Sunny side up
2019 could be a lot better and a step in a different direction for the solar energy sector as a whole. Solar stocks have already performed well so far. Last year was particularly dull for the space, largely due to weak revenue growth, driven by falling demand and policy uncertainties. The leading solar energy solutions provider, First Solar’s (FSLR), stock is up ~30% so far this year, mirroring broader solar stocks (TAN). But will First Solar stock continue its upward march?
Why 2019 could be different
First Solar’s revenues fell 24% while its EBITDA almost halved in 2018 compared to 2017. Earnings for the full year of 2018 came in at $1.36 per share against a loss of $1.59 per share in 2017. Despite lower-than-expected fourth-quarter numbers, First Solar kept its guidance intact for 2019. One of the largest utility-scale solar players, First Solar’s, innovative and efficient Series 6 PV module could help its performance in 2019. Wall Street analysts expect strong revenues and earnings growth, driven by an increase in demand in FSLR this year.
According to Reuters, Goldman Sachs expects utility-scale solar power capacity to grow 12% in 2019 and 10% in 2020 globally, driven by supporting policies and lower costs of solar panels. Energy consulting company Wood Mackenzie also anticipates new solar installations in the United States to grow 14% this year compared to last year.
Solar panel installations fell last year due to heavy tariffs on imported panels. Wood Mackenzie’s estimate of 12.1 gigawatts of solar panel installations for 2019 is higher than its previous forecast of 11.5 from the fourth quarter of 2018, according to Reuters.