Chicago, IL – January 20, 2016 – Today, Zacks Equity Research discusses the Alternative Energy, including JinkoSolar Holding Co., Ltd. (JKS), JA Solar Holdings. Inc. ( JASO), Trina Solar Ltd. (TSL) andCanadian Solar Inc. (CSIQ) Industry: Alternative Energy Link: https://www.zacks.com/commentary/68701/alt-energy-stock-outlook---jan-2016 Governments, businesses, and cities around the globe are making concerted efforts to speed up the energy evolution. As the global energy system transformation is the backbone of climate action, the world has come closer under a set of major cooperative initiatives. Indeed, environmental considerations have been driving demand for alternative energy sources. A U.S. Energy Information Administration (“EIA”) report projects that electricity generation from renewable sources to increase to 18% by 2040 in the country from 13% in 2013. For 2016, EIA expects total renewables used in the electric power sector to increase by 9.5%. A more comprehensive study by the Department of Energy’s National Renewable Energy Laboratory (NREL) shows that the country can generate most of its electricity from renewable sources by 2050.
These favorable demand growth trends notwithstanding, the abundant availability of fossil fuels and the resultant drop in oil prices have emerged as key competitive challenges 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 129 gigawatt (“GW”) hours per day in 2017. This marks a 45% increase from the 2016 forecast. In spite of a rapid uptake, solar will still be just 1.1% of total U.S. utility-scale generation in 2017, indicating room for immense growth.
Solar growth has historically been concentrated in customer-sited distributed generation installations. The EIA expects utility-scale solar capacity to expand over 126% between 2014 and the end of 2016, with about 38% of this new capacity being built in California .
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 reached 1,361 megawatt (“MW”) DC in the third quarter of 2015, bringing the cumulative PV installations to 22.4 GW DC mark, buoyed by strong contributions from each of the three segments: utility, commercial and residential.
Particularly, the residential market grew 69% year over year, setting a new quarterly record.
The SEIA expects the U.S. PV market in 2015 to witness yet another strong year with installations reaching 7.4 GW DC, representing a 19% increase over 2014. Solar in China : Although Chinese economic woes continue to hit the market, the longer-term prospects for solar in China remain intact. China has established itself as the world’s largest market for solar panels and will likely be the home to a quarter of the planet’s new energy capacity from solar panels in 2015, according to a report from GTM Research. China is speedily adding as much power generation as possible, and solar is just one source of new energy generation in the country.
While outlining its clean energy goals for 2016, China ’s National Energy Administration (NEA) has set a target of 15 GW of new solar PV capacity, which is slightly lower than the goal of 17.8 GW of new additional capacity set for 2015. The country has a larger goal of reaching 150 GW of solar PV capacity by 2020. According to the NEA, China will end 2015 with 43 GW of cumulative solar PV capacity installed.
China has also pledged to attain peak carbon emissions by 2030 or earlier if possible. The country has set a daunting target of boosting the share of non-fossil fuels to 20% of its energy mix by 2030.
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. Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today. Find out What is happening in the stock market today on zacks.com.
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JINKOSOLAR HLDG (JKS): Free Stock Analysis Report
JA SOLAR HOLDGS (JASO): Free Stock Analysis Report
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