Chicago, IL – May 28, 2015 – Today, Zacks Equity Research discusses the Alternative Energy, including JinkoSolar Holding Co., Ltd. (JKS), JA Solar Holdings. Inc. (JASO), Trina Solar Ltd. (TSL) and Canadian Solar Inc. ( CSIQ). Industry: Alternative Energy Link: https://www.zacks.com/commentary/46899/alt-energy-stock-outlook---may-2015 Can Alternative Energy Stop Global Warming? Environmental considerations have been driving the demand for alternative energy sources. As per International Energy Agency, the share of renewables in total power generation is expected to rise to 33% in 2040 from 21% in 2012. Again, a U.S. Energy Information Administration (“EIA”) report reveals that for 2016, growth in renewables consumption for electric power and heat generation is projected to continue at a rate of 4.5%.
These favorable demand growth trends notwithstanding, the recent abundant availability of fossil fuels and the resultant drop in oil prices has emerged as a key competitive challenge for the industry. The industry’s long-term fundamentals nevertheless remain favorable.
Below we discuss some of the major alternative energy sources.
Solar
A major growth area in the renewable space is solar energy. An EIA report indicates continued growth in utility-scale solar power generation, which is projected to average almost 83 gigawatt (“GW”) hours per day in 2016. In spite of the rapid uptake, solar will still be just 0.7% of total U.S. utility-scale generation in 2016 indicating room for immense growth.
Solar growth has historically been concentrated in customer-sited distributed generation installations. EIA expects utility-scale solar capacity to expand over 84% between end 2014 and end 2016, with about half of this new capacity being built in California.
In addition, the current U.S. administration’s efforts to restrict carbon emissions are a net positive for renewable energy stocks. The proposed climate-change plan is a very bold attempt to address the global warming issue. A proposed new Clean Power Plan from the Environmental Protection Agency, if implemented, would reduce carbon emission from power plants by 30% by 2030, compared to 2005 levels.
The administration’s earlier environmental plan, unveiled in Jun 2013, had put additional limits on existing coal-fired plants. The administration issued directives asking environmental regulators to set up carbon pollution standards for active plants. Coal generates about 40% of U.S. electricity and coal plants are the largest source of carbon emissions in the country.
Per the latest report released by the Solar Energy Industries Association (“SEIA”), the U.S. trade association of approximately 1,000 companies in the solar energy industry, the U.S. solar energy industry grew 30% year over year to reach 6,201 megawatt (“MW”) in 2014. This marked the largest year ever of solar installations in the history of the market, buoyed by strong contribution from each of the three segments -- utility, commercial and residential. The utility solar photovoltaic (“PV”) market, in particular, grew 38% year over year. In 2014, more than 32% of all new electricity generation came from solar energy. This brings solar to the second spot after natural gas.
SEIA expects the U.S. PV market in 2015 to witness yet another strong year with installations reaching 8.1 GWdc, representing a 31% increase over 2014.
Solar in China: China, the world’s prime manufacturer of solar panels, is emerging as the leading market for solar PV to meet the growing need for clean energy. The Chinese government announced new policies to encourage local governments to promote more solar installations on home and business rooftops as well as set up ground mounted plants of up to 20 MW. Although the Chinese National Energy Administration or NEA had earlier set a target of installing 14 gigawatts (GW) of solar capacity in 2014, the country could only achieve 10.6 GW. But the NEA is unfazed and has set an ambitious goal of installing 17.8 GW of solar capacity in 2015, which is about 18.7% higher than the previous 15 GW proposal announced in February. The NEA has called on local governments of all regions to focus on distributed generation.
China has also pledged to attain peak carbon emissions by 2030 or earlier if possible. The country has set a daunting goal of boosting the share of non-fossil fuels to 20% of its energy mix by 2030 (read: China Raises 2015 Solar Target: 2 Stocks in Focus ).
The following leading Chinese solar stocks are sure to make the most of the favorable government stimulus: JinkoSolar Holding Co., Ltd. (JKS), JA Solar Holdings. Inc. (JASO) and Trina Solar Ltd. ( TSL).
Ontario, Canada-based solar product manufacturer Canadian Solar Inc. (CSIQ) is also well positioned with its diversified manufacturing base and project portfolio in Canada, China, Japan and the U.S.
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JINKOSOLAR HLDG (JKS): Free Stock Analysis Report
JA SOLAR HOLDGS (JASO): Free Stock Analysis Report
TRINA SOLAR LTD (TSL): Free Stock Analysis Report
CANADIAN SOLAR (CSIQ): Free Stock Analysis Report
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