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June 18, 2021

Adding LONG Solar Theme

Solar installations surged 46% the first quarter of this year, accounting for 58% of all electric capacity additions in the US. Installations are projected to climb further, aided by the Biden administrations clean energy efforts and rising corporate investment in renewable energy. In Q1, Utility-scale installations led the way with 3.6 GW of new capacity, while residential solar sales added 905 megawatts, an increase of 11% over the same period last year.

Though the price of polysilicon, a key material used in solar cells, has surged to near-decade highs and driven up costs for manufacturers, prices for the commodity may have finally peaked after a period of rapid speculation and will begin to ease soon. A reversal of that rally would also return solar energy back to its long-term trajectory of falling costs.

As MRP noted back in November, the International Energy Agency (IEA) has already anointed solar power the “new king” of global electricity markets after becoming the cheapest form of electricity in history.

For utility-scale solar projects completed this year, the average cost of electricity generation over the lifetime of the plant (called the levelized cost of electricity) was between $35 to $55 per megawatt hour in some of the world’s biggest markets — the US, Europe, China, and India. The cost for coal, in comparison, currently ranges between about $55 and $150 per megawatt hour.


MRP will be adding LONG Solar to our list of themes, effective today. We will track the performance of the theme with the Invesco Solar ETF (TAN).