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Europe's Solar Deployment to Double in 2026: 3 Stocks to Watch
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Per the report from Solar Power Europe, the European solar market registered solid growth of 47% in new solar PV capacity connected to grids in 2022 compared to 2021. Moreover, last year, solar installation from 26 out of 27 European Union Member States surpassed the same from 2021, as stated in the report. Going forward, solar deployment in Europe is likely to exceed the 50-gigawatt (GW) mark in 2023. The growth is likely to double-fold to 85 GW in 2026.
Such an encouraging forecast brings the spotlight on prominent solar stocks like Enphase Energy (ENPH - Free Report) , Emeren (SOL - Free Report) and SolarEdge Technologies (SEDG - Free Report) , which boast a recognized position in the European solar market.
Factors Shaping the Growth Trend
In 2022, in its REPowerEU Plan, the European Commission outlined its strategy to reduce the European Union’s reliance on Russian fossil fuels. As part of this strategy, the nation aims to install nearly 320 GW of new solar photovoltaic by 2025 and add almost 600 GW by 2030. Such an ambitious target implies an expected rapid acceleration in rolling out solar projects in Europe.
High energy prices in the nation, coupled with reducing fossil fuel subsidies in some states, are likely to drive the implementation of solar projects in the region. This highlights the significant demand for solar products and components.
Some EU states are fostering the adoption of solar energy by providing installation incentives. Most recently, Greece’s Ministry of Environment and Energy launched a subsidy program of $215.3 million for residential solar and battery storage systems.
Europe is also contemplating the easing of state aid rules coupled with a new European sovereignty fund aimed to encourage Member States to offer tax incentives for the green industry. Such subsidies and incentives should encourage the adoption and installation of solar energy projects, thereby setting the stage for solar companies to expand their footprint across Europe.
Stocks to Consider
In light of the aforementioned factors, solar stocks investors should keep on their watchlist are as follows:
Enphase Energy: Europe has proved to be a lucrative market for Enphase. Enphase established a partnership with Flex Romania in the first quarter of 2023 to increase its manufacturing base in Europe.
In April 2023, Enphase Energy started shipping its IQ Batteries to customers in France, the Netherlands and Switzerland, thereby expanding its product availability in the European market. The company thus expects the European solar market to remain favorable for its business prospects.
Emeren Group: The company generated 73% of its revenues from the European region in the first quarter of 2023. As of Mar 31, 2023, Emeren had mid-to-late-stage projects of 2,272 MW in Europe and operated 60 MW of IPP projects in Europe.
Emeren aims at increasing its mid-to-late-stage pipeline to 4 GW by the end of 2023, with a significant portion of the growth coming from Europe. In June 2023, Emeren entered into a partnership with Matrix Renewables to build a portfolio of Battery Energy Storage Systems, with a generation capacity of up to 1.5 GW, in Italy. This should strengthen SOL’s position in the European solar market.
The company currently carries a Zacks Rank of #3. Its 2023 estimated sales suggest growth of 96.9% from the prior-year reported figure.
SolarEdge Technologies: The company enjoys strong demand for its products in Europe, which resulted in a revenue increase of 9% in the last reported quarter. In 2022, SEDG launched the 5-kilowatt three-phase Home Battery for the European market.
To capitalize on the growing demand, the company intends to make available its Commercial Storage System and Electric Vehicle charger for European customers by the second half of 2024. SolarEdge is currently Zacks #3 Ranked and boasts a long-term earnings growth rate of 33.1%.
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Europe's Solar Deployment to Double in 2026: 3 Stocks to Watch
Per the report from Solar Power Europe, the European solar market registered solid growth of 47% in new solar PV capacity connected to grids in 2022 compared to 2021. Moreover, last year, solar installation from 26 out of 27 European Union Member States surpassed the same from 2021, as stated in the report. Going forward, solar deployment in Europe is likely to exceed the 50-gigawatt (GW) mark in 2023. The growth is likely to double-fold to 85 GW in 2026.
Such an encouraging forecast brings the spotlight on prominent solar stocks like Enphase Energy (ENPH - Free Report) , Emeren (SOL - Free Report) and SolarEdge Technologies (SEDG - Free Report) , which boast a recognized position in the European solar market.
Factors Shaping the Growth Trend
In 2022, in its REPowerEU Plan, the European Commission outlined its strategy to reduce the European Union’s reliance on Russian fossil fuels. As part of this strategy, the nation aims to install nearly 320 GW of new solar photovoltaic by 2025 and add almost 600 GW by 2030. Such an ambitious target implies an expected rapid acceleration in rolling out solar projects in Europe.
High energy prices in the nation, coupled with reducing fossil fuel subsidies in some states, are likely to drive the implementation of solar projects in the region. This highlights the significant demand for solar products and components.
Some EU states are fostering the adoption of solar energy by providing installation incentives. Most recently, Greece’s Ministry of Environment and Energy launched a subsidy program of $215.3 million for residential solar and battery storage systems.
Europe is also contemplating the easing of state aid rules coupled with a new European sovereignty fund aimed to encourage Member States to offer tax incentives for the green industry. Such subsidies and incentives should encourage the adoption and installation of solar energy projects, thereby setting the stage for solar companies to expand their footprint across Europe.
Stocks to Consider
In light of the aforementioned factors, solar stocks investors should keep on their watchlist are as follows:
Enphase Energy: Europe has proved to be a lucrative market for Enphase. Enphase established a partnership with Flex Romania in the first quarter of 2023 to increase its manufacturing base in Europe.
In April 2023, Enphase Energy started shipping its IQ Batteries to customers in France, the Netherlands and Switzerland, thereby expanding its product availability in the European market. The company thus expects the European solar market to remain favorable for its business prospects.
ENPH currently carries a Zacks Rank #3 (Hold) and has a long-term earnings growth rate of 24.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Emeren Group: The company generated 73% of its revenues from the European region in the first quarter of 2023. As of Mar 31, 2023, Emeren had mid-to-late-stage projects of 2,272 MW in Europe and operated 60 MW of IPP projects in Europe.
Emeren aims at increasing its mid-to-late-stage pipeline to 4 GW by the end of 2023, with a significant portion of the growth coming from Europe. In June 2023, Emeren entered into a partnership with Matrix Renewables to build a portfolio of Battery Energy Storage Systems, with a generation capacity of up to 1.5 GW, in Italy. This should strengthen SOL’s position in the European solar market.
The company currently carries a Zacks Rank of #3. Its 2023 estimated sales suggest growth of 96.9% from the prior-year reported figure.
SolarEdge Technologies: The company enjoys strong demand for its products in Europe, which resulted in a revenue increase of 9% in the last reported quarter. In 2022, SEDG launched the 5-kilowatt three-phase Home Battery for the European market.
To capitalize on the growing demand, the company intends to make available its Commercial Storage System and Electric Vehicle charger for European customers by the second half of 2024. SolarEdge is currently Zacks #3 Ranked and boasts a long-term earnings growth rate of 33.1%.