In this article, we will take a look at the 12 best renewable energy stocks to buy now. To see more such companies, go directly to 5 Best Renewable Energy Stocks to Buy Now.
One of the few industries that are headed for a certain path of growth all over the world is renewable energy, thanks to the climate change problem, rising costs of conventional energy and attractive subsidies and incentives the developed world is offering to the consumers of renewable energy products. However, the industry is not immune to the wider macroeconomic challenges that are slaughtering the financial markets.
For example, solar energy stocks have been wavering in 2023 amid rising interest rates and industry-wide headwinds. Storms and rains have also delayed the deployment of solar panels across the country. Another factor that affected the industry is the recent flurry of layoffs in the tech sector, as data suggests that tech workers are the biggest customers of renewable energy products.
Another challenge for the industry came recently when The California Public Utilities Commission passed a proposal that will cut the incentives on the use of rooftop solar panels. Analysts believe that this initiative by California, which is seen as a leader in renewable energy policies, could spill over to other states and affect companies like Tesla, SunPower and Sunnova, which provide solar energy solutions for domestic customers.
Growth Drivers for the Renewable Energy Sector
Despite these headwinds, the broader outlook for the renewable energy sector is robust and strong.
The Inflation Reduction Act is one of the biggest growth drivers for the renewable energy sector. Another important factor that adds to the growth of the renewable energy companies is the dramatic rise in utilities costs.
According to Bloomberg, John Berger, Sunnova’s chief executive officer, said:
“Utilities keep sending us new customers. Last year, the price of electricity went up more than in the previous 10 years combined.”
Analysts believe the renewable energy market could get back on its high growth trajectory once the uncertainty recedes, interest rate hikes pause and broader economic turmoil reverses. According to Pol Lezcano, an analyst at BloombergNEF, in 2022, the US residential-solar industry set an annual record for installations last year. The analyst believes that despite the slowdown and headwinds in the industry, the deployment total in 2023 could cross last year’s numbers.
For this article, we scanned Insider Monkey’s database of 943 hedge funds and picked the top 12 renewable energy stocks. That means these are the most popular renewable energy stocks among the elite hedge funds in the world. With each stock we have mentioned the number of hedge fund investors as of the end of the fourth quarter of 2022.
Canadian Solar Inc. (NASDAQ:CSIQ) sells solar PV modules. It ranks 12th in our list of the best renewable energy stocks to buy now. Canadian Solar Inc. (NASDAQ:CSIQ) recently announced preliminary Q4 results and also gave Q1 guidance. For the fourth quarter, Canadian Solar Inc. (NASDAQ:CSIQ) expects its revenue to come in at $1.97 billion, better than its guidance range of $1.8 billion to $1.9 billion. Analyst consensus estimate for this figure was $1.86 billion. For the first quarter of 2023, Canadian Solar Inc. (NASDAQ:CSIQ) expects its revenue to come in the range of $1.6 billion to $1.8 billion, which is below the analyst consensus estimate of $2.04 billion.
Insider Monkey’s exclusive database of 943 hedge funds and their holdings shows that 16 funds had stakes in Canadian Solar Inc. (NASDAQ:CSIQ) at the end of 2022. The biggest hedge fund stakeholder of Canadian Solar Inc. (NASDAQ:CSIQ) was Ken Griffin’s Citadel Investment Group which had a $32.5 million stake in the company. The second biggest stakeholder was D. E. Shaw which had a $14.1 million stake in Canadian Solar Inc. (NASDAQ:CSIQ).
Avangrid, Inc. (NYSE:AGR) is an energy company serving millions of customers in the US. Avangrid, Inc. (NYSE:AGR) has a strong renewable energy portfolio consisting of wind and solar energy projects. At the end of the fourth quarter of 2022, 18 hedge funds tracked by Insider Monkey reported having stakes in Avangrid, Inc. (NYSE:AGR). The total value of these stakes was $141 million. The most significant stakeholder of Avangrid, Inc. (NYSE:AGR) was Cliff Asness’ AQR Capital Management which has a $36 million stake in the company.
In February, Avangrid, Inc. (NYSE:AGR) declared a per share dividend of $0.44, in line with the previous dividend. Forward dividend yield at the time came in at 4.34%. The dividend is payable on April 3.
SunPower Corporation (NASDAQ:SPWR) makes photovoltaic solar energy generation systems and battery energy storage products, primarily for residential customers. In February, SunPower Corporation (NASDAQ:SPWR) posted strong Q4 results that crushed analyst estimates. Adjusted EPS in the quarter came in at $0.15, beating estimates by $0.01. Revenue in the quarter jumped about 43% YoY to reach $497.4 million, beating estimates by $16.4 million.
