According to a BloombergNEF research report, battery capacity in the US will rise to 4,800 MW by the end of 2020 and exceed 32,000 MW by 2025. That could provide electricity to nearly 26 million American homes. Overall, the solar battery market is expected to grow by leaps and bounds in the near future.
In 2018, the US Federal Energy Regulatory Commission passed a rule that allows battery operators in the US to sell electricity on the wholesale market. In addition, batteries installed alongside renewable energy will receive a US tax credit. This government policy has spurred investment in Solar Plus storage projects across the country.
What drives the market for solar batteries?
According to the ResearchAndMarkets.com report, the global solar battery market is expected to have a CAGR of 12.31% over the 2019-2024 period. Growth is expected to be driven by falling lithium-ion battery prices, the introduction of electric vehicles, increased sales of consumer electronics, increasing awareness of climate change and the constant shift to renewable energy.
Solar energy was a source of energy during the day. However, with the advancement in energy storage technology, it is no longer limited to hours of daylight. The US is one of the leading markets for solar energy and batteries. Power generators, energy suppliers and technology companies are investing heavily in building battery packs on an industrial scale in American solar parks.
These Solar Plus storage projects will help people use solar energy even after daylight. In fact, such projects have been on the rise after solar panel and lithium-ion battery prices have fallen nearly 77% and 87%, respectively, over the past 10 years, according to a research report by BloombergNEF and the Business Council for Sustainable Energy.
Additionally, the market is being driven by the biggies of the companies as efforts to reduce the carbon footprint have been at the center. Google parent company Alphabet and Berkshire Hathaway Energy's NV Energy are awaiting government approval to operate a new Nevada data center that will include 350 MW solar panels and nearly 280 MW batteries. In fact, this partnership between Google and NV Energy is one of the largest purchasing agreements for companies with Solar Plus storage.
The story goes on
5 stocks to see
Solar technology is now cheaper than coal, and some projects are giving gas-powered plants stiff competition. And it's not just the demand for batteries. The entire solar power system market will see dramatic advances over the next five years.
In fact, the global solar power system market is expected to reach US $ 185.5 billion by 2026, up from US $ 77 billion in 2017 at an annual growth rate of 11.58%. This market includes solar collectors, assembly, racking and tracking systems as well as storage systems.
In light of the positive developments in the solar industry, we have shortlisted five stocks that can provide investors with significant returns.
Clearway Energy, Inc. CWEN acquires, owns and operates contractually agreed renewable energy and conventional generation and thermal infrastructure assets in the United States. These include wind, solar and natural gas power plants. The company's expected earnings growth rate for the current year is 47.8% compared to Zacks Alternative Energy – the projected earnings growth of other industries of 13.7%.
The Zacks consensus estimate for the company's earnings this year has been revised upwards by 1.5% over the past 60 days. Clearway Energy has a Zacks Rank 2 (Buy). You can see The full list of today's Zacks # 1 Rank (Strong Buy) stocks can be found here.
First Solar, Inc. FSLR offers photovoltaic solar energy solutions. The company designs, manufactures and sells cadmium telluride solar modules that convert sunlight into electricity. The company's expected earnings growth rate for the current year is 80.2%, compared to the Zacks solar industry’s projected earnings growth of 24.2%.
The Zacks consensus estimate for the company's results for the current year has been revised upwards by 1.7% over the past 60 days. First Solar has a Zacks Rank 3 (Hold).
NextEra Energy Partners, LP NEP owns and manages contracted clean energy projects. The company's portfolio includes systems for generating renewable energy consisting of wind and solar projects. The company's expected earnings growth rate for the current quarter is more than 100% versus the 46% earnings decline projected by Zacks Alternative Energy – Other Industry.
The Zacks consensus estimate for the company's earnings this year has been revised up 1.5% over the past 90 days. NextEra Energy Partners has a Zacks Rank 3.
Azure Power Global Limited AZRE deals with the development, construction, ownership, operation, maintenance and management of solar power plants. The company's expected earnings growth rate for the next quarter is more than 100%.
The Zacks consensus estimate for the company's earnings for the current year has been revised up 4.8% over the past 90 days. Azure Power Global Limited has a Zacks Rank 3.
Sunworks, Inc. SUNW offers photovoltaic-based power supply systems for the agricultural, commercial, industrial, public and residential markets. The company's expected earnings growth rate for the current year is 52% versus the forecast earnings growth of the Zacks solar industry of 24.2%.
The Zacks consensus estimate for the company's earnings this year has been revised up 2.1% over the past 90 days. Sunworks has a Zacks rank of 3.
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