The need to lessen global dependency on fossil fuels should come as no surprise.
I remember sitting in a very specific environmental science lecture during my time as an undergrad.
The professor had completely taken me by surprise when he said that in approximately 50 years, all global fossil fuel resources would be depleted.
That will be nearing the end of my lifetime, but what will that mean for future generations? How will they survive in a planetary culture that has become so utterly dependent on coal, natural gas, and fuels?
The answer is renewable energy sources.
Simple enough, right?
In recent years, however, the rate at which innovations are made pales in comparison to the world’s energy consumption. Slowly but surely, that block is being chipped away.
The entire world has entered into what seems like a race to the finish: who can produce the most electricity with renewable energy sources? Some are doing better than others, but most countries are participating one way or another.
The leaders are Denmark, Portugal, and Iceland.
Denmark leads the pack, having produced about 50% of its electricity in 2016 from renewable sources such as geothermal, solar, tides, wind, biomasses, and biofuels. Portugal follows second, having produced over 30%. Iceland produced near to 30% as well.
The United States only produced little more than 5% of all electricity used in 2016 with renewable sources. Only 1% of that is produced with solar power.
However, good things are on the rise for the U.S. in 2017, especially in the solar sector
The Worst Solar Year Ever
2016 was not a good year for the big players in the solar.
However, 2017 looks like it will be the year of the little guy, rather than a resurgence of the larger companies that have taken a big hit in this past year.
They have a lot of catching up to do.
Big solar manufacturers such as JinkoSolar Holding Co., Ltd. (NYSE: JKS), Canadian Solar Inc. (NASDAQ: CSIQ), and JA Holdings Co., Ltd. (NASDAQ: JASO) all took major hits when Chinese installations tripled during the first part of 2016.
From February 2016 to December 2016, JASO fell 50.9%, JKS fell 45%, and CSIQ fell 57.9%
Even worse, panel prices dropped 25% unexpectedly. All of this occurred when these companies had undergone large expansions that year.
The debt accumulated as a result of this is staggering, some reaching into the billions.
Although 2017 looks to be a bright year for solar, Travis Hoium of The Motley Fool would be cautious jumping into these large manufacturers. They’ve got a rough year ahead.
Some of the lesser-known companies will step forward this coming year with new business models, new partnerships, and new groundbreaking technology.
SolarEdge Technologies (NASDAQ: SEDG)
Could there be an idealistically operated company that will provide stability and efficiency in the impending rocky future of solar?
It very well could be SolarEdge.
It has been praised time and time again for its global ascent into the market and for its innovative products such as photovoltaic inverters, power optimizers, and monitoring systems.
Where the larger manufacturing companies, like those mentioned above, suffered substantial losses in 2016, SolarEdge’s book value and net asset value have increased over 50% from the past year.
SolarEdge boats high liquidity measures with practically no debt, a solid balance sheet, positive earnings, cash flows, and innovative technology, making it an ideal solar company for investing, according to the experts at SeekingAlpha.
From research published by Financial Times, polled investment analysts unanimously agree that this company will outperform the market.
Its revenues and earnings are steadily rising higher and higher.
The results published went on to reveal that SolarEdge’s revenues for the first quarter of 2017 exceeded $128 million, an 11.67% increase from last year’s first-quarter results.
Also, its earnings per share for the first quarter of 2017 reached $0.46 per share. Compared to last year’s first quarter, earnings per share increased 27.78%.
Lastly, total revenues for 2016 reached $489.84 million, which was a staggering 50.68% increase from the prior year’s total revenue.
This is impressive stuff.
In a press release from last month, SolarEdge announced that its “award-winning HD-Waver inverter” set the latest efficiency record with the California Energy Commission (CEC). This inverter has reached 99% weighted efficiency, which is relatively unheard of.
Weighing approximately 25 pounds, this inverter is significantly smaller in size and weight than similar inverters from competitors.
SolarEdge was able to sacrifice size and bulk without compromising the efficiency of the product.
“At SolarEdge we are dedicated to making solar energy more accessible around the world by focusing on innovation,” stated Lior Handelsman, Vice President of Marketing and Product Strategy and Founder of SolarEdge. “Breaking this new record is in line with our commitment to lead the industry in solar energy advancement.”
With this kind of mentality and with a booming business structure, SolarEdge is above and beyond when it comes to optimizing the way solar is harvested for both the residential and commercial spheres.
Sunrun (NASDAQ: RUN)
These guys are just as innovative, but in different ways.
Sunrun has designed its own technology to completely eliminate the middleman. Instead of having technicians physically measuring residential rooftops, now there is BrightPath.
This software uses just a few pieces of information from the homeowners and utilizes satellite imagery to design a customized panel structure in a matter of seconds.
More recently, Sunrun was up 4.3% after it announced its new partnership with United Kingdom-based National Grid (NYSE: NGG).
Starting out, Sunrun will gain access to the grid’s 100,00 customers in single family homes all throughout New York in hopes of marketing both services.
The eventual goal of this joint venture will be to sell solar powered systems to homes and businesses and develop products and services for a power grid adapting to a new model of the smaller-scale local generation.
If they both can amass their assets into one package and successfully sell services from those assets, it could potentially create more value for all parties involved, says Hoium of The Motley Fool. It could ultimately be the catalyst for a surging positive trend for both companies.
The concept of intentionally grouped assets between partnered companies is a goal of many of its competitors.
The details of the new partnership includes a joint marketing agreement, a collaborative grid services pilot system, and a $100 million direct investment by National Grid in Sunrun’s rooftop solar systems.
The experts at Seeking Alpha note that they are gearing up for this new surge of business. Sunrun is hiring in preparation for the expected 29% increase in installations.
SolarWindow Technologies, Inc. (OTCQB: WNDW)
SolarWindow Technologies, Inc. has absolutely nothing to do with panels or with the manufacturing of their components.
It is the leading developer of transparent electricity-generating coatings for windows on towers and skyscrapers.
Earlier this month, the company announced that it has been named winner in the 2017 BIG Innovations Awards presented by the Business Intelligence Group.
This award is meant to recognize companies or individuals who have brought new ideas to life, changing the way consumers see and interact with the world.
SolarWindow’s technology is designed to transform ordinary skyscrapers into incredibly efficient “clean power generators.”
Company officials had this to say about their liquid coatings when speaking with Business Wire:
When applied to a 50-story building, SolarWindow could avoid more than two million miles of equivalent carbon dioxide emitted by vehicles on the road, reduce electricity costs by as much as 50 percent per year, provide 15-times the environmental benefits over other roof-top solar PV systems, and according to independently-validated engineering modeling, could achieve a one-year financial payback.
Unlike other conventional photovoltaic systems, SolarWindow’s window coatings can generate electricity using natural and artificial light. It can still generate in poorly lit, reflected light and even shaded environments.
Aside from being an award-winning product, SolarWindow’s coatings have been presented before and are now recognized by Congress.
With innovation like this, entire cities would essentially become forests of green electrical generators.
The End of the Dark Age
Until recently, solar technology in the U.S. was embarrassingly prehistoric compared to that of other countries.
It’s time for our solar sector to come out of the dark age.
Companies like these with their progressive technologies and innovations could ultimately reshape the way solar is harnessed and used in the United States.
Until next time,
John Peterson
Pro Trader Today