In this piece, we will take a look at the 12 most promising clean energy stocks according to analysts. If you want to skip our analysis of the clean energy industry and the latest news, then take a look at 5 Most Promising Clean Energy Stocks According to Analysts.
The clean energy industry made up primarily of renewable energy sources such as solar and wind power, has been at the center of media coverage as 2023 comes to an end. This is because of the COP28 climate conference held in Dubai and attended by dignitaries from all over the world. Despite the controversies that surfaced before the event, its conclusion saw countries agree to "transition away" from fossil fuels. This language drew sharp criticism as the delegates were criticized for not doing enough and committing to a full fossil fuel phaseout.
Yet, while fossil fuels as a whole were not on the execution table, COP28 did see the U.S. agree to phase out coal from its energy supply chain. U.S. Special Envoy John Kerry revealed at the event that his country had agreed to stop building new coal power plants and phase out existing ones. Another key development, especially when it comes to the corporate side of things, was the Oil and Gas Decarbonization Charter. This charter, which seeks to end gas flaring by 2030, become net zero by 2050, and zero out methane emissions, was signed by some of the biggest oil companies in the world such as Exxon Mobil Corporation (NYSE:XOM), Shell plc (NYSE:SHEL), and Equinor ASA (NYSE:EQNR). Together, all these signatories control 40% of the world's oil production. However, the initiative was also the center of criticism, with the research group Climate Action Tracker calling the decarbonization charter:
a greenwashing initiative by oil and gas companies. It only focuses on upstream emissions from oil and gas production – but the real change has to come from phasing out fossil fuels, where emissions are at least five times greater.
Another major development at the COP28, especially when it comes to the clean energy industry, was the Global Renewables and Energy Efficiency Pledge. This is an initiative of which 130 countries are part of, and it seeks to triple global installed renewable energy capacity to 11 terawatts by 2030. It is particularly notable since the developed world, made of countries such as the United States and the European Union block, is also joined by others such as Brazil, Nigeria, and Chile. However, while the commitments by more than a hundred countries are notable, the fact that China and India are not part of this list is worrying. Insider Monkey's coverage of 25 Countries that Produce the most Carbon Dioxide Emissions shows that China is part of this list, while India and China are both present in our coverage of 20 Countries That Produce the Most Coal.
This makes it clear that the clean energy industry is set to thrive. After the 2022 Russian invasion of Ukraine which shook the global oil supply chain, renewable energy sources were put on the back burner as governments and companies focused on maintaining stability of fossil fuel supply. When coupled with rapid interest rate hikes that have upended global capital markets, clean and renewable energy have continued their drop in 2023. For example, consider the performance of the Invesco Global Clean Energy UCITS ETF from the start of January 2023 to December 11th, 2023 (the day before the clean energy initiatives were announced). During this time period, the ETF was down by 20.4%, after posting some gains during the stock market frenzy of H1 2023. However, immediately after the COP28 initiatives were announced, the ETF gained 9.6% on the market. The stock market is an estimation of investors' expectations for the future, so it can be concluded that cOP28 led them to become positive about clean energy's future.
Yet, while the COP28 commitments are less than a month old, investors have already been piling into the clean energy sector. We took a look at these investments as part of our coverage of 12 Best Clean Energy Stocks To Buy According to Billionaires. In this list, the top three stocks that billionaire owned or led hedge funds had bought during Q3 2023 were Sunrun Inc. (NASDAQ:RUN), Enphase Energy, Inc. (NASDAQ:ENPH), and First Solar, Inc. (NASDAQ:FSLR).
But what about analysts? Well, we took a look at which clean energy stocks are the most promising according to analysts to determine that the top three were Shoals Technologies Group, Inc. (NASDAQ:SHLS), Plug Power Inc. (NASDAQ:PLUG), and Green Plains Inc. (NASDAQ:GPRE).
12 Most Promising Clean Energy Stocks According to Analysts
A renewable energy source such as solar, wind or hydropower being installed in an industrial setting.
Our Methodology
To make our list of the most promising clean energy stocks according to analysts, we ranked the top 30 stocks of the iShares Global Clean Energy ETF by their average analyst percentage share price upside. Out of these, the top stocks were chosen.
