Big Solar Projects Are Driving Solar Stocks

Winning big supply contracts has become a key to generating profits in solar manufacturing, and it's been a busy week for project builders.

Jan 8, 2014 at 3:05PM

For today's solar manufacturers, it's just as important to have strong downstream demand as it is to have low-cost manufacturing. That's why a number of deals signed in the past week are such a strong sign from solar companies hoping to see operations continue to improve in 2014.

Especially in China, where losses have been mounting and facilities have been running below capacity, it's important to win large-scale projects. Here are some of the biggest deals signed by solar companies just in the past few days.

  • ReneSola (NYSE:SOL) signed a contract to supply 420 MW, or about a quarter's worth of shipments, with a project developer in Japan. This has been a high-margin market for solar manufacturers recently, so it could help both sales and margins over the next two years, when shipments are scheduled.  
  • Yesterday, Canadian Solar (NASDAQ:CSIQ) signed a supply agreement for four projects in North Carolina totaling 25.3 MW. It also completed a 30 MW project in Western China that was developed by its subsidiary CSI Solar Power. 
  • Yingli Green Energy (NYSE:YGE) signed an agreement to form a joint ventur with Shuozhou Coal Power to develop solar projects in China. The companies have already worked together to build 20 MW of utility scale projects.  
  • Hanwha SolarOne (NASDAQ:HQCL) signed a memorandum of understanding to supply OneRoof Energy with 50 MW of modules and work together to identify ways to more efficiently install residential solar systems in the future. It will also supply 11.5 MW to Ikaros Solar for projects in the United Kingdom.

Big supply contracts are becoming the norm in the solar industry, and these are just a few examples of how manufacturers are taking advantage. It's also projected that the first half of this year will be strong for solar installers, so locking up contracts early will ensure they're not left searching for demand.

Most importantly, this should lead to better financials. We've seen module sale prices tick higher in the last three quarters, and ReneSola is expecting an increase again in Q1 of 2014 to $0.68 per watt. That's from a low of $0.61 per watt a year ago, so if manufacturers can increase utilization and increase their sale price per watt, there is tremendous operational upside.

Foolish bottom line
Canadian Solar has already turned improving demand for projects into a profitable quarter, and ReneSola, Yingli Green Energy, and Hanwha SolarOne will need to as well to continue moving higher. 2014 will be a turning point for solar manufacturers, and winning projects like these is one key piece to winning long term.

Another great energy stock for 2014
The solar industry is upending electricity around the world, but there's one company that's upending the world's largest oil cartel. And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable LANDSLIDE of profits!

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers