Per the Preliminary Monthly Electric Generator Inventory report recently published by the U.S. Energy Information Administration, solar power and battery storage projects are projected to constitute 60% of the 85 gigawatts (GW) of new electricity generating capacity to be added in the United States during the 2022-2023 period.
Naturally, such an impressive forecast brings the spotlight on solar stocks, especially the ones engaged in manufacturing and handling storage batteries and associated technologies, like
Enphase Energy
ENPH
,
SolarEdge Technologies
SEDG
and
SunPower
SPWR
.
Key Notes from the Projection
Between 2020 and 2021, 24 GW of utility-scale solar photovoltaic (PV) capacity was added to the U.S. power grid. Expecting to witness a similar trend, 41 GW of the new electricity generation capacity is projected to come from utility-scale solar in the next two years, buoyed by catalysts like plummeting solar technology costs and the extension of the solar investment tax credit.
The battery storage capacity to be added to the U.S. power grid during 2022-2023 is expected to be 10 GW. Factors like declining costs for battery storage applications along with favorable economics, when deployed with renewable energy, should boost the expansion of battery storage.
Together, solar and battery storage capacities to be added to the U.S. power grid in the next two years will be 51 GW. This projection implies an improvement of 4.1% from 49 GW expected in the Electric Monthly update posted in December.
Stocks to Watch
Considering the aforementioned discussion, it is obvious that the U.S. solar stocks with a keen involvement in the battery storage space should benefit and thus must stay on investors’ watchlist. Some of these stocks are:
Enphase Energy
enjoys a solid position in the solar market. It manufactures fully integrated solar-plus-storage solutions. Its next-generation battery in North America is Enphase Encharge 3 and Encharge 10 storage systems, with a usable and scalable capacity of 3.4 kWh and 10.1 kWh, respectively.
The company expects to ship between 110 and 120 megawatt-hours of batteries in the first quarter, implying an almost 15% improvement from the fourth quarter. The Zacks Consensus Estimate for 2022 earnings and sales suggests a 30% and 45% improvement over the prior-year quarter’s reported figures, respectively.
SolarEdge Technologies
launched its residential battery, the SolarEdge energy bank in 2021. This is a 10-kW single-phase battery that integrates with its SolarEdge energy hub family of inverters. Some existing SolarEdge systems can be upgraded with a storage solution for both backup or on-grid maximum self-consumption use.
The stock boasts a long-term earnings growth rate of 21.5%. The Zacks Consensus Estimate for 2022 earnings indicates a 44% improvement over the prior-year quarter’s reported figure.
SunPower
’s SunVault storage solution is primarily designed for residential customers and its two-box solution fits in indoor or outdoor areas. In the fourth quarter of fiscal 2021, the company launched its Virtual Power Plant (“VPP”), which will enable SunVault energy storage customers to get paid for allowing the utility to use stored energy during peak demand and contribute to a more stable power grid in their community.
The company boasts a long-term earnings growth rate of 215.6%. The Zacks Consensus Estimate for 2022 earnings implies a solid 457% improvement over the prior-year quarter’s reported figure.
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