Guggenheim Solar Index: PV stocks slip on short supply


From pv magazine 05/2021

05010_Stock_Index_0521_2sp-1In the month of April, the Invesco Solar ETF, an exchange-traded fund that tracks the MAC Global Solar Energy Index, underperformed relative to the S&P 500 and Dow Jones Industrial. The Invesco Solar ETF (TAN) decreased 8.7%, while the S&P 500 and DJIA increased 3.4% and 2.7%, respectively.

The top five solar stocks in the U.S. market that posted the largest losses were Sunworks (-40.7%), ReneSola (-24.7%), SunPower (-20.9%), Sunrun (-18.1%), and Sunnova (-16.2%). The utility-scale solar PV segment is currently facing multiple challenges, including: (1) price increases for trackers due to elevated steel prices; (2) containers not being available, as well as a U.S. trucker shortage, resulting in higher and higher freight costs; and (3) EPCs being sold out. In effect, the most prominent companies are most likely sold out and extending lead times.

Second-half optimism

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Despite the ongoing challenges, the solar industry is expected to witness growth in the second half of 2021. U.S. President Biden’s American Jobs Plan aims to create a more resilient grid and will solve a labor shortage in the solar industry. The new infrastructure bill has the potential to pass through the House before the fourth of July recess, though it is uncertain as to when the bill could move through the Senate and then into law (September, October, or at some point later in the fourth quarter).

While prices in the supply chain are mostly trending upwards, prices for glass have fallen, and prices for cells are also showing signs of weakness exiting Q1. The module segment has seen an overall drop in operating rates due to lower than expected end market demand. Many investors have been waiting for prices to drop since the Q4 installation rush last year. As a result, pricing in the glass and solar cell sectors have fallen or are beginning to fall as inventory pressures increase.

By Jesse Pichel

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