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CapitalGainsReport Solar Sector Spotlight (SING, FSLR, ARRY, SHLS)

Solar photovoltaic (PV) technology is on the cusp of eclipsing coal in installed capacity and is set to claim the title of the world's largest power source by 2027. Cumulative solar PV capacity is poised to nearly triple, outpacing natural gas and coal. Despite current higher investment costs, utility-scale solar PV emerges as the most cost-effective choice for new electricity generation across numerous nations. 

In 2022, solar PV generation surged by an impressive 26%, reaching a remarkable 1,300 TWh. This growth rate aligns with forecasts for the next decade, hinting at continuous expansion in the years ahead. Solar technology's economic appeal, combined with a robust supply chain and strengthened policy support in critical regions such as China, the United States, the European Union, and India, should fuel the engine for long-term capacity growth.

Furthermore, advocates for clean energy assert that the Inflation Reduction Act has already sparked the creation of 403,000 jobs through major energy projects. With a staggering $86 billion in announced investments, the solar energy sector plays a pivotal role in job generation, notably within the electric vehicles, battery storage, and solar energy segments.

Now, let's dive into four distinctive stocks in the solar sector, each harboring unique potential.

Amidst the bustling world of solar penny stocks, SinglePoint Inc. (OTCQB: SING) has emerged as an intriguing under-the-radar contender. SinglePoint Inc. specializes in solar installation, brokerage, and digital marketing services, with a focus on lead generation in the solar energy industry. Additionally, they offer solar solutions, battery backups, and electric vehicle chargers to residential and commercial clients. Positioned strategically in sectors benefiting from substantial federal investments, SinglePoint might hold the potential for significant growth.

SinglePoint follows an agile business strategy that involves acquiring top solar installers in various markets and integrating these offerings into its portfolio. This strategic move has led to a substantial increase in installed solar capacity, surging to about 2,588 kilowatts by Q4 2022 from just 1,330 kilowatts two quarters earlier.

One of the main forces behind SinglePoint's core business is its flagship company, Boston Solar, the top installer of solar panels in Massachusetts. In the last year alone, Boston Solar has witnessed remarkable expansion, growing from $17 million in revenue to nearly $25 million. This surge in revenue highlights the surging demand for solar installations, aligning perfectly with the U.S. solar industry's growth.

Adding to SING’s strengths, SinglePoint's subsidiary, Frontline Power Solutions (FPS), operates as a licensed energy services company (ESCO) in fifteen states. FPS recently secured an exclusive energy advisory agreement and a substantial 7.1 million kilowatt-hours (kWh) energy services contract with a national property management firm. This strategic move is expected to generate approximately $110,000 in cost savings for the client over the term of the contract, reinforcing FPS's position as a valuable ally for clients aiming to optimize energy savings.

Something that separates SING from other competitors is their diversification. SinglePoint isn't solely focused on solar energy; they are actively exploring future growth opportunities in renewable energy, energy as a subscription, and other energy-efficient technologies and products, showcasing their commitment to sustainability and a healthier life. Moreover, SinglePoint has set its sights on becoming a key player in the air purification market.

SinglePoint recently announced that they had acquired the remaining 49% interest in Box Pure Air LLC, a distributor of industrial-grade air purification products. This acquisition positions SinglePoint to capitalize on the over $121 billion federally allocated to enhance indoor air quality in the nation's schools. Box Pure Air is dedicated to providing commercial-grade products and solutions designed to improve indoor air quality in schools.

In a recent surge, SING's value rose significantly from the mid-60 cent range to a high of 1.45. While SING has since retraced to right below $0.80.

First Solar Inc. (NASDAQ: FSLR) is a prominent American solar technology company making waves on the global stage as a provider of eco-efficient solar modules committed to combating climate change. Their advanced thin-film photovoltaic (PV) modules, developed through cutting-edge research in California and Ohio, represent the future of solar technology. These modules offer a competitive, high-performance, and environmentally responsible alternative to conventional crystalline silicon PV panels.

But First Solar's commitment to sustainability extends beyond its product line. It's embedded in every facet of the company's operations, from responsible raw material sourcing to innovative manufacturing techniques and even end-of-life module recycling. This comprehensive approach underscores First Solar's dedication to sustainability, emphasizing responsibility toward both people and the planet.

In a recent financial highlight, First Solar's Q3 earnings call showcased a remarkable performance. The company transitioned from a year-ago loss to a third-quarter profit, thanks in large part to robust demand for renewable energy. This expansion was bolstered further by a 3.6% increase in the company's stock price during after-hours trading, indicating strong investor confidence.

One noteworthy development is the adjustment in their full-year profit forecast, raising the lower end to $7.20 to $8.00 per share. This upward revision, shifting the mid-point outlook from $7.50 to $7.60, underlines their significant confidence in sustained growth.

