A Bright Future For Solar Stocks Powering The Future

A Bright Future For Solar Stocks Powering The Future

Renewable energy is definitely where the global economy wants to go, and we are witnessing changes on a daily basis. As small as they might seem, the shift away from fossil fuels is accelerating as clean, renewable energy becomes an increasingly less expensive option.

Solar power is one of the renewable energy sources that is just waiting to be "harvested," and it is one of the world's fastest-growing energy technologies. Ten years ago, globally installed solar power capacity was only 20GW. Today, we have a capacity of more than 600GW. The use of solar power will be increasing exponentially in the future. Everyone is thinking about how to get on board the solar power train.

JinkoSolar Earnings

JinkoSolar Holding Co. Ltd. JKS, one of the largest solar module manufacturers, reported its unaudited financial results for the third-quarter which ended on September 30th. The total revenues in third quarter were US $1.29 billion, which is an increase of 3.8% from the previous quarter and an amazing increase of 17.2% from the third quarter the year before. Gross profit margin decreased to 17% (from previous quarter's 17.9% and 18.5% YoY), mainly due to a decline in the solar modules' average selling price.

In the third quarter of 2020, the company reported a non-GAAP net income of $47.3 million which is an increase of 6.7% YoY, so non-GAAP basic and diluted earnings were $0.27 per ordinary share. On the asset side, JinkoSolar held $943.3 million in cash and cash equivalents and restricted cash, as well as $758.1 million in account receivables from third parties and US$1.14 billion in inventories. On the liabilities side, the company reported interest-bearing debts in the value of $2.53 billion.

Competitive environment

A prominent manufacturer of thin-film solar panels, First Soalr FSLR, currently has contracts to produce 12.2GW of new panels. Having in mind that the company's yearly capacity is around 5.5GW, First Solar has already secured revenues for the upcoming years. The financial position of $1.2 billion in net cash ensures the company's ability to deal with competition and to answer the market since it is expected that solar panel demand will double over the next five years.

As for a lower risk investment in the renewable energy field, the top energy producer from the wind and sun sector, NextEra Energy NEE, fits this description. The company has more projects in development than its whole current renewable portfolio and that should lead to strong growth over the following years. Considering its growth prospects along with the fact that the company is a leader in battery storage and green hydrogen, expect to see and hear a lot from NextEra in the future.

After we place the solar panels, we must turn to SolarEdge TechnologieSEDG and their power optimizers and inverters for lowering the cost of energy produced by solar panels. Same as other mentioned companies, SolarEdge's sales have been growing and are expected to continue doing so due to increasing demand for solar.

A bright future ahead

The decline in costs of new solar panels and wind turbines led to faster shift to renewable sources of energy. Alongside the lower costs, new technologies are brining is greater efficiency, making the choice of renewable source more and more sustainable. The demand will keep on raising so the story of the above companies can only get even more interesting.

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