Most Promising Clean Energy Stocks According to Analysts
Nextracker Inc. (NASDAQ:NXT) is a solar technology company that provides products that enable solar panels to track the Sun. The firm made a big announcement in December 2023 when it revealed that it had installed 10 gigawatts of solar trackers in its Middle Eastern, Indian, and African projects.
As of September 2023, 26 out of the 910 hedge funds profiled by Insider Monkey were Nextracker Inc. (NASDAQ:NXT)'s investors. It joins Shoals Technologies Group, Inc. (NASDAQ:SHLS), Plug Power Inc. (NASDAQ:PLUG), and Green Plains Inc. (NASDAQ:GPRE) in our list of the most promising clean energy stocks according to analysts.
Avangrid, Inc. (NYSE:AGR) is an American utility headquartered in Orange, Connecticut. The firm uses solar, wind, and other renewable energy sources to generate electricity. December 2023 saw the firm share with regulators that it had already hired 500 union workers for a wind power plant in Massachusetts.
During this year's third quarter, 19 out of the 910 hedge funds part of Insider Monkey's database had held a stake in Avangrid, Inc. (NYSE:AGR). Cliff Asness's AQR Capital Management was the firm's largest shareholder as it owned $26.5 million worth of shares.
ReNew Energy Global Plc (NASDAQ:RNW) is a British pure play renewable energy company that generates power in India. The firm has beaten analyst EPS estimates in three out of its four latest quarters and the stock is rated Strong Buy on average with an average share price target of $8.26.
Insider Monkey's September quarter of 2023 survey covering 910 hedge funds revealed that 13 were the firm's investors. ReNew Energy Global Plc (NASDAQ:RNW)'s biggest hedge fund investor is David Rosen's Rubric Capital Management due to its $54.7 million stake.
9. Brookfield Renewable Corporation (NYSE:BEPC)
Latest Analyst Share Price Upside: 19.41%
Brookfield Renewable Corporation (NYSE:BEPC) is an American pure play renewable energy firm that generates close to 13,000 megawatts of electricity. Its third quarter earnings saw the firm report a 7% annual funds from operations growth and $2.2 billion in transactions for equity investments.
Array Technologies, Inc. (NASDAQ:ARRY) is another solar panel tracking products and services provider. After the Federal Reserve's dovish stance injected fresh fervor into markets, Array Technologies, Inc. (NASDAQ:ARRY)'s shares have soared by 19.54% over the past month.
Insider Monkey dug through 910 hedge fund holdings for this year's September quarter and found 40 Array Technologies, Inc. (NASDAQ:ARRY) shareholders. The firm's biggest hedge fund investor is Jos Shaver's Electron Capital Partners since it owns 6.1 million shares that are worth $135 million.
First Solar, Inc. (NASDAQ:FSLR) is an American firm that sells solar panels in several different countries. The firm has beaten analyst EPS estimates in three out of its four latest quarters and the shares are rated Buy on average. Analysts have set an average share price target of $229.84 for First Solar, Inc. (NASDAQ:FSLR).
By the end of 2023's third quarter, 49 out of the 910 hedge funds covered by Insider Monkey's research were the firm's investors. First Solar, Inc. (NASDAQ:FSLR)'s largest stakeholder among these is Robert Pohly's Samlyn Capital as it owns $293 million worth of shares.
Canadian Solar Inc. (NASDAQ:CSIQ) is a Canadian company that sells solar panels and associated products used in solar power generation systems. It scored a big win in December 2023 by winning a battery storage technology supply contract for Britain's largest battery storage project.
As of Q3 2023 end, ten out of the 910 hedge funds part of Insider Monkey's database had held a stake in Canadian Solar Inc. (NASDAQ:CSIQ). Israel Englander's Millennium Management was the biggest investor due to its $25.6 million investment.
Shoals Technologies Group, Inc. (NASDAQ:SHLS), Canadian Solar Inc. (NASDAQ:CSIQ), Plug Power Inc. (NASDAQ:PLUG), and Green Plains Inc. (NASDAQ:GPRE) are some clean energy stocks finding favor with analysts.
