In this article, we discuss the 11 cheap solar stocks to buy according to analysts. To skip the detailed analysis of the solar energy industry, go directly to the 5 Cheap Solar Stocks To Buy According To Analysts.
Renewable energy investments hit a record high in 2023. Bloomberg NEF reported that in the first half of the year, $358 billion worth of new investments were made in renewable energy, which was 22% more than in the first half of 2022. Most of these investments were accounted for by China at $177 billion, up 16% year-over-year (YoY). In comparison, the US renewable energy investments were around $36 billion for 1H 2023. Two-thirds of total global renewable energy investments were made toward solar energy technologies. Solar energy investments were up 43% YoY in the first half of 2023 to $239 billion. Earlier in the year, the U.S. Environmental Protection Agency also launched a $7 billion “Solar for All” grant competition in an effort to increase access to affordable and clean solar energy for low-income households.
The International Energy Agency estimates a total investment of $2.8 trillion in the energy sector with $1.7 trillion worth of investments in the renewable energy industry alone. The IEA believes that solar energy investments in 2023 could reach around $380 billion by the end of the year.
2023 and Beyond for Solar Energy
In the first half of 2023, 45% of all new electricity-generating capacity added to the US grid was accounted for by solar energy. Through the rest of the year, the Solar Energy Industries Association (SEIA) and Wood Mackenzie expect distributed solar (solar panels placed on individual businesses or homes) to experience modest growth while solar’s utility segment could nearly double compared to 2022. In the first half of 2023, with the exception of hydropower, utility-scale renewable generation fell by 2.7%. However, solar is the only non-hydro renewable that has experienced growth. Solar and photovoltaics (PV) grew by 7.3%, while biomass, wind, and geothermal generation declined by 5.6%, 5.2%, and 2.7%, respectively.
By the end of 2023, the SEIA and Wood Mackenzie predict 32 gigawatts-direct current (GWdc) of solar capacity to come online, showing a 52% YoY growth. According to the firms, the operating solar capacity could grow from the current 153 GW to 375 GW by 2028.
Solar Energy Stock Performance
The solar energy stocks have performed poorly this year mainly because panel installation financing costs skyrocketed due to high interest rates. The Global X Solar ETF (NASDAQ:RAYS) and Invesco Solar ETF (NYSE:TAN) are down over 42% and 39% at the time of writing on November 6. Similarly, some of the Wall Street analysts’ favorite solar stocks, such as Sunrun Inc. (NASDAQ:RUN) and Sunnova Energy International Inc. (NYSE:NOVA), are down nearly 55% and 42% at the time of writing.
Nonetheless, solar energy investments are still on the rise, and with the increases in solar capacity, the beaten-down solar stocks are ripe for growth. Moreover, on November 2, the Federal Reserve kept the short-term interest rate unchanged for the second time, and the Chair, Jerome Powell, said that progress is being made even if it's “in lumps.” Additionally, consumer inflation was recorded at 3.7% in October 2023, compared to 9.1% in June 2022. The interest rate and inflation slowdown, coupled with government policies such as the Inflation Reduction Act, could boost solar investments and generation even further. In case of a rebound, some of the best solar stocks that Wall Street analysts recommend are Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN), Sunnova Energy International Inc. (NYSE:NOVA), and Sunrun Inc. (NASDAQ:RUN).
11 Cheap Solar Stocks To Buy According To Analysts
A panoramic view of a concentrated solar power plant swathed in bright sunshine.
Our Methodology
For this article, we made a list of companies with significant operations in the solar sector and checked their analyst price target upside on TipRanks. Out of our list, we chose the 11 companies with the highest analyst price target upside as of the November 6 market close.
11 Cheap Solar Stocks To Buy According To Analysts
Average analyst price target upside as of November 6: 47.66%
Enphase Energy, Inc. (NASDAQ:ENPH) is the first company in the world to commercialize the solar micro-inverter. It also manufactures battery energy storage solutions and EV charging stations. Enphase Energy, Inc. (NASDAQ:ENPH) is headquartered in California and serves customers in over 140 countries.
Enphase Energy, Inc. (NASDAQ:ENPH) has been covered by 26 analysts with an average price target of $115.44, showing an upside of 47.66% from its November 6 price of $78.18. Out of the 26, 13 analysts maintained a Buy rating on the company stock.
In Q2, 50 hedge funds had a stake in Enphase Energy, Inc. (NASDAQ:ENPH) at a combined value of $772.727 million. Coatue Management owned 612,351 company shares worth $102.556 million, making it the most prominent investor of the company.
Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN), Sunnova Energy International Inc. (NYSE:NOVA), and Sunrun Inc. (NASDAQ:RUN) are cheap solar stocks to buy along with Enphase Energy, Inc. (NASDAQ:ENPH).
Average analyst price target upside as of November 6: 50.00%
JinkoSolar Holding Co., Ltd. (NYSE:JKS) offers products and services for solar power generation and processing services. The company is known for its innovative solar modules and has 14 factories globally.
