Across party lines in the United States and especially in the international sector, the move toward renewable energy is becoming more mainstream.
The best solar stocks could be set to benefit from this push.
The statistics are hard to deny.
According to the International Energy Agency, global renewable energy has grown by 1,200 gigawatts over the last five years.
60% of that energy growth is attributed to solar energy (1,200 gigawatts more than exceeds the average peak grid demand for the entire U.S.).
Here are some other facts you should know about the industry.
- By 2026, the global solar industry is projected to be worth $223.3 billion.
- The cost of solar energy has plunged 90% over the past decade.
For a 50-foot view of the industry, solar energy has witnessed an average annual growth rate of 49% over the last decade alone.
This growth is directly linked to strong federal policies like the Solar Investment Tax Credit.
In addition, there are rapidly declining installation costs and an increase in demand across private and public sectors for clean electricity.
More than 85 gigawatts of solar capacity are installed nationwide, enough to power 16 million homes.
Why Solar Stocks Should Be On Your Radar
If these numbers were not impressive enough for you, consider the implications of solar power on the job market.
The solar industry is just flat-out putting more people to work, another sign of a robust sector.
At the end of 2020, a quarter of a million Americans worked in solar, while the sector generated $18.7 billion in investment.
Tax credits were a part of this catalyst, but falling equipment and infrastructure prices have also made a huge difference.
An average-sized residential system has dropped from a pre-incentive price of $40,000 in 2010 to roughly $20,000 today.
A few years ago, solar power was only really available in sunny states like California and Florida.
Today, solar power is available in most U.S. cities and states.
While most of these numbers above reflect residential growth, solar power has also helped Fortune 500 companies save money.
Apple, Amazon, Target, and Walmart have all invested heavily in solar facilities at various locations across the country.
Apple leads the way with more than 390 megaWatts of commercial capacity, and Amazon is close behind with 329.
In recent years, the public has grown to realize the importance of investing in clean energy sources and protecting our planet.
President Biden’s recent infrastructure bill provides support to many solar companies and other sources of clean energy.
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Best Solar Stocks To Buy
Before we talk about stocks, let’s go over a few of our ground rules about the industry.
First, not every solar company is built to make money for shareholders.
Some of these companies are staying afloat on subsidies or money from venture capitalist dollars which is why it’s so important to do a thorough analysis before jumping in.
While some companies dabble in solar energy or own subsidiaries in the solar power industry, we primarily focus on pure solar stock plays.
Without further ado, let’s take a look at some of the best solar stocks out there right now.
Best Solar Power Stocks
SolarEdge Technologies, Inc. (NASDAQ: SEDG)
SolarEdge Technologies is headquartered in Israel and focuses on inverters, which take solar energy and deliver it to where it’s needed.
This could be in homes, businesses, or wherever else solar power is used.
The company also works with power optimizers and other smart solutions for maximizing the yield from solar panels.
SolarEdge has been able to get a foothold in a cutthroat market by manufacturing optimizers for a lower cost than the competition.
The team is also always looking for innovations to improve output in the solar energy space and has a strong balance sheet to allow for investments as needed.
Of its worldwide business, the United States accounts for approximately 40%.
The United States’ push to become more energy efficient should only help these numbers continue to rise.
SolarEdge came out of the second quarter of 2021 with record revenue numbers and continued improvement in market share.
The stock has seen 2,400% growth over the last five years and is trading very close to its all-time high.
The company looks to continue along this upward trend, making it a good investment opportunity.
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First Solar, Inc. (NASDAQ: FSLR)
First Solar is one of the most prominent solar companies on the market right now.
It manufactures solar panels and offers support and maintenance for solar power operations.
The company was founded in 1990 and has built a very stable client base during its 30+ years in the business.
Its business spans the globe, providing solutions in North America, Europe, Asia, and Australia.
During the 2020 pandemic, First Solar took steps to streamline its operations, resulting in a huge cash balance and the potential for expansion.
Despite the challenges of COVID-19, First Solar performed very well that year.
First Solar had a backlog of orders throughout 2020, and its share price increased dramatically.
After a bit of downward momentum in the first half of 2021, First Solar stock is once again climbing toward record highs.
The company’s financial stability also makes them a very attractive pick.