SunPower Corporation (NASDAQ:SPWR) said that it added about 24,000 customers in the period. For 2023, SunPower Corporation (NASDAQ:SPWR) expects its adjusted EBITDA per customer before platform investment to come in the range of $2,450-$2,900.
At the end of the fourth quarter of 2022, 21 hedge funds tracked by Insider Monkey reported owning stakes in SunPower Corporation (NASDAQ:SPWR). The total value of these stakes was $161 million. The biggest stakeholder of SunPower Corporation (NASDAQ:SPWR) was D E Shaw with a $34.4 million stake in the company.
Hydrogen fuel cell company Plug Power Inc. (NASDAQ:PLUG) is one of the best renewable energy stocks to buy now.
Recently, Citi analyst P.J. Juvekar decreased his price target for Plug Power Inc. (NASDAQ:PLUG) stock to $20 from $21 but kept a Buy rating on the shares. The analyst said that Plug Power Inc. (NASDAQ:PLUG) has a first mover advantage to capture the benefits of the Inflation Reduction Act.
A total of 25 hedge funds tracked by Insider Monkey reported owning stakes in Plug Power Inc. (NASDAQ:PLUG). The total value of these stakes was $71 million. The most notable hedge fund stakeholders of Plug Power Inc. (NASDAQ:PLUG) include D E Shaw (over $20 million stake), John Overdeck and David Siegel’s Two Sigma Advisors ($13 million stake) and Philippe Laffont’s Coatue Management ($6 million stake).
Clearway Energy, Inc. (NYSE:CWEN) has significant wind and solar energy operations across 26 states in the US. Clearway Energy, Inc. (NYSE:CWEN) has a PE ratio of 5.94 which makes it an attractive option for those looking for undervalued plays in the renewable energy space. In February, Clearway Energy, Inc. (NYSE:CWEN) declared a quarterly dividend of $0.3745 per share, which was a 2% increase from its previous dividend. Forward dividend yield at the time came in at 4.48%. The dividend is payable on March 15 to shareholders of record as of March 1.
A total of 27 hedge funds tracked by Insider Monkey reported having stakes in Clearway Energy, Inc. (NYSE:CWEN). The total value of these stakes was $191 million. The biggest hedge fund stakeholder of Clearway Energy, Inc. (NYSE:CWEN) was Jos Shaver’s Electron Capital Partners which has a $27 million stake in the company.
Residential solar company Sunnova Energy International Inc. (NYSE:NOVA) ranks 7th in our list of the best renewable energy stocks to buy now.
Sunnova Energy International Inc. (NYSE:NOVA) recently posted Q4 results which were better than expected. GAAP EPS in the quarter came in at -$0.18, beating estimates by $0.26. Revenue in the quarter increased by 200.8% to reach $195.6 million, beating estimates by $55.84 million.
Sunnova Energy International Inc. (NYSE:NOVA) also reiterated its 2023 guidance.
Here is what ClearBridge Investments Small Cap Strategy has to say about Sunnova Energy International Inc. (NYSE:NOVA) in its Q3 2022 investor letter:
“Within the utilities sector, solar power and energy storage company Sunnova (NYSE:NOVA) saw its share price benefit from passage of the Inflation Reduction Act legislation, which includes an array of new and extended tax credits that should not only support but enhance the company’s long-term growth prospects.”
Israel-based SolarEdge Technologies, Inc. (NASDAQ:SEDG) is having a good year so far, having gained about 15% through March 8. SolarEdge Technologies, Inc. (NASDAQ:SEDG) makes solar inverters widely used in the solar energy industry.
At the end of the fourth quarter of 2022, 43 hedge funds tracked by Insider Monkey had stakes in SolarEdge Technologies, Inc. (NASDAQ:SEDG). The net worth of these stakes was $1.3 billion. The biggest hedge fund stakeholder of SolarEdge Technologies, Inc. (NASDAQ:SEDG) was Richard Mashaal’s Rima Senvest Management which had a $215 million stake in the company.
In February, SolarEdge Technologies, Inc. (NASDAQ:SEDG) posted strong Q4 results. Adjusted EPS in the quarter came in at $2.86, beating estimates by $1.27. Revenue in the quarter increased by about 61% on a YoY basis to reach $890 million, beating estimates by $11.64 million. SolarEdge Technologies, Inc. (NASDAQ:SEDG) posted record revenues from its solar segment, at $837 million.
