The solar industry has recovered at a much faster rate compared to tech companies that resurfaced following the dotcom bubble burst in early 2000.
According to the BI Global Large Solar Energy Index, the 15 companies that registered a decline of 87% from the period February 2011 to November 2012 had recovered more than 55% of their value.
The Worst is over
Many of the manufacturers have not just recovered but are now profiting, the prime example being SunPower Corporation based in California, which has seen its profit grow five-fold. As the demand for solar panels and solar power plant installation grows, so too will the companies’ profit. Compared to a 6.1% growth the year before, the demand for solar power roof installations is expected to grow by 40% this year. Jenny Chase, an analyst at Bloomberg New Energy Finance, says that the “worst is probably over” and investors seem to agree as money is being invested in the industry.
Investments from Solar Power Pouring In
Solar companies have become the favorite of investors as they have put in more than $US205 billion ($195 billion) in solar related projects. Since analysts are predicting that recovery will continue throughout 2014, expect more money and investments to come into the industry.
The optimism surrounding the industry can be seen in the rapid increase of share prices of these companies. The share price for SunPower for instance, is now at 3.5 up from 2.4 late last year, and it is also the highest it’s been in two years. JinkoSolar Holding Co., a solar manufacturer based in China, has seen its shares triple in price this year alone. Canadian Solar Inc., which incurred a $US195 million loss in 2012, has increased its value by sevenfold. Given all these facts, it comes as no surprise that solar panel quotes demand is on the rise now.