In this piece, we will take a look at the 12 solar energy stocks that billionaires are piling into. If you want to skip our overview of the solar energy industry and the latest trends, then check out 5 Solar Energy Stocks That Billionaires Are Piling Into.
The solar energy industry is one of the most important when it comes to reducing global emissions. Solar panels convert the Sun's energy into electricity, providing humanity with a limitless source of energy. Naturally, this means that the industry itself is quite lucrative. Market research shows that the renewable energy industry as a whole was worth $881 billion in 2020 and is expected to grow at a compounded annual growth rate (CAGR) of 8.4% until 2030 to have a final value of $2 trillion.
As is the case with oil, solar power generation is also dominated by a handful of countries. Solar power production requires hefty investment into solar panels, batteries, and associated products. Additionally, while solar power provides free energy if the investment costs in the equipment are ignored, its very nature makes it unfeasible as a complete alternative to fossil fuels. This is because fossil fuel power plants can run 24/7, while solar panels are limited to generating power during the day only. As a result, solar panels cannot provide adequate baseload power particularly at night time and during high energy usage periods such as summer seasons. Therefore, it has to be paired up with other sources to ensure there are no power outages.
Developments in solar power are taking place primarily in the developed world due to aggressive emissions targets. For instance, the U.S. is expected to expand its solar energy production by 32 gigawatts by 2023 in a positive development for the industry. This is because the 2022 Russian invasion of Ukraine was one of the most serious crises that the conventional energy sector had to deal with, particularly in the aftermath of the coronavirus pandemic that had sapped demand for fossil fuels due to lockdowns. Following the invasion, global oil prices shot up due to supply disruptions, and in a blow for solar, this also led to a drop in investments in solar energy. So, the 32 GW U.S. added solar energy production in 2023, which marks a 52% annual growth came after 13% contraction in the sector in the previous year, showing that the focus was reorienting itself towards going green.
Another key incentive for solar power in America has been the Biden-Harris Administration's Inflation Reduction Act (IRA). The IRA is a sweeping set of reforms that earmarks billions of dollars in incentives for both firms and consumers to reshape their energy production and consumption habits. Its scope and scale have also led reports to predict that from the 32 GW of solar production in 2023, America's solar power output will rise to 375 GW in 2028 from 153 GW as of November 2023.
Shifting gears to focus on solar power companies, they are primarily made of firms that generate solar energy and those that make the panels and other equipment. Starting from the former, we took a look at the 10 Biggest Solar Companies In The World in terms of their installed capacity as of 2019. The data shows that the three biggest solar power companies in the world were Adani Renewables, GCL, and SB Energy. Combined their installed energy capacity stood at roughly 28,000 megawatts.
However, moves in the solar space are not limited only to established industry players. Big tech has also been making waves, particularly due to the onset of cloud and data center computing. Data centers use large amounts of electricity and they add to the carbon footprint of their operators - which incentivizes firms such as Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT) to go green. Another tech mega cap that's making moves in the industry is Amazon.com, Inc. (NASDAQ:AMZN). The firm announced a cool 39 renewable energy projects in Europe in October 2023, adding to its already impressive portfolio of 160 projects in the continent. Through these projects, the global retail behemoth aims to generate 5.8 GW of renewable energy, through projects that it claims create €2.4 billion in investment opportunities and thousands of jobs.
Looking at this, it's clear that solar power is here to stay. So, we decided to look at which solar companies billionaires are buying, out of which some top picks are NextEra Energy, Inc. (NYSE:NEE), Tesla, Inc. (NASDAQ:TSLA), and First Solar, Inc. (NASDAQ:FSLR).
12 Solar Energy Stocks Billionaires Are Piling Into
A construction crew working on a solar energy system, revealing the company's drive for success.
Our Methodology
To make our list of the solar energy stocks that billionaires are piling into, we ranked the 30 biggest solar companies in the world in terms of their market capitalization by the number of billionaire owned or led hedge funds that had bought the shares in Q3 2023.
12 Solar Energy Stocks Billionaires Are Piling Into
JinkoSolar Holding Co., Ltd. (NYSE:JKS) is a Chinese solar company headquartered in Shang Rao, China. The firm makes and sells solar panels and other products with operations spread all over the world. It has beaten analyst EPS estimates in three out of its four latest quarters and the shares are rated Buy on average with an average share price target of $47.