On October 25, JinkoSolar Holding Co., Ltd. (NYSE:JKS) announced that it will be solidifying its position in the Middle East and North Africa (MENA) region as it signed a significant supply contract with ACWA Power. The company will be supplying its signature 3.8 GW N-type Tiger Neo modules for ACWA Power’s projects in Saudi Arabia.
On October 30, JinkoSolar Holding Co., Ltd. (NYSE:JKS) posted its Q3 GAAP EPS of $2.53, and revenues for the quarter increased 63% YoY to $4.36 billion, topping the analysts’ estimates by $170 million. The corporation also announced that it has broken the record for maximum solar conversion efficiency by achieving 26.89% for its 182 mm and above large-size monocrystalline silicon TOPCon solar cell.
Average analyst price target upside as of November 6: 51.86%
TransAlta Corporation (NYSE:TAC) is an electricity power generation corporation that utilizes sources like water, wind, solar, natural gas, and thermal coal. The company’s solar power fleet generates 143 MW.
On November 2, TransAlta Corporation (NYSE:TAC) announced that it will acquire Heartland Generation and its entire business operations in Alberta and British Columbia, and the deal is valued at around C$658 million. The management mentioned that the assets are likely to add C$115 million in average annual EBITDA.
On November 7, TransAlta Corporation (NYSE:TAC) announced its Q3 funds from operations of C$1.36 and revenue of C$1.02 billion, up 9.8% YoY.
On October 30, TransAlta Corporation (NYSE:TAC) declared a quarterly dividend of C$0.055, payable by January 1 to the shareholders of record on December 1. As of November 6, the company’s dividend yield is 2.07%.
Average analyst price target upside as of November 6: 59.52%
First Solar, Inc. (NASDAQ:FSLR) is a Tempe-based company that designs, sells, and markets solar photovoltaic (PV) systems and offers operational and maintenance services for them as well.
On November 1, BofA raised the price target on First Solar, Inc. (NASDAQ:FSLR) stock to $272 from $266 and maintained a Buy rating. The firm mentioned that the company is on the path to a fiscal year beat when it comes to the company’s Q4 and considers its guidance to be “conservative”.
On October 31, First Solar, Inc. (NASDAQ:FSLR) reported its Q3 GAAP EPS of $2.50, outperforming the estimates by $0.46. The revenue for the quarter increased 27.4% YoY to $801.09 million. The management raised its mid-point of EPS guidance from $7.50 to $7.60 while maintaining the revenue guidance for the full year 2023.
On November 1, First Solar, Inc. (NASDAQ:FSLR) announced that its agreement with Swift Current Energy has been extended as it will supply the company with 500 megawatts (MW) of advanced Series 7 thin film modules. The orders for the modules are expected to be delivered between 2027 and 2028.
Average analyst price target upside as of November 6: 64.22%
Shoals Technologies Group, Inc. (NASDAQ:SHLS) is a Tennessee-based manufacturer and seller of electrical balance of system solutions and parts for solar energy projects. The company is a cheap solar stock, and some of its solar products include big lead assemblies, combiner boxes, and transition boxes.
Shoals Technologies Group, Inc. (NASDAQ:SHLS) stock was covered by 10 analysts over the last three months, and 7 of them kept a Buy rating on the company stock. Its average analyst price target shows a 64.22% upside to its stock price of $15.65 on November 6, making Shoals Technologies Group, Inc. (NASDAQ:SHLS) the 8th cheapest solar stock according to analysts.
On October 11, Shoals Technologies Group, Inc. (NASDAQ:SHLS)’s stock was upgraded to Buy from Neutral by Goldman Sachs analyst Brian Lee with a $28 price target.
Average analyst price target upside as of November 6: 65.83%
Array Technologies, Inc. (NASDAQ:ARRY) is a manufacturer of solar tracking products and solutions. The company is headquartered in New Mexico and operates manufacturing sites in Brazil and the U.K.
On November 2, Array Technologies, Inc. (NASDAQ:ARRY) announced that it has received $2.5 million in Local Economic Development Act funding to establish a new manufacturing campus in Bernalillo County in New Mexico. The company expects the construction of the $50 million campus to begin in early 2024.
On October 19, JPMorgan analyst Mark Strouse decreased the price target on Array Technologies, Inc. (NASDAQ:ARRY) stock from $35 to $32 and kept an Overweight rating. The analyst mentioned that the Q3 results will prove to be catalytic for energy stocks. The firm put Array Technologies, Inc. (NASDAQ:ARRY) on “Positive Catalyst Watch” before its anticipated earnings report.
Array Technologies, Inc. (NASDAQ:ARRY) is one of the cheap solar stocks to buy according to analysts, in addition to Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN), Sunnova Energy International Inc. (NYSE:NOVA), and Sunrun Inc. (NASDAQ:RUN).
