The Solar Industry’s Time to Shine
Solar Stocks Climb
A number of stocks in the solar power industry have hit all-time highs in recent weeks. There have also been a number of recent IPOs in the sector and many investors seem hopeful that more solar-related companies will make their public debuts soon. This boom is happening for a variety of reasons.
In both Europe and the US, governments are eager to invest in building green electric grids and transitioning to clean energy systems. Additionally, sustainability-focused indexes are becoming increasingly popular with investors. Also the cost of solar energy has fallen sharply in recent years, which makes it more attractive to consumers than some other, more expensive clean energy solutions.
Deals in the Solar Sector
Investors are piling into a variety of companies within the solar industry. For example, Tennessee-based solar power components maker Shoals Technologies Group (SHLS) had a successful IPO in late January.
Meanwhile Sunlight Financial LLC, a company which lends money to homeowners to install rooftop solar panels, is making plans to go public through a merger with a SPAC backed by Apollo Global Management. Solar lending has surged in recent months. Sunlight has originated over $3.5 billion in loans.
Zooming Out
There have been spikes in the popularity of solar investments before. Several companies in the space went public in 2014 and 2015. But SunEdison Inc, which used to be the world’s largest renewables company, went bankrupt in 2016. Following these events, investors were wary of the sector, and no solar companies made public debuts between late 2016 and early 2019.
Some investors say that if solar companies prioritize growth over profitability now, they could suffer a similar rise and fall. However, others argue that market conditions are different than they were in 2016, and solar-focused companies will continue to shine.
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