Deutsche Bank: yieldcos driving bullish solar outlook


Deutsche Bank has published an investment note that is very positive on the prospects for solar, in the wake of its Clean and Utilities Conference. Deutsche analysts met with 20 cleantech companies over the past two days at the event, leading it to draw the conclusion that the outlook for a number of solar companies and stocks remains positive.

Deutsche noted that solar stocks have outperformed the S&P index by some 20% to 25% thus far this year, with the outlook being that: “we expect the positive momentum to continue through the rest of 2015.”

Yieldcos were identified, by the Deutsche analysis, as being a prominent driver of growth in the solar sector, with the rapid expansion of the market in both India and China allowing for emerging market yieldcos to be formed. This, writes Deutsche, “is the next big potential catalyst [for growth].”

Research analyst Vishal Shah lead the preparation of the Deutsche investment note, and he observed that yieldcos had accelerated project pipeline growth and increased capital flows into the solar industry. “Yieldcos are enabling companies to sign relatively low priced PPAs.”

Looking towards individual companies, Deutsche provided a positive outlook for Yingli Green Energy, saying that it should benefit from “a strong demand environment.” Interestingly, Shah and the Deutsche analysts conclude that Yingli’s balance sheet concerns should “alleviate.”

In the U.S. market, Deutsche said that tier one module prices might be set to increase as demand exceeds supply.

The analysts also produced a positive assessment of solar leaser SolarCity, predicting that it should continue to expand its market share. It also said that the upside of SolarCity’s international expansion and deployment of storage technologies was not yet reflected in its share price.

Along with SolarEdge, Deutsche singled out SolarCity as representing the two most attractive solar stocks at present. SolarEdge became a publicly listed company earlier this year.