The Invesco Solar ETF (TAN) increased 6.4%, while the S&P 500 increased by 2.0% and the DJIA increased by 2.5% in the month of March. The top five performing solar stocks in the US market include Sunnova Energy International, Inc. (22.6%), Sunworks, Inc. (21.4%), Azure Power Global Limited (19.3%), Array Technologies, Inc. (16.9%), and SunPower Corporation (14.5%).
TAN surged in March, largely due to the disruption to global energy markets caused by Russia’s invasion of Ukraine. EU governments are working to increase renewable energy targets with support mounting for “Freedom Energy,” a new moniker for PV in Germany.
During the first week of March, our checks suggest U.S. Free on Board (FOB) module pricing for the utility-scale segment is $0.34 to $0.36 now through YE 2023. After accounting for freight, this results in a price around $0.40/W. This compares to what First Solar, Inc. (FSLR) said its Q4 2021 earnings call that management sees $0.27/W in 2022 and in 2023, including $0.025/W of freight at a minimum, suggesting the implied apple-to-apple FOB pricing of $0.24/W. If FSLR were willing to renegotiate some contracts, this would suggest that the company could have substantially more upside. What’s interesting is that customers may be renegotiating PPAs while capitalizing on the lower FSLR pricing.
Solar Energy Industries Association (SEIA) hosted a webinar with U.S. Customs and Border Protection (CBP), which we understand highlighted that there may be a process for a module vendor to get preapproved ahead of shipping panels. Our checks suggest a lot more work is needed before this happens. Moreover, we believe that two of the three companies who were detained and released – JKS, Longi, and Trina – were recently detained again after sending in new, trial containers. We don’t yet know volumes nor what to expect, but this is yet another step toward more free -flowing modules.
By Jesse Pichel
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