Inexperienced vitality shares are taking a deep breath after the 2020 surge, however the future prospects for Biden, EU local weather safety pledges – Forbes – look good

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Top line

While clean technology stocks have fallen so far in 2021 – after seeing huge gains over the past year – the sector is leading the way on the pledges of some of the world's leading developed nations, including the US, EU and US a recovery China.

New photovoltaic cells in the production line in Russia. Photographer: Andrey Rudakov / Bloomberg

© 2020 Bloomberg Finance LP

Key factors

The iShares Global Clean Energy Exchange-Traded Fund, which holds around 30 stocks, is down 28% from its recent high January 7 through Tuesday (versus a 1.9% rise in the S&P 500 index) after it was up 142% in the past year.

Raymond James analyst Pavel Molchanov, after seeing massive gains over the past year, says it is “perfectly reasonable and indeed healthy” for the sector to pull back, adding that this recent decline is part of the sector rotation The broader stock market towards growth is value stocks.

Molchanov notes that investors need to be selective in the clean technology and energy space, citing that most stocks in this space trade near record valuation multiples – on average, current multiples are roughly double what they were a year ago .

At Solar, Molchanov is currently optimistic about module manufacturer Maxeon Solar Technologies. Housing systems provider Sunnova Energy International; and project developer ReneSola; During his time in the wind sector, he prefers the independent power producer NextEra Energy. and blade manufacturer TPI Composites.

Mark Strouse, an analyst at JP Morgan, in a recent report recommended green energy companies with “high margins and strong free cash flow,” including solar tracker maker Array Technologies; Solar system manufacturer Enphase Energy; Solar panel maker Solaredge and solar technology company Shoals Technologies.

Key background

The movement to expand green energy efforts in the US and Europe is accelerating. Hence, companies with clean technology and energy are likely to benefit from government and industry support for decarbonization in the long term. In mid-February, the US officially resumed the Paris Agreement on Climate Change – undoing President Trump's departure from the deal – according to which the US and nearly 200 other nations will try to keep the global temperature rise to no more than 2 degrees Celsius limit the advance level. industrial level by reducing greenhouse gas emissions. President Biden, who has made tackling climate change a key part of his administration's strategy, will host a climate summit with world leaders on April 22nd, where he is expected to announce new emissions reduction targets. Biden has also pledged to spend $ 2 trillion on fighting climate change, including investing in renewable energy projects and seeking to end all emissions from U.S. power plants by 2035. Molchanov from Raymond James notes that “many questions” remain unanswered. An even more “visible driver” for decarbonisation and the energy transition is the European climate law passed last December. “This is a legally binding commitment to zero carbon emissions across the EU by 2050 – the first such policy by a major global economy,” he added. “Equally important, this law obliges the EU to cut CO2 emissions by 55% by 2030 to ensure that implementation starts quickly. This not only requires a massive change in electricity generation, but also in the areas of transport, agriculture, trade and housing. All of this will generate trillions of dollars in market opportunities spanning all industries of the clean tech ecosystem over decades. “

Big number

571%. That's how much Enphase Energy's stock has risen over the past year – but since then, shares have fallen 28% from their recent highs of Jan. 7.


Along with other clean energy subsectors, Molchanov is also optimistic about industrial wood pellet maker Enviva Partners. Natural Gas Fuel Appliance Manufacturer Chart Industries; Lithium supplier Livent Corp .; Fuel cell manufacturer Bloom Energy; and Itron, a manufacturer of electricity, gas, water and thermal energy meters and related software.

Crucial quote

“[Regarding the Paris Agreement]For Biden, he has to balance millions of fossil fuel-dependent jobs with promises for a clean energy campaign. At the same time, there is still great uncertainty as to whether the Paris Agreement will become the “de facto” climate agreement or whether it is going in the right direction [the failed] Kyoto [Protocols]. These positions will influence how big investors, especially institutional investors, approach clean energy after the US rejoins the Paris Agreement, ”said Abishur Prakash, geopolitical futurist at the Center for Innovating the Future, a consulting firm based in Toronto.

further reading

It's Official: In 2020 Renewable Energies Beat Fossil Fuels Across Europe (Forbes)

Record amount of clean energy being installed while costs keep falling (Forbes)


Resumption of the 400 kWP C&I solar battery storage challenge in Mozambique – building evaluate

NREL publishes on-line device to speed up solar approval