Active Solar - February 25 update

February closed with a -5.1% decline due to a sharp market reversal over the last 2 days of the month, mainly driven by an overreaction to a few 2025 guidance that came in below expectations, despite still pointing to revenue growth of +10-20% with sustained margins.

In addition, several US companies emphasized that none of President Trump’s executive orders are impacting the solar Investment Tax Credit. This suggests that investor concerns over policy impacts may be unjustified.

An FT article of February 5 provides a valuable overview of the current challenges facing the U.S. green energy sector: “Many energy executives said renewables combined with battery storage was the best option to meet any quick increase in power demand”.

Our 2025 expectations align with the Bloomberg’s consensus on our portfolio:

As a result, we continue to believe that most of our solar stocks are oversold. Active Solar presents a compelling contrarian investing opportunity - characterized by cheap valuation and a rapidly expanding solar market supported by a strong investment case.

Uncertainties are everywhere… but there’s certainty in the high growth of electricity demand!

In an era of heightened uncertainty, one trend remains indisputable: electricity demand is rising at an accelerated pace.

The latest IEA report Electricity 2025 clearly states that global electricity demand rose by 4.3% in 2024 and is projected to increase by 3.9% per year until 2027, marking a sharp acceleration from the 2.5% growth recorded in 2023.

This surge in electricity consumption is fuelled by several factors, including rising industrial production, increased air conditioning usage, accelerating electrification, and the expansion of data centres worldwide.

Renewables are set to meet around 90% of global electricity demand growth through 2027, with solar PV alone meeting 50% of the demand growth: