First Solar, Inc. (FSLR), SunPower Corporation (SPWR), Sunedison Inc (SUNE): Solar Winners and Losers Emerge as Industry Matures

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Until investors can buy into completed solar projects through REITs or MLPs; the growth right now is in residential solar. SunPower Corporation (NASDAQ:SPWR) and SolarCity are seeing explosive growth in solar leasing, and that momentum doesn’t appear to be slowing.

Japan, China, Europe, and the U.S.
Europe was once the home of nearly all solar demand, but the tables have turned in recent years. Japan’s installations were up 270% in the first quarter, the U.S. was up 33%, and China announced a plan to install 35 GW of solar by 2015.

Japan and the U.S. will act similarly going forward because a lot of projects are on rooftops of either homes or commercial buildings. SolarCity will benefit domestically as seen by a 144% jump in installations in the second quarter. SunPower and Canadian Solar Inc. (NASDAQ:CSIQ) have seen a huge jump in demand in Japan. Canadian Solar Inc. (NASDAQ:CSIQ)’s recently reported numbers show that 35.7% of modules went to Japan, and 28% of SunPower Corporation (NASDAQ:SPWR)’s went there.

These new markets, not Europe, will drive the solar industry’s growth over the next few years. Investors will want exposure to companies taking advantage.

Foolish bottom line
Overall, the solar industry is growing, but it’s key to understand how it’s growing, and how that impacts our investments. The utility scale market is cooling, and so is Europe, but the U.S. and Japan’s residential and commercial demand have taken its place. These trend have favored high efficiency, high quality module makers and lease installers. That’s what we’ve seen during earnings season so far.

The article Solar Winners and Losers Emerge as Industry Matures originally appeared on Fool.com and is written by Travis Hoium.

Fool contributor Travis Hoium manages an account that owns shares of SunPower and personally owns shares and has the following options: long January 2015 $5 calls on SunPower, long January 2015 $7 calls on SunPower, long January 2015 $15 calls on SunPower, long January 2015 $25 calls on SunPower, and long January 2015 $40 calls on SunPower. The Motley Fool has no position in any of the stocks mentioned.

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