The Biden administration's 2022 Inflation Reduction Act, allocating substantial funds to combat climate change and promote clean energy, provides a tax credit for domestically manufactured panels. This initiative benefits companies like First Solar and aligns with the broader trend of increased investment in renewable energy.

Importantly, First Solar plays a pivotal role in the surging U.S. solar industry, which anticipates adding a record 32 gigawatts (GW) of production capacity this year, reflecting a remarkable 53% increase from 2022. Their year-to-date bookings have surged to 27.8 gigawatts, underscoring their strong market presence.

Solar project developers in the United States prefer First Solar's cadmium telluride products, primarily because this technology doesn't rely on polysilicon, a raw material predominantly manufactured in China and commonly used in the production of solar panels.

As a testament to their ongoing expansion, First Solar announced an agreement to supply Swift Current Energy with 500 megawatts of advanced Series 7 thin film modules. Swift Current Energy, a prominent clean energy asset developer based in Boston, has previously ordered 3.3 gigawatts of First Solar modules in 2022. This latest order, booked prior to the release of First Solar's Q3 2023 results, is set to see modules delivered between 2027 and 2028.

Array Technologies Inc. (NASDAQ: ARRY), a leading global renewable energy company, has carved a niche for itself by providing utility-scale solar tracking technology. What sets Array apart is its unwavering commitment to engineering solar trackers that can withstand the harshest conditions on our planet.

Array's high-quality solar trackers, coupled with sophisticated software, play a pivotal role in maximizing energy production. By meticulously adjusting the orientation of solar panels to follow the sun, these trackers ensure the highest levels of efficiency and output. This unique approach accelerates the adoption of cost-effective and sustainable energy, ultimately leading the way to a brighter and smarter future for clean energy.

Founded and headquartered in the United States, Array Technologies relies on a diversified global supply chain and a deeply ingrained customer-centric approach. This strategy allows them to not only deliver but also commission and support solar energy developments across the globe. Their innovative solutions are lighting the path towards a future where clean energy becomes the norm.

While ARRY has faced a decline in stock performance in 2023, it's crucial to explore the unique elements that make it a compelling investment. One standout factor is the price-to-earnings (P/E) ratio, which is currently standing at around 33x earnings. However, the forward P/E ratio paints a more attractive picture, sitting at a more palatable 18x. This provides investors with an opportunity to delve into the company's financial performance.

A closer look at Array's financials reveals consistent year-over-year (YoY) growth in both revenue and earnings. This resilience in the face of market fluctuations showcases Array Technologies as a solar stock that's down but far from out. Their specialization in solar tracking solutions adds a layer of uniqueness to their approach, making them a noteworthy contender in the solar sector. 

Shoals Technologies Group, Inc. (NASDAQ: SHLS) has emerged as a trailblazer in the renewable energy industry. As a leading provider of electrical balance of systems (EBOS) solutions, Shoals is playing a pivotal role in driving the adoption of clean energy across solar, storage, and electric vehicle charging infrastructure.

Founded in 1996, Shoals has dedicated itself to introducing innovative technologies and system solutions that have a transformative impact on the industry. Their cutting-edge offerings are designed to substantially increase installation efficiency and safety while concurrently improving system performance and reliability. The results are solutions that not only align with the growing demand for renewable energy but also offer a sustainable approach to powering the future.

Shoals Technologies Group has gained widespread recognition in the renewable energy sector, with their solutions deployed on over 62 gigawatts (GW) of solar systems globally. This extensive reach showcases their impressive presence and influence in the industry.

A testament to Shoals' rapid growth and innovation is their recent partnership with the U.S. Department of the Air Force. The company is set to deploy its Fuel by Shoals eMobility solution, which supports an Electric Vehicle Charging-as-a-Service (EVCaaS) pilot project. Leidos, a Fortune 500 science and technology company, is leading this project to provide a modern, resilient, scalable, and secure power infrastructure to charge the Air Force's fleet of non-tactical vehicles across the continental United States.

Fuel by Shoals, an innovative above-ground EV charging infrastructure solution, was selected for its ability to minimize construction costs and schedule delays while meeting the unique efficiency and resiliency needs of each installation location. This solution, integrated with ChargePoint EV chargers, paves the way for the Air Force to transition its fleet of over 49,000 non-tactical vehicles to zero emissions, aligning with their Climate Action Plan.

While Shoals Technologies Group's stock performance has faced a 43% decline over the past three months, it's essential to consider their long-term potential. The company's consistent growth in revenue and earnings, along with its commitment to innovation and sustainability, positions it as a notable player in the solar sector. With the upcoming release of their third-quarter 2023 results, investors are keeping a close eye on SHLS.



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