Renewable solar energy has produced some of the world’s most powerful companies. Many of them are now listed on the stock exchange as they managed to grow into considerable forces in the energy sector. There are many growing solar energy companies around the world and they all seem to be doing better and better when it comes to sales and profit.
What drives solar energy companies to grow?
There are a few elements which can drive growth for the solar energy companies. Although the industry is still volatile, many of the big players can offer a steadier investment and this is based on a few characteristics which are hard to match in any other industries.
One of the characteristics comes with the growth in the industry which is unlike any other alternative. Growing at an impressive rate and with a steady pace, the solar energy industry can provide the backbone for these businesses to thrive. Interestingly, not all companies are doing a great job with profits, but this may be down to the second characteristic which drives growth.
The second characteristic represents government subsidies. Practically, the companies can get help from the state to invest, to hire people, to buy inventory or simply to grow. This is one of the main areas which has made these companies grow larger and larger. The reasons for the financial backing are diverse and include the low impact on the environment as well as the finite energy alternatives such as fuel.
Solar energy companies
Establishing a list of the big players in the industry is not as easy as it might seem at the beginning. This is due to the fact that many of these companies are actually state-operated. They can also hold a large share of the market which makes them practically in a league of their own. However, there are many companies which have the sole objective of harvesting solar energy or for which this is at least the main object of activity.
ABB Ltd
ABB plays an important role in the energy sector. The giant operates with alternative energy but also works closely with robotics and automatization. Their activity stretches into different areas which include transportation and utilities. Their industrial impact is considerable as they operate in around 100 countries. Their market capital is estimated to be close to 50 billion USD.
Fine Solar Inc.
Fine Soar manufactures the components for the solar energy. Even more, they are capable of developing entire projects for at any scale for any type of customer. Of course, this means they also have to offer the services which come with such complex operations and this is why the company provides complete solutions for all types of needs. In terms of investment, the company offers a stable approach for any investors who actually believe in the power of alternative energy. The financial situation is not bad either as the company has a market capital of over 5 billion USD.
Atlantica Yield PLC
Atlantica is another important player in the alternative energy market. Their work includes projects with solar energy which stretches around the continents. Although the company originated in the UK, its activity stretches around many countries and their stock value is always being monitored by potential investors. And it is easy to understand why as the companies’ market capital is estimated at over 2.200 billion USD.
Should investors consider these companies?
These companies have a solid track record in the industry. Their growth is paramount to the industry and goes to show that many things are possible in the solar energy market. On the other hand, they had years of mild stagnation and this can be a concern for some investors but not so much if they think about the potential of the industry and the long-term return.
In short, it is hard to establish if these companies can be a good investment but this has more to do with the industry itself than with the companies. This is due to the fact that it can prove difficult to estimate the growth rate of the solar energy market.
Concerns to address with the company and industry
There are some legitimate concerns with the company and the industry itself. One main concern regards government subsidies which are likely to stop when the industry becomes dominant and overtakes traditional alternatives. How far can subsidies go? Will governments support the industry in the following years? These legitimate concerns have to be addressed by any potential investor.
Another legitimate concern comes with the ability to cope with the high demand of innovation in the industry. This is where many companies can struggle and being in the eco-friendly industry means that the technologies are always advancing and perfecting for a lower impact. Surprisingly, at the moment everything seems to be going fine and with subsidiaries in many countries, the companies can maintain balance using multiple sources of income. Things might change when the industry will become the number one option for energy on the market. That future is not that far and it will be up to the investors to decide if they want to take bigger risks now with the potential of earning more or smaller risk later with the potential of earning less.
Solar energy companies have been making steady progress over the past years. As you can see in the history of the above companies, they have increased their reach in the world and they have benefited by the ascendant trend in the industry. Other companies have diversified their activities trying to minimize risks and increase the number of income sources. It is still hard to say which approach is better and which companies are doing it the right way. The only thing that is known at this moment is the revenue each company makes and its track record to reach this revenue. It remains the best proof for any potential investor and the best approach to calculate a potential investment either now or in the future.
