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One of the Best Solar Stocks in 2018 Is Trading at a Huge Discount Now

Posted On February 22, 2018 4:09 pm
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Even though U.S. President Donald Trump just announced a 30% tariff on solar panels, investors still have a golden opportunity to invest in one of the best solar stocks in 2018

On Jan. 24, President Trump announced there would be a new 30% tariff on solar panels imported into the United States. Because China is the world leader in solar panel production, this announcement was a signal that the administration is keeping its promise to fight against cheap Chinese imports.

But the action has also scared away some who would otherwise invest in China’s solar industry.

Just look at how the event was reported.

The South China Sea Post announced, “Chinese Stocks Spooked by Trump Tariffs…”

“Trump’s Solar Tariffs Are Clouding the Industry’s Future,” claimed The New York Times.

“Trump’s Solar Tariffs Are a Big Blow to Renewables,” said Fortune.

But these are all major overreactions.

Not only is a 30% tariff not likely to put much of a dent in the global solar industry, but we’ve uncovered a way for investors to make a profit from this latest move.

While Chinese solar stocks did take a slight hit – more on that later – it’s actually a great buying opportunity for investors who want to profit from solar power.

China’s Solar Industry Is Set to Soar 700 Percent

Trump’s solar tariff isn’t going to slow down the Chinese solar industry or solar stocks. At least it won’t for long, and that’s an opportunity for savvy investors.

There are two reasons why it’s still a good idea to jump into this market with both feet.

First, the Chinese solar market has experienced such rapid growth in recent years that tariffs aren’t going to make a difference.

In other words, China’s solar growth is so explosive, it will easily outgrow any slowdown the U.S. tariff causes.

China is not only the largest exporter of solar panels in the world, but it is also the world’s largest consumer of solar energy.

Even if Chinese exports of solar panels dropped in the short term, the potential in the long term is more important.

You see, China consumes 5.9 kWh of electricity annually, which is 50% more than that used in the United States. To meet its massive demand for energy, the country has been pushing a solar energy solution.

In just the past year, China completed construction on both the world’s largest floating solar farm and the largest traditional solar farm in the world. Combined, these farms generate enough power to sustain 215,000 homes. This would be the equivalent of the entire city of Richmond, Va., running on solar power.

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But even with China’s solar dominance, there is even more potential for solar energy growth out of China.

Solar power in China currently accounts for just 5% of the country’s total energy production, while coal is responsible for 59% of the country’s energy.

If China’s solar energy use expands to even a half of the share of its coal use, the growth in the solar industry will be mind-blowing.

In fact, Wood MacKenzie has forecast that the solar power generation out of China will grow by a staggering 700% by 2035.

The second reason why buying solar stocks in Chinese companies is still a good idea is because solar panel prices are rapidly dropping.

That means a 30% tariff won’t hurt imports for long.

The cost of solar panels has fallen almost 80% since 2010. And prices fell 20% between 2016 and 2017 alone.

As the technology related to the solar industry improves, the costs associated with development and installation will also drop. Since these costs are plummeting, a 30% tariff isn’t going to make much of a difference and certainly won’t slow down China’s booming solar industry over the long term.

This can only mean that there are profits on the horizon for investors who are ready to buy the best Chinese energy stock at a significant discount.

And we have the best Chinese solar stock to buy in 2018 right here.

Our Top Pick Among the Best Solar Stocks in 2018

JinkoSolar Holding Co. Ltd. (NYSE: JKS) is a China solar energy company that began manufacturing solar wafers and photovoltaic cells (PV) back in 2006.

The company is one of the world’s premier solar concerns, and it is now available to investors at a major discount.

JKS is currently trading at $18.69, which is 25% below its 2018 high of $25.05 on Jan. 2.

But this “sale” on JKS shares won’t last long.

In just over 10 years, JinkoSolar has expanded to become the world’s third-largest producer of PV cells by capacity.

And it’s only growing from there.

In Q1 2017, the company became the first producer of PV cells to ship over two gigawatts in one quarter. Astoundingly, it beat that record the very next quarter, with a shipment of 2.8 gigawatts.

Considering the growth in the industry producing Chinese solar cells, these records aren’t surprising. But JKS has also proven to be one of the best solar manufacturers in the business.

Money Morning Global Energy Strategist Dr. Kent Moors believes that JinkoSolar is perfectly positioned for gains thanks to its positive relations with the Chinese government and its existing global operations.

This means that JKS is poised to continue its growth alongside that 700% solar industry growth forecast from China.

And since China is already manufacturing 60% of the PV cells in the world, the company is ideally positioned to take on additional growth as more and more consumers, businesses, and governments make the switch to solar energy.

In fact, the EIA still forecasts that the United States will increase its solar production by more than 500% over the next two decades.

With or without a tariff, the United States will continue to import solar panels and other PV technology, which will be a boon for a company like JKS and investors who choose to invest in solar stock.

*This has been a guest post by Money Morning*

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