While they do not currently pay a dividend, its excess cash reserves mean that First Solar could easily offer one in the future.
Brookfield Renewable Partners (NYSE: BEP)
Brookfield Renewable is a major player in the renewable energy space.
The company is a global leader in hydroelectric plants while also working with solar, wind, and energy storage platforms.
As it looks to the future, Brookfield recognizes the potential for solar power and expects this form of energy to soon make up the majority of its production.
Decreasing solar costs are helping to play heavily into this expectation.
Either way, Brookfield has some diversity by being involved with water and wind power generation as well.
The venture is exceeding its revenue goals but has struggled in other areas throughout the first half of 2021.
Its stock price has seen some ups and downs as a result.
Brookfield hopes to turn this around as it embraces more solar technology, but only time will tell.
SunPower Corporation (NASDAQ: SPWR)
SunPower Corporation is all about providing complete solar solutions to both residential and commercial buildings.
The company’s base of operations is in California, but its business spreads across the globe.
In the second quarter of 2021 alone, SunPower grew immensely in the residential sector with 13,000 new homes.
With concerns over electricity bills that continue to increase, this is an indication that more and more families are looking to solar energy for the future.
SunPower is also adjusting its financial service to include loans, making it easier for more households to make the switch.
It also has a partnership with Wallbox, a company that installs solar products into homes.
With the residential solar sector booming, SunPower is looking to focus solely on this market and sell its commercial ventures.
It is also looking to acquire Blue Raven, another solar company, to further expand its footprint.
SunPower’s stocks have seen some growth in the last few months and have experienced a 90% increase in share price from last year.
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Best Solar Stocks To Buy
Enphase Energy, Inc. (NASDAQ: ENPH)
Enphase Energy focuses on home energy solutions and is best known for semiconductor-based microinverters.
These microinverters convert solar power from direct current to alternating current to power a wide range of devices.
Since homes use alternating current, this is a crucial step before solar power can be used.
Products have already sold very well in North America, and now the company is expanding into Europe and Australia.
In addition, Enphase offers entire solar packages to homes and businesses.
The company revealed a nearly 100% increase in revenue in its Q3 earnings report and beat its goal for earnings per share.
As a result of this forward momentum, its share price is currently trading at an all-time high.
If the company can keep up its strong sales volume, its shares have the potential to push even higher.
Sunrun Inc. (NASDAQ: RUN)
Sunrun manufactures, installs, and sells solar energy systems to residential solar energy customers.
The company currently focuses all its attention on the U.S. market but hopes to expand outward in the future.
In the summer of 2020, Sunrun purchased Vivint Solar with an all-stock transaction, creating the largest consumer-facing solar company in the U.S.
Like most other companies on this list, Sunrun saw explosive growth at the end of 2020 as the U.S. looked more toward solar energy.
Its stock price has been down significantly since then but is starting to climb once again.
This drop could be a chance for investors to buy the dip, making Sunrun a stock to keep your eye on if you’re interested in consumer solar.
Canadian Solar (NASDAQ: CSIQ)
Canadian Solar sells large-scale solar panels in 23 different countries on six continents.
With 40% of sales coming from the Americas, 40% from Asia, and 20% from other regions, Canadian Solar is very diverse in operations.
The company started in 2001 with nothing more than a vision and is a multi-billion dollar business today.
Even though its stock price has slightly declined, Canadian Solar is seeing growth.
Its revenue for Q2 2021 alone came in at $1.4 billion, up considerably from last year’s number.
In an effort to reach the top, Canadian Solar is looking to increase its storage capacity by another 6 gigaWatts by the end of this year.
This is a company taking all the right steps to grow, and it seems like it’s only a matter of time until the share price reflects this.
Best Solar Stocks: Conclusion
These are some of the best solar stocks on Wall Street right now.
There is plenty of upside in the sector and plenty of room for growth.
Overall, solar energy only accounts for around 2% of the total grid usage right now.
That number is primed to go up in the near future.
The current political climate in the U.S. also bodes very well for solar companies.
Democrats desire to position the U.S. as a leader in green energy solutions.
We can expect to see solar stocks go up in price even more over the next few years as more residential and commercial properties switch to solar power.
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