Credit Suisse: Buy These Hot Solar Stocks, Stay Away From Others

• Alternative energy stocks have outperformed the S&P 500 so far this year
• Energy Storage and Wind have been the leading segments
• Despite concerns about China and ITC step-downs, discussions at the SPI conference were generally positive

In Credit Suisse’s latest weekly report on alternative energy stocks, the firms Alternative Energy Research team discuss which segments of alternative energy are performing best, what the team learned at the Solar Power International (SPI) conference and which stocks are their most and least-preferred names in the space.

Top segments
So far this year, Credit Suisse’s Clean Tech Index is up 7.9 percent versus a 4.9 percent decline by the S&P 500. While Solar (-11.8 percent), Efficiency & Smart Grid (-25.6 percent) and Biofuel (-5.7 percent) have all underperformed in 2015, Energy Storage (+19.5 percent) and Wind (+30.8 percent) have more than made up the difference.

SPI takeaway
Credit Suisse hosted more than a dozen meetings with solar companies during this year’s SPI conference.

“While we were enthused by what we heard from developers – BOS improvements, efficiency improvements, module pricing declines, robust bidding activity ahead of the ITC reduction – we were also cognizant of considerable concerns around the ITC step-down in 2017 for the U.S. utility-scale market, a nearing China/U.S. tariff settlement that could keep module prices at elevated levels (although positive for module manufacturers with Chinese capacity), and persisting delays of the Chinese FiT payment that is starting to call into question the value – and monetization options – of the assets being amassed in China,” Credit Suisse writes.

Stock picks
Credit Suisse names JinkoSolar Holding Co Ltd JKS, SunEdison Inc SUNE and SolarCity Corp SCTY as its top alternative energy stock picks. Yingli Green Energy Holding Co Ltd YGE is its least-preferred name.

Disclosure: the author holds no position in the stocks mentioned.