldwide for residential, commercial and utility-scale power plant customers.
SunPower added 16,500 customers in the first quarter of 2022, reflecting growth of 40% year over year. SPWR expects its residential customer volume to grow by more than 35% in 2022 over 2021.
First Solar
: First Solar is a leading global provider of comprehensive PV solar energy solutions and specializes in designing, manufacturing and selling solar electric power modules.
In 2021, First Solar announced plans to expand its manufacturing capacity by 6.6 Gigawaat (GW) by constructing its third manufacturing facility in the United States and first manufacturing facility in India. Such capacity expansion will enable FSLR to maintain its position as the largest U.S. solar module manufacturer.
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