In this article we presented our list of the 10 best solar energy stocks to buy now. Click to skip ahead and jump to 5 Best Solar Energy Stocks To Buy Now.
Buying solar energy stocks is not always as straightforward as it should be. With so many choices, investors are really confused and they want to catch up with growing investor interest and sky-high stock returns. Now, we take a closer look at the solar energy sector and stocks.
Investing in Renewable Energy has never been so important. As society faces climate change and its consequences, businesses have to put a lot of effort in to meet compliance requirements. One way is doing this is by increasing the usage of renewable resources to meet the energy demand. Besides, governments support renewable energy generation to reach their net-zero emission targets. As a result, companies are taking advantage of this interest and the number of renewable energy companies is skyrocketing. Not only does the sector focus on PV systems, but also solar thermal applications besides manufacturing components, installation, and operating services.
There is no doubt that Biden’s administration will support the renewable energy sector as he announced ‘9 Key Elements for a Clean Energy Revolution’. The hearth of the plan and probably the most exciting part is that putting America on a path to achieve net-zero emissions no later than 2050. Furthermore, the USA will likely spend $400 billion over ten years on clean energy and innovation in accordance with his statement. Precisely, solar energy is going to be very much part of this policy.
According to International Energy Agency (IEA), "power generation from solar PV is estimated to have increased by 22% in 2019, to 720 TWh. With this increase, the solar PV share in global electricity generation is now almost 3%". IEA is also expecting that Solar PV electricity generation capacity will go up by 19.2% in 2022. Furthermore, Solar PV will account for 55% of total renewable electricity production in the same period. According to IEA, 'Average annual solar PV capacity additions during 2023‑25 are expected to range from 130 GW in the main case to 165 GW in the accelerated case, accounting for almost 60% of total renewable energy expansion.’
With all the positive reviews and news, it sounds like a good idea to invest in solar energy stocks that are prioritizing cash generation and have healthy balance sheets. The finance sector has already tailored itself to the new solar revolution through ETFs. Consequently, energy ETFs captured the attention of investors. In order to come up with the 10 best solar energy stocks to buy now, we identify the publicly traded solar energy stocks that are in Invesco Solar ETF (TAN) and ranked them using Insider Monkey's hedge fund sentiment data.
Why do we believe hedge fund sentiment data will help us identify the best solar energy stocks to buy now? Our in-house analysis shows that we can use the sentiment information gathered from the hedge fund filings to classify in advance a select group of stocks that can beat the S&P 500 index by double digits annually on average. For instance, the portfolio of our monthly newsletter’s stock picks has beaten the market by over 88 percentage points since March 2017 (see the details here). Some of the portfolio holdings of our monthly newsletter have been shared publicly too. In October, we shared this real estate stock and since then, it’s been up nearly 50 percent.
Based on our hedge fund sentiment data, here are the 10 best solar energy stocks to buy now:
Hannon Armstrong is a US-based large-cap investment company solely dedicated to investments in climate solutions, providing capital to companies in energy efficiency, renewable energy, and other sustainable infrastructure markets. The business currently has more than $6 billion in managed assets with 208 total investments. The company’s key markets are distributed solar systems, storage, onshore wind and solar land grid connections, stormwater remediation, ecological restoration.
Real estate and alternative energy funds are currently holding the company’s stock. Stock gain this year is 116,9% and the compound 3 year revenue growth rate is 34.4%
SPWR ranks 9th in our list of the best solar energy stocks to buy now. Sunpower is a US-based large-cap company that designs all-in-one residential and commercial solar system solutions backed by personal customer service. The company has received more than 1000 patents for solar innovation. Sunpower is about to close its solar manufacturing plant and planning to focus on solar and battery storage system sales and services in the US and Canada as well as developing downstream energy services products such as energy management software.
Stock gain this year is 290.7% and the compound 3 year revenue growth rate is -3.6%. Here is what we wrote about SPWR last week:
"SPWR shares traded nearly flat during the first half of 2020, as its solar installation operations experienced a setback due to the pandemic. Nevertheless, the roll-out of a successful vaccine against the Covid-19 and increasing demand for renewable energy sources is expected to have a positive impact on SPWR stock in the coming quarters. Around 2 percent of households in the U.S. currently use solar power to light up their homes. Solar capacity is anticipated to increase by three folds in the new home market by 2025. Hence, there is a massive opportunity for SunPower in the U.S. market. The company is already working with most of the leading builders in the country for solar panels deployment.
DQ ranks 8th in our list of the best solar energy stocks to buy now. Daqo New Energy is a China-based large-cap company that leading manufacturer of high-purity polysilicon for the global solar PV industry. The company is known for high-purity polysilicon production with a capacity of 70.000 metric tons per year.
Stock gain this year is 660.8% and the compound 3 year revenue growth rate is 29.7%.
CWEN ranks 7th in our list of the best solar energy stocks to buy now. Clearway Energy Inc is a North America-based large-cap company that publicly-traded energy infrastructure investors focused on modern, sustainable, and long-term contracted assets across North America. The company currently holds over 7,000 megawatts of wind, solar and natural gas-fired power generation facilities, as well as district energy systems. The business consists of a 2,472 MW natural gas power plant, 1,157 MW utility-scale solar plant, 159 MW distributed solar power plant, 2,413 MW wind power plant, and 39 MW thermal generation plant. The total assets are worth 6,240 MW.
Recently, the company has signed a 1.6 GW portfolio of renewable energy assets including solar and wind projects with its renewable development partner company Clearway Energy Group. Stock gain this year is 72.7% and the compound 3 year revenue growth rate is 4.1%.
NOVA ranks 6th among the 10 best solar energy stocks to buy now. Sunnova Energy International Inc is a US-based large-cap company that provides residential solar and energy storage services, with customers across the US and its territories. With home solar systems, battery storage, roof replacement, monitoring, maintenance, and financing options, the company has more than 100k customers. The rise in retail residential electricity rates in the U.S is leading to the rooftop solar systems growth where the company benefits from.
Stock gain this year is 349.5% and the compound YoY revenue growth rate is 27%.
