Emergency in US: Solar Energy Attracts Attention Again
Due to global circumstances, the topic of renewable energy has taken a backseat. The sector can still offer investment ideas, especially since the United States has declared a state of emergency over the country due to power supply problems.
Why the US declared a state of emergency
In early June, Joe Biden declared a state of emergency in the country due to a lack of power generation equipment. After that, the import tax on solar modules from Asia was canceled for two years.
The president stated that the state of war in Ukraine together with unusual weather conditions had a negative impact on the energy market. Grid operators and utilities are advised to build new production facilities that will meet the expected electricity demand.
Solar power as an alternative
According to Joe Biden, solar energy is the most promising source of electricity in the US; Therefore, we should expect an increase in the demand for solar panels in the country.
In such circumstances, the consumer must decide whether to live with current electricity shortages and occasional power outages, or seek alternative energy sources.
Among these sources are gas and diesel generators, but the constantly high price of fuel makes this option less attractive while increasing the attractiveness of solar panels.
In such a situation, companies from the US solar market should be looked at as these companies can easily be the beneficiary of what is happening. The top three companies listed on US stock exchanges are Enphase Energy Inc., SolarEdge Technologies Inc. and First Solar Inc.
Enphase Energy
Enphase Energy Inc. is an American company that manufactures micro-inverters and energy storage systems and supplies software for managing solar systems. Its capitalization is USD 28 billion.
The microinverter converts the DC power generated by the solar panels into AC power which is sent to energy storage devices or the power grid. The micro-inverter supplies the panels directly, while the mono-inverter is intended for the entire solar station.
The micro-inverter solar array can operate independently, avoiding the overall loss of energy generated when the panels get dirty or dark. In addition, the micro-inverter is safer to maintain: the energy storage uses a voltage of 24 V, which is harmless to humans.
Enphase Energy works with homes and businesses that manufacture solar panels. As more and more solar panels are purchased, the demand for microinverters, energy storage for their installation and grid connection, and the software required to maintain solar power plants increases.
Enphase Energy Inc. stock. (NASDAQ:ENPH) is down 30% from its all-time high. The next resistance level is at USD 220 while the support level is at USD 190.
SolarEdge Technology
SolarEdge Technologies Inc. is an Israeli company with operations in the United States, Germany, Italy, Japan and Israel. It produces power optimizers, solar inverters, and software for monitoring solar panel systems and energy storage.
Unlike Enphase Energy, SolarEdge Technologies installs a power optimizer instead of a micro-inverter in each solar panel. The optimizer follows the work of the panel, optimizes the voltage and sends it to the central inverter. Note that the power optimizer is built into the Enphase Energy microinverter, but the Problem Energy Technologies solution is more economical.
However, the optimizer from the Israeli company is only compatible with the central inverter from SolarEdge Technologies. This is great for the company as the buyer will have to return it for the accessories. However, it is questionable whether consumers will be happy with this.