Goldman says battery storage, hydrogen and other clean energy stocks are where investors should be – EQ Mag Pro
Energy reliability and security are top concerns after Russia’s invasion of Ukraine disrupted global energy flows, and Goldman Sachs believes companies exposed to these themes will outperform going forward.
In other words, it’s not just about clean energy, it’s about clean, reliable energy. “We expect battery and hydrogen storage solutions to continue to receive greater attention from investors, who we believe have not yet fully appreciated their importance in mitigating market disruptions. electricity,” the company said in a note to customers on Monday. Storage is in some ways the missing link between our current energy system and one that is much more dependent on renewables.
Solar and wind are intermittent sources – if the sun isn’t shining or the wind isn’t blowing, power generation will struggle. This is where batteries come in. They can store excess energy when the sun is strongest and deploy stored energy at night. “We believe that increased renewable energy penetration, coal retirements and expected increases in demand for electrification initiatives such as electric vehicle charging will likely increase the focus on energy reliability,” said analysts led by Brian Singer.
On the battery storage side, Goldman has buy ratings on shares of Tesla and Stem. In addition to making electric vehicles, Tesla also makes Powerwall batteries. California-based Stem offers AI-enabled smart storage options. Goldman also favors Enphase and SolarEdge. The companies make specialty inverters for solar systems and also offer energy storage options, with a focus on residential. “Globally, we see several regulatory initiatives that could provide tailwinds to accelerate solutions such as battery storage and hydrogen to alleviate energy reliability issues,” the company said. One tailwind is the Cut Inflation Act, which President Joe Biden signed into law on Tuesday. The package includes the largest federal funding for climate initiatives in US history.
The bill includes for the first time ever a 30% investment tax credit for self-storage. Previously, the tax credit only applied to storage built next to a solar system. The bill also contains provisions to encourage and incentivize domestic supply chains for critical materials and battery technologies. On the hydrogen side, Goldman expects greater adoption in Europe, but some US-based companies are still exposed, including Baker Hughes. The oil services company is dependent on hydrogen through its infrastructure, distribution and transportation services. The Cut Inflation Act includes $9.5 billion for green hydrogen initiatives. And in Europe, green hydrogen has been labeled a critical technology in the bloc’s REPowerEU plan.
