Analyst selects three stocks to play California's new solar panel mandate
May 14, 2018 3:19 PM ETSunrun Inc. (RUN)RUN, SPWR, FSLR, PCG, EIX, SRE, TAN, KWT-OLDBy: Carl Surran, SA News Editor52 Comments
- California’s new solar mandate will benefit panel installers and manufacturers while increasing volatility in the state’s power market, says Height Capital analyst Katie Bays, pointing investors to ways to play the new law.
- The huge knee-jerk reactions in solar stocks such as Sunrun (RUN +1.8%) may be misdirected, Bays believes, saying manufacturers such as SunPower (SPWR +1.6%) and First Solar (FSLR +1.6%) will be the biggest winners in the long term and could sell to homebuilders directly.
- “As with the city of Lancaster, outside of Los Angeles, homebuilders like KB Home who were required to add rooftop solar to new properties chose to contract directly with a manufacturer to supply solar panels for housing developments," Bays writes.
- In terms of potential negative market impact on electric companies, Bays says PG&E (PCG -0.5%) is more insulated than Edison International (EIX -0.1%) or Sempra Energy (SRE -0.7%), since PG&E's territory includes less new home construction.
- ETFs: TAN, KWT