Government incentives and declining installation and maintenance costs for solar-powered systems have fostered a significant rise in demand for solar energy over the past years. However, as the industry struggles with raw material shortages and supply chain constraints, we think overvalued stocks Sunnova (NOVA), Beam Global (BEEM), and Solar Integrated Roofing (SIRC) are best avoided now. Read on for a closer look at these names.While significant emphasis is being placed on almost all clean energy sources globally, the solar power segment is attracting much investor attention and capital investments. Government incentives and declining installation and maintenance costs are also driving the solar energy market, which is expected to grow at a 20.5% CAGR over the next five years to $223.30 billion by 2026.
The industry is expected to remain constrained by the impact of supply chain bottlenecks and equipment shortages over the next few years, however. Furthermore, a global semiconductor chip shortage is affecting the industry’s production targets because semiconductors are a crucial component in battery storage and solar inverters.
So, although the solar industry’s long-term outlook remains bright, we think its bleak short-term growth prospects make highly overvalued stocks Sunnova Energy International Inc . (NYSE:NOVA), Beam Global (BEEM), and Solar Integrated Roofing Corporation (SIRC) best avoided now.