What happened 

Shares of solar panel manufacturer JinkoSolar (JKS -1.97%) rose by 175.1% in 2020, according to data provided by S&P Global Market Intelligence, as companies across the solar energy sector made sharp gains. 

Solar farm in a field with a setting sun in the background.

Image source: Getty Images.

So what 

After years of being out of favor with investors, solar energy stocks soared in 2020 despite relatively modest improvements in financial performance. JinkoSolar's revenue rose in 2020, but its net income was down as the pandemic impeded solar projects and manufacturing. 

JKS Revenue (TTM) Chart

JKS Revenue (TTM) data by YCharts

The good news is that the future looks brighter. The incoming Biden administration and a Democrat-controlled Congress will likely treat renewable energy more favorably than their predecessors did, and we've already seen a two-year extension of the solar investment tax credit at 26% in the recent stimulus bill. 

The ultra-low interest rate environment that the Federal Reserve has created to stimulate the economy amid this crisis will also be a boon for the solar sector, allowing project developers to borrow money cheaply. These factors are expected to result in an increase in the number of new solar installations. That should be good news for panel manufacturers like JinkoSolar. 

Now what 

JinkoSolar's margins have been consistently improving over the last few years as the solar industry has modularized itself. Among the results of that business-model shift have been lower overall costs and in some cases rising prices for higher-efficiency solar panels. Those trends won't likely change if demand for solar panels goes up, so JinkoSolar stock could have a great 2021 as well.