The Solar Energy Industry's New Reality

Nascent industries like solar energy often go through big strategic shifts as companies determine how they're going to position themselves in the industry. One big decision companies have to make is if they're going to specialize in one segment of the market (horizontal integration) or vertically integrate and own multiple parts of the supply chain.

The solar industry's biggest players spent most of the time from 2000 to about 2017 trying to vertically integrate. Manufacturers like First Solar (NASDAQ: FSLR), SunPower (NASDAQ: SPWR), and Canadian Solar all built out panel manufacturing, bought utility-scale project developers, and even tried to get into financing solar projects long term.

However, the vertical integration model appears to be dead, and specialization in solar may be the future. The implications for investors are big from a strategic perspective.

Source Fool.com