Hot Picks: Solar stocks gain from tariffs and storage growth

Solar companies are pursuing opportunities across domestic manufacturing, power equipment and emerging renewable-energy technologies.

BNN Bloomberg spoke with Vikram Bagri, director of alternative energy, renewables and refining at Citi, about his preferred solar stocks and the potential catalysts affecting their valuations.

Key Takeaways

• Higher U.S. polysilicon tariffs could improve the competitive position of manufacturers that do not rely on the imported material.
• Changes in domestic solar-panel prices could have a significant effect on the valuation of U.S. manufacturers.
• Tax credits represent a substantial but separately valued component of some solar companies’ projected worth.
• Solar equipment suppliers are diversifying beyond trackers into inverters, battery storage and electrical systems.
• U.S. energy-storage installations are forecast to grow at a compound annual rate of about 30 per cent.

Read the full transcript below:

ROGER: The sun is shining for today’s top picks, with our next guest zeroing in on three options in solar energy. Here to share more on Hot Picks, let’s welcome Vikram Bagri, director of alternative energy, renewables and refining at Citi. Vikram, thanks very much for joining us.

VIKRAM: Thanks for having me.

ROGER: I’ve got to ask, where are you right now?

VIKRAM: I am in L.A. after a meeting with clients, so I got stuck in traffic. I’m in a car right now. All right.

ROGER: Well, is it a solar-powered car? Let’s, let’s get right to this. The one you’re liking is First Solar. Tell us a little bit about it.

VIKRAM: Yeah, First Solar is a unique company. They, they make solar panels 100 per cent domestically in the U.S. They have no reliance on polysilicon, which is, you know, the required sort of, like, element for, for making solar panels for everyone else.

ROGER: Oh. Do we have you still, Vikram?

VIKRAM: … supply chain typically depends.

ROGER: You cut out a little bit there. Could you just repeat that first part?

VIKRAM: Yeah. So, they are a solar-panel manufacturing company in the U.S., located in the U.S. One hundred per cent domestic solar panels in the U.S. They are not reliant on polysilicon supply for making their solar panels. They do not use polysilicon in their solar panels. And, as you know, the polysilicon supply chain is, you know, very heavily dependent on China.

Currently, the U.S. is doing an investigation under Section 232 to impose tariffs on imports of polysilicon into the U.S. The results of that investigation were expected at the end of June, and so those results can come out any time. The higher the tariffs are, the more, you know, First Solar benefits from it because domestic panel prices go up, but First Solar will not be liable for those tariffs. They will not be paying those tariffs because they don’t import polysilicon.

Now, we think if panel prices go up in the U.S. as a result of these impending tariffs, you know, every cent change in panel pricing domestically in the U.S. adds about US$30 per share of value to First Solar. And in our upside-downside case, if there are no tariffs, the stock would fall sort of below US$200. But if, you know, tariffs add about five to six cents in value for domestic solar panels, the stock would rise to about US$350. So, every cent of panel pricing is adding about US$30 per share for First Solar.

ROGER: Any concerns with the possibility they’re relying on those tax credits from the U.S., that they might be phased out or phased out early?

VIKRAM: Yeah, that’s a great question. We value those tax credits separately on an NPV basis. We think those tax credits add about US$90 to US$100 in value to First Solar, and then we value the rest of the company separately, excluding those tariffs. And that’s how we arrive at the valuation of over US$300 at a 36-cent-per-watt price of panels in the U.S. post-tariffs.

So, we take into account those tariffs. Investors have been talking about the possibility of an extension of those tariffs because of, you know, sort of, like, the popularity of Democrats in the U.S., you know, the possibility of Democrats taking the House in the, in the upcoming elections and so forth. We do not consider that in our model. We assume tariffs go away. We take a net present value of those tariffs, and we value those tariffs separately from the base value of the core business.

ROGER: Okay, and the Series 7 module — they had some quality issues. That cleared up?

VIKRAM: Yeah, they are cleared up. The company has clarified there are no more issues with Series 7. They are in the process of launching a couple of new products, which are not in our valuation. They have a technology, CuRe technology, for which they are doing tests that could add about US$500 million to US$600 million in value, you know, over time for the company as they start deliveries of those products.

Those new products are not in our forecast. They are working on a tandem module, which they might use in residential solar systems as well. That’s not in our forecast. So, the technology roadmap is, is not in our forecast. The way we value the company is the business as it is today and the possibility of upside from tariffs.

ROGER: Okay, let’s move on to Nextpower.

VIKRAM: Yeah, we like Nextpower because it’s a, it’s a globally diversified play on solar. They are in multiple different geographies in the world. Wherever they have gone, they have gotten top market share in solar trackers. Trackers are the systems on which you put the panels in, in the field, the utility-scale panels, and they follow the sun to [inaudible] the energy generation.

This company has evolved from just being a tracker company to a diversified equipment supplier to utility-scale solar. They are now testing inverters for utility-scale solar projects. That market is heavily reliant on foreign players. About 91 per cent of the inverters installed in the U.S. in utility-scale solar are supplied by non-U.S. companies. There is only one U.S. company that makes inverters in the U.S. So, that market is pretty wide open. If that inverter is successful, they can gain market share very rapidly.

They’ve entered into the storage business, which we think adds about US$10 per share of value. Forecast storage installation growth in the U.S. will grow at about a 30 per cent CAGR. It’s one of the fastest-growing subsegments within renewables, the storage installations, and they have exposure to that. They have a bunch of other assets, small assets that they have acquired, electrical balance of systems and all, which are ramping up.

Overall, we think it’s a very high-quality company, a very high-quality management team, trades at an attractive valuation and has upside through traction in these new segments they’re entering.

ROGER: All right, we’ve got to wrap it up there. My apologies. We talked a little too much about First Solar, but Sunrun is your third one. We are out of time, Vikram. Get to where you’re going safely. Thanks very much for joining us.

---

This BNN Bloomberg summary and transcript of the July 16, 2026 interview with Vikram Bagri are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.