During Q3 2023, 12 out of the 910 hedge funds part of Insider Monekey's database had held a stake in JinkoSolar Holding Co., Ltd. (NYSE:JKS). The firm's biggest hedge fund investor is Paul Marshall and Ian Wace's Marshall Wace LLP as it owns 730,842 shares that are worth $22.1 million.
Along with Tesla, Inc. (NASDAQ:TSLA), NextEra Energy, Inc. (NYSE:NEE), and First Solar, Inc. (NASDAQ:FSLR), JinkoSolar Holding Co., Ltd. (NYSE:JKS) is a top billionaire solar stock pick.
Daqo New Energy Corp. (NYSE:DQ) is a Chinese polysilicon manufacturer whose products are certified to be used in solar panels. Its revenues in the third quarter were cut by more than half as polysilicon prices dropped all over the world. However, its CEO shared that the lower prices helped Daqo New Energy Corp. (NYSE:DQ) clear up inventory.
As of September 2023 end, 18 out of the 910 hedge funds profiled by Insider Monkey were the firm's shareholders. Daqo New Energy Corp. (NYSE:DQ)'s largest shareholder among these is Larry Chen And Terry Zhang's Tairen Capital due to its $65.4 million investment.
Array Technologies, Inc. (NASDAQ:ARRY) is an American company that sells machines that enable solar panels to track the Sun's movement across the sky. Even though a weakening economy dented its third quarter results and made the firm miss analyst revenue estimate, it still announced a $50 million investment to build a new factory in New Mexico.
By the end of this year's third quarter, 40 out of the 910 hedge funds covered by research had bought Array Technologies, Inc. (NASDAQ:ARRY)'s shares. Out of these, the biggest investor was Jos Shaver's Electron Capital Partners as it owned $135 million worth of shares.
Nextracker Inc. (NASDAQ:NXT) is another backend solar company that makes and sells solar trackers. December 2023 saw the firm's CEO Daniel Shugar buy 37,821 Nextracker Inc. (NASDAQ:NXT) shares at a time when the stock is 32% on the market since February when the shares became available for public trading.
For their September quarter of 2023 shareholdings, 26 out of the 910 hedge funds polled by Insider Monkey were Nextracker Inc. (NASDAQ:NXT)'s investors.
TransAlta Corporation (NYSE:TAC) is a utility company with nearly two thousand megawatts of wind and solar power generation capacity spread across the U.S. and Canada. The firm has beaten analyst EPS estimates in three out of its four latest quarters and the stock is rated Buy on average.
During 2023's third quarter, 18 out of the 910 hedge funds surveyed by Insider Monkey had held a stake in the firm. TransAlta Corporation (NYSE:TAC)'s largest hedge fund investor is David Rosen's Rubric Capital Management as it holds a $38.3 million stake.
SunPower Corporation (NASDAQ:SPWR) is a solar hardware company that sells residential power generation and management systems. It's one of the struggling stocks on our list as not only has the firm missed analyst EPS estimates in three out of its four latest quarters, but the shares are also rated Hold on average. To make matters worse, SunPower Corporation (NASDAQ:SPWR) has also been sent a notice by the NASDAQ for failing to file its 10-Q. As if this weren't enough, its executive vice president of financial products suddenly stepped down in December 2023.
As this year's third quarter ended, 15 among the 910 hedge funds tracked by Insider Monkey had invested in SunPower Corporation (NASDAQ:SPWR). Ken Griffin's Citadel Investment Group was the biggest shareholder courtesy of its $5.9 million investment.
SolarEdge Technologies, Inc. (NASDAQ:SEDG) sells inverters, energy management systems, and other associated products for solar power systems. Its shares are rated Buy on average and analysts have set an average share price target of $96.91.
During Q3 2023, 27 out of the 910 hedge funds polled by Insider Monkey were the firm's shareholders. Out of these, SolarEdge Technologies, Inc. (NASDAQ:SEDG)'s largest investor was Ian Simm's Impax Asset Management as it owned 939,386 shares that are worth $121 million.
NextEra Energy, Inc. (NYSE:NEE), SolarEdge Technologies, Inc. (NASDAQ:SEDG), Tesla, Inc. (NASDAQ:TSLA), and First Solar, Inc. (NASDAQ:FSLR) are some solar energy stocks that billionaires are buying.
