Solar energy has been a hot topic in the news recently, with the price of solar panels plummeting and the interest of investors growing. There are plenty of investment opportunities in solar energy that you may want to consider – from solar parks and power plants to smaller scale installations on homes and businesses. However, before you begin your solar energy stock investment journey, it’s important to know a little bit about the industry in China. Here’s what you need to know.
Current Solar Energy Prices In China
One of the main reasons why solar energy prices have dropped so much in recent years is because of China’s manufacturing prowess and large scale production. China now owns the manufacturing technology, allowing them to produce panels more cheaply than anyone else. This has caused a steep drop in solar energy prices in China, and it’s made the tech more attractive for cash-rich and tech-savvy buyers in other parts of the world.
The Growth Of Solar Energy In China
According to Statista, China is the world’s largest electricity consumer, using more energy than the rest of the world combined. China’s appetite for electricity will put further pressure on the country’s already strained power grid. To meet this demand, the government is rapidly expanding its solar energy capacity, which now totals nearly 300 GW, accounting for nearly 30% of the country’s total power capacity. This trend suggests that solar energy may soon become a vital part of China’s energy mix.
How To Invest In Solar Energy In China
Since solar energy prices have dropped so much in recent years, savvy investors have taken the opportunity to enter the market. Just like any other new emerging industry, solar energy in China is still relatively immature, so expect a few hiccups along the way. However, it’s a good idea to invest as soon as possible, as long as you know what you’re getting into. Here are some good ideas for stock investments in solar energy in China:
As the largest producer and arguably the most reputable company in the industry, China Sunergy (OTCQB: CSUN) offers a relatively safe, high-yield investment opportunity. Since the company is based in China and conducts almost all of its business there, it’s a bit easier to track the company and its developments. Furthermore, CSUN is one of the few pure play solar stocks deserving of your investment consideration. The company is the world’s largest producer of solar power equipment, with over 70% of the world’s solar photovoltaic (PV) cells coming from its factory in China. The stock has a market cap of around $11 billion and is currently trading at around $15.50 per share. This makes it a good mid-stage play for investors seeking high growth.
Another safe and high-yielding option is Hanwha Group (OTCBB: WHAN), a company that’s well-known in the solar energy industry for its power plants and large-scale solar facilities. Similar to CSUN, Hanwha Group is also a large producer of solar panels, with its plant in Qingdao producing over 100 GW of solar energy annually. The company has a market cap of around $12 billion and is currently trading at around $16 per share. This makes it a good long-term play for investors seeking stable dividend payments.
First Solar (FSLR) is one of the biggest names in the solar energy industry, with its stock price more than quadrupling in value since its IPO in 2010. The company makes solar-powered products, such as the panels themselves, along with silicon wafers and manufacturing equipment. First Solar is one of the most reputable companies in the industry and is extremely stable, with no significant financial or production hiccups to report. Investors looking for a safe play with high dividends should consider First Solar as an option.
What we’ve covered so far is just the tip of the iceberg when it comes to solar energy in China. The industry is still young and faces significant growth opportunities as the government continues its push for cleaner energy. Since solar energy costs have decreased significantly in China and the demand for power continues to grow, it’s an excellent time for investors to enter the market. Just remember to do your research and make sure you’re not getting involved with a company that’s over-reliant on any one product or sector.