A Tale of 2 Hot Solar Stocks
Allied Market Research projects the global solar market to grow more than 20% annually through 2026. But that promise has not been reflected in most solar stocks, many of which are down even on a 10-year basis. Competition and commodification have crimped margins and profits for many panel producers despite a growing market. Two rare, outperforming solar stocks bucking this trend are SolarEdge (NASDAQ: SEDG) and Enphase Energy (NASDAQ: ENPH), whose stories shed light on their success and forecast a brighter future.
Energy, regardless of its source, is a commodity. Enduring businesses go beyond supplying commodities; they solve problems.And both Enphase and SolarEdge have their roots in solving problems for the solar industry.
One major friction point in a solar energy setup is solving for the AC/DC issue. Solar panels only put out DC electrical current, but most modern homes, appliances, and the grid itself, operate on AC current. In 2000, Sandia Laboratories invented solar inverters to solve this problem, but created a new one in the process: efficiency. The inverters, connected to many panels, were only as efficient as the slowest panel in the chain.
Source Fool.com
