Understanding industry trends is vital for success in conventional or online stock trading. And it requires seeing beyond what’s immediately evident.
The solar industry did go through a volatile year globally in 2016. Fluctuations in the oil & gas market plus changing government policies could be blamed for this. However,analystsexpect solar energy to become the largest source of energy in the world by the middle of the century, so long-term prospects look good.
Rollercoaster Period for Solar Energy
In 2015 there was a surge in solar energy installations thanks to the investment tax credit for alternative energy stocks in the United States. But with the tax credit being extended into 2017, customers no longer felt the urgency to sign solar installation deals which then led to contracts being delayed. Asia was also experiencing a solar boom, but in 2016 began a tough period for the Chinese market that halted the boom. The industry was boosted in Europe by German solar tariffs in the early years of this century, but has in recent years been suffering as the result of a significant reduction in subsidies.
The industry has also had to endure the declining price of the solar panels back home. Industry leaders such as First Solar ($FSLR) bore the brunt of this trend and had to offset their losses through expensive restructurings for putting in place cheaper models. It was quite a tough time for First Solar and other solar energy companies, but this is a short term development. Analysts believe that in the long term, things are enviably favorable for the industry.
The Long Term Global Trend Supports Solar Energy
Though the industry has been affected by subsidy changes, it’s important to realize that the competitiveness of solar contracts for bids globally is on par with fossil fuel contracts. And solar energy isn’t as expensive as it once was, and its cost-competiveness is on par with traditional energy sources. The industry is therefore not as much in need of subsidies for manipulating the dynamics of supply and demand.
Countries such as Mexico, the UAE and Chileare among those that have preferred solar energy over fossil fuels. Mexico required more electricity capacity and opened an auction for various energy sourceswith solar providers winning 74% of the capacity available, and 24% being won by wind companies. Such auctions in solar energy welcoming nationssuch as the aforementioned Chile as well as other South American developing nations such as Brazil and Argentinacould lead to solar power plants being developed in the coming years. These contracts will result in a long-term demand for solar energy infrastructure.
Trump’s Views Differ from the World’s
Granted that the new American president Donald Trump is not a climate change fan, but it’s unlikely that he will discourage solar energy though he wants to revive the coal industry.And let’s not discount the universal sentiment towards clean energy. Countries all over the world have realized the adverse effects of pollution and are eyeing the expansion of their renewable energy capabilities. And though Trump may not believe in climate change, the world does and it’s a reality that just can’t be ignored. All that means solar energy will continue to be greeted with increased demand, and 2017 could be the year it all starts. It is no longer that untested novelty it once was.
For effective and informed online trading you need the right platform. TradeZero provides you with the advanced trading platforms for efficient online stock trading. Get in touch with us at +1 954-944-3885 or email firstname.lastname@example.org.
The content provided here is solely for informational and educational purposes and does not constitute an offer to sell or a solicitation to buy any security or instrument which may be referenced upon the site, or an offer to provide advisory or other services by TradeZero in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. Investors are advised not to rely on the information contained in this writing to make an informed investment or financial decision. TradeZero explicitly disclaims all liability for any action taken based on any information contained in this writing.