The Solar Industry -- Is it time to take notice?

TLDR: High level research into why we are considering adding Solar and Renewable energy stocks to our long term portfolio. Three part series outlining industry leaders and emerging companies in this space.

If you’re like me, I prefer to wait to see a certain technology gain market share before adopting. I was guilty of buying a Microsoft Zune instead of an Apple iPod, and nearly purchased an HD-DVD instead of a Blu Ray player.

Some of you might relate to this experience. Ultimately, both decisions involve adopting a technology that hasn’t been widely adopted by the masses; first movers dilemma as I call it.

With Solar coupled with EV, I decided to wait. I see a growing number of Tesla’s on the street compared to a few years ago. With the recent price decreases, consumers are taking advantage of the tax refund being provided. 

It seems as though Tesla is becoming the new Camry or Civic of today’s times. Everyone is starting with a Tesla! This has led me to start considering Solar companies as part of my portfolio. 

As someone who has recently gone through the process. Over the last year I had solar panels installed on my house (due to the tax credit) and bought a Tesla. Charging at home avoids the fear that range anxiety brings on. 

This was just one reason to install solar panels. There are a few other compelling reasons to start considering adding Solar related companies to your portfolio:

1. Industry experts

   1. My nephew has been working in this industry for several years and seeing his passion grow leads me to believe there’s momentum to finally consider the industry as a long term investment

      1. The Invesco Solar ETF (TAN) has seen its market cap grow by over 100% in the last 5 years. As of February 24, 2023, the fund's market cap is $705 million, up from $345 million in February 2018. This growth is due to a number of factors, including the increasing popularity of solar energy, the falling cost of solar panels, and the growing demand for clean energy.

      2. The TAN ETF tracks the S&P Global Clean Energy Index, which includes companies that generate revenue from the production, delivery, or sale of clean energy technologies. The fund's top holdings include First Solar, SunPower, and Tesla.

      3. The growth of the TAN ETF is a positive sign for the solar industry. It indicates that investors are increasingly confident in the potential of solar energy to provide clean, reliable, and affordable energy.

2. Change in stance

   1. Consumers are considering renewable energy as a primary source of energy for their homes and businesses

   2. More awareness for clean energy where cost differences are becoming negligible - You can subsidize your electric bill with installing solar

   3. Awareness of carbon emissions outweigh the costs associated with renewable energy

3. Change in laws and incentives

   1. Government subsidies and tax incentives are pushing home owners to consider owning solar

   2. Certain states are now requiring all new homes to have solar panels installed vs traditional gas setups

4. Technology is getting better

   1. Solar panels are getting smaller and more efficient

   2. Inverters are improving for greater yield

As a starter, we dive into some solar stocks and their recent performance.

FSLR (First Solar Inc.)

• It had a long consolidation phase from March ‘22 - July ‘22 where price did not move too much and was stuck in a range

• Price broke out from $81, increasing 250% over the last 8 months, something worth noting

SPWR (SunPower)

• This company has not been as lucky as FSLR with with a 54% decrease over the last few months

There are differences in each of the solar companies consumers can choose from residentially or commercially. Technology is always advancing which lends credibility. As we continue down the path of electrification and how non-renewable resources have shown to increase in price over time (rising utility costs), solar could be a worthwhile investment to research for your portfolio.