A new brief released by the U.S. Department of Energy outlined plans to achieve President Joe Biden's goal for a carbon pollution-free power generation sector by 2035, and Array Technologies (NASDAQ:ARRY) is one company that could greatly benefit. That helped the company's stock jump Wednesday, with shares trading up 10% as of 3:30 p.m. EDT.
The DOE brief said that with growth of 4,000%, solar has been the fastest growing renewable energy source in the nation over the last decade, but the pace of growth has to accelerate. The report said that "to reach a largely decarbonized electricity sector by 2035, solar deployment would need to accelerate to three to four times faster than its current rate by 2030."
Achieving this goal could help solar generation become 40% of power generation by 2035, up significantly from 3% today. As a manufacturer of ground-mounting systems used in large solar energy projects, investors today realize Array is in a sweet spot to benefit from that scenario.
The DOE said that investments in the renewable energy sector have helped solar costs drop between 70% and 80% since 2010. Array has been a beneficiary of growth in the sector, but after expenses jumped due to increasing steel and supply chain costs, investors bailed on the stock earlier this year.
The company has since entered into supply agreements that it says fix about 85% of its input costs, including nearly all steel requirements, for the balance of 2021. With a better handle on costs, Array can better gauge the profitability of the projects it bids on. That allowed it to resume providing full-year 2021 guidance to investors in its recent second-quarter financial report. Investors who see more of a long-term tailwind with the DOE report today are giving shares a boost.