The production of clean energy, in particular the photovoltaic, remains at the forefront in the path towards decarbonisation, in view of the ambitious targets proposed by the EU for 2030 and 2050. A sector that shows rosy prospects also from a stock market point of view. According to him experts from abrdn Plca global investment company based in the United Kingdom, listed on the London Stock Exchange, photovoltaic energy is a growing sector, which is worth focusing on for interesting returns.
Why photovoltaic
Taking advantage of sunlight is convenient, also given the 89% drop recorded in solar panel prices from 2010 to today. Furthermore, it is an increasingly efficient system. In 2020, in the United States, photovoltaics generated more than that 90,000 GWh of electricity, a tenfold increase compared to 2010.
Countries such as China and India have embraced the cause of photovoltaic energy and, in fact, both of these countries boast some of the largest panel-based power plants in the world, including the Bhadla Solar Park (India) e The Tengger Desert Solar Park (China).
How to invest in solar energy?
“Numerous small and mid cap companies – underlines Kirsty Desson, Investment Director in the small cap segment of abrdn – represent an excellent vehicle for accessing the success story of photovoltaics”.
“Many SMEs offer leading solutions in niche segments and rapidly growing market. – explains the expert – They are often more agile than companies that operate in the same sector but are larger able to exploit new opportunities. Furthermore, many companies constitute a vital link in the supply chains and systems of the photovoltaic sector, contributing to the success of the corporate strategies of the large giants”.
Which companies should you focus on?
Desson cites the example of society Taiwanese Sinbon. “This company – he explains – specializes in the production of electronic components and in the provision of integrated solutions for various sectors, including renewable energy. Sinbon has contributed significantly to the development of the photovoltaic sector, thanks to high quality junction boxes, connectors and cables for solar systems. These components allow photovoltaic installations to operate at a very high level, ensuring the safe and efficient transmission of the electricity produced.”
Another company that deserves to be mentioned is the American NEXTracker. “This company delivers monitoring software and technology to the main operators in the sector. Its systems – underlines Desson – allow you to improve efficiency and performance of photovoltaic systems, optimizing the capture of sunlight throughout the day and thus increasing energy production yields by up to 25%. This greater yield is essential to attract investment in the clean energy sector. Furthermore, NEXTracker's intelligent energy management platform, NX Horizon, allows you to improve the reliability of photovoltaic systems and reduce operating costs.”
There are also those who move criticisms to the photovoltaic sector, covering the intermittent nature of solar energy, which hinders its ability to completely replace fossil fuels. And this is exactly where companies like Voltronic Power, that it produces continuity groups (UPS or Uninterruptible Power Supply) which allow electricity to be supplied even during blackouts and are therefore widely used to provide emergency power to servers, cloud devices and large industrial production plants, which cannot stop.
What to expect
To abrdn the future of photovoltaic is very promising. Photovoltaic and wind energy are predicted to generate 36,000 TWh per year by 2050, over twenty times the current production.
Asia will play a very important role. It is estimated that by the middle of the century the Greater China will reach a 40% share of installed photovoltaic capacity globally, followed by Indian subcontinent with 17%.
Within this sector, numerous SMEs are at the forefront, through the development of new technologies or the supply of essential components for the operation of photovoltaic systems. However, not all companies are the same and therefore it will be necessary focus on the highest quality ones. Many have strong balance sheets, possess pricing power and dominate their respective fields, offering a competitive advantage over larger rivals.
