Cost has emerged as the key differentiating factor among solar energy manufacturers, as the technologies do not vary drastically from one manufacturer to the other and subsidies are declining in leading European markets, says Angelo Zino, Analyst at Standard & Poor’s.
“You don’t really see much differentiation in the industry when it comes to product type,” Zino said. “We think low cost is going to set these players apart, and it’s really not going to be based necessarily on the more advanced technologies that are out there in our opinion.”
Zino points to First Solar (FSLR) as one of his top “buy”-rated stocks in the solar energy space. He says the thin-film producer has a strong pipeline and funding from the Department of Energy for the next couple years, and the company has recently won projects and has high exposure to the U.S. market.
“[FSLR] has a larger scale and much better balance sheet versus other so they can help meet financing needs. Not to mention, all said, they’re the low-cost industry producer, benefiting from the first-mover advantage, so it’s a lot of factors that we see favorably,” Zino said.
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