Solar stocks had a year 2020 in reverse. Much like marijuana stocks, President Joe Biden’s victory was a tailwind for the industry. However, they started to lose strength earlier this year. Now, however, clean energy stocks are rising again as Congress considers expanding tax breaks for wind and solar power.
Separately, Senator Jon Ossoff also recently introduced legislation to establish a tax credit for domestic solar power manufacturers. Ossoff is hoping that will pass as part of a larger infrastructure package later this year. The bill – who grant tax credits for US manufacturers at every stage of solar manufacturing – aims to accelerate solar power production and close the gap between US and foreign competitors.
In addition, solar energy is becoming cheaper and cheaper with each passing day. The technology is improving more and more, becoming a viable alternative to fossil fuels. It’s no secret how fast the switch to clean energy will occur, but it’s no surprise to see a rise in these stocks.
- Enphase Energy (NASDAQ:ENPH)
- Sunrun (NASDAQ:CLASSES)
- SolarEdge (NASDAQ:SEDG)
- Brookfield Renewable Energy Partners (NYSE:BEP)
- Invesco Solar ETF (NYSEARCA:BRONZER)
- Canadian solar (NASDAQ:CSIQ)
- NextEra Energy (NYSE:BORN)
Solar shares to buy: Enphase Energy (ENPH)
First on this list of solar inventories, Enphase Energy provides energy management for homes. Their “software-controlled” solutions include solar power generation, energy storage, and web-based monitoring and control.
Most of the products of this name focus on solar energy. Based in California, the company manufactures the software necessary to control and monitor residential panel systems. Over the years, Enphase has been able to capitalize on the growing demand for clean energy, generating five-year average revenue growth of about 23% as it reduces its operating loss.
Although the bulk of Enphase’s revenue comes from the United States, the company is also expanding globally and markets its products in different markets. The ENPH share clearly outperformed S&P 500 and its sector. The bears can certainly argue that this stock is trading a little too hot right now. However, with recent legislative changes, ENPH still has a lot to offer.
Sunrun, headquartered in San Francisco, manufactures residential solar panels and household batteries. The company offers solar services through leases and power purchase contracts. As a result, Sunrun customers tend to have a long association with the company. Situated at more than 175 cities in 22 states and Puerto Rico, Sunrun produces “more than three gigawatts solar energy ”worldwide and serves more than 550,000 customers.
Several bullish catalysts will help push the RUN share up. These include favorable measures from Biden’s administration policy, the potential to refinance existing systems on a large scale, and the ability to sell additional services to its growing customer base. Over the past year, Sunrun’s sales have grown despite a loss in earnings per share (EPS). For the first quarter of 2021, revenue increased 59% year-on-year to reach $ 334.8 million.
Sunrun has suffered greatly from the pandemic. Incomes plummeted as people suspended shopping and waited for the economy to improve. With the health of the global investment landscape improving, Sunrun is now one of the solar stocks best positioned to benefit.
Solar shares to buy: SolarEdge (SEDG)
Next on this list of solar stocks is SEDG stock. Based in Israel, SolarEdge manufactures and installs solar inverters and other similar solutions for residential and commercial customers in Europe and the United States.
This business is actually essential to the solar industry. Why? This makes it crucial inverter and optimizer technology which helps solar panels to perform optimally. SEDG also invests capital in energy storage, electric vehicle (EV) charging and grid power solutions. Finally, SolarEdge also supplies electric powertrains and batteries. Recently, SEDG announced that it had been selected as supplier fully electric batteries and powertrains for the future Fiat E-Ducato (Fiat belongs to Stellantis (NYSE:STLA)).
Over the past five years, SolarEdge revenues have jumped to an average of almost 39%. Of course, the past year has been a disappointment for the company, as revenues have remained relatively stable due to the pandemic. However, with the return to normal this year, SolarEdge should do very well as solar stocks accelerate.
Brookfield Renewable Partners (BEP)
Toronto-based Brookfield Renewable Partners is 60% owned by Brookfield Asset Management (NYSE:BAM), an alternative asset manager with more than $ 600 billion in assets under management. Overall, the company operates several renewable energy facilities in North America, South America, Europe, India and China and generates electricity through wind, solar and other energy. renewable sources.
Although the Company has a reasonably diversified business, its hydroelectric power business constitutes approximately 62% of its portfolio. Overall, BEP manages a tight ship.
Brookfield currently has 12-month rolling (TTM) revenue of $ 3.78 billion. The first quarter also continued its upward trend. In the first quarter, BEP generated operating funds (FFO) of $ 242 million (or $ 0.38 per unit) – a 21% year-over-year increase. In addition, the company has signed “29 agreements for approximately 2,300 GWh of renewable energy production” and added nearly 4,500 megawatts to its development pipeline.
In February, when the winter storm in Texas devastated regional energy infrastructure, there was talk of a negative impact on BEP stock. Fortunately, however, this did not have a significant effect on the company’s bottom line. Nevertheless, the crisis made the title shine somewhat. BEP stock has only risen 0.13% in the past three months, making it one of the most undervalued solar stocks to buy right now.
Solar shares to buy: Invesco Solar ETF (TAN)
The next name on this list of solar stocks to buy is actually an exchange-traded fund (ETF).
Invesco Solar is one of Wall Street’s most popular solar funds. The beauty of buying this ETF is that you are buying the entire basket of solar stocks. This can save you from having to research all the major solar companies out there.
Today, the TAN share represents approximately $ 3.42 billion in assets under management according to In search of the alpha. The ETF also monitors MAC Global Solar Energy Index and is one of the oldest solar ETFs, making it the barometer of this group. Currently it has an expense ratio of 0.69% and a 9.31% ROE.
Right now, TAN stock is trading at around $ 85. Ultimately, you hedge your bets when you invest in this one. As the industry goes up, so does the fund.
Canadian Solar (CSIQ)
Canadian Solar is the next solar stock pick on this list. The company manufactures photovoltaic (PV) solar modules and also manages large-scale solar projects.
Recently, CSIQ has faced some headaches due to supply chain issues associated with increased demand for solar power. Investor place contributor Ian Bezek has already touched on this topic and the next steps being considered by Canadian Solar.
There is a silver lining, however. Currently, CSIQ stock is down 2% in the past three months. Now this makes the perfect opportunity to stock up on a name with excellent fundamentals. Yahoo! Finance estimates revenue growth of 69.7% and 10.3% for fiscal years 2021 and 2022, respectively.
This should also translate into good market developments for the share.
Solar shares to buy: NextEra Energy (NEE)
Last on this list of solar values, NextEra Energy is the largest electric utility holding company by market capitalization. NEE is a holding company of Florida Power & Light, Gulf Power and NextEra Energy Resources and others. Through its subsidiaries and various units, NEE produces renewable energy from wind and solar energy. However, the company also has significant natural gas, energy storage and other assets. Additionally, it is geographically diverse across the continental United States.
While NextEra has had a tough 2020, things are looking up this year. On July 23, the energy company reported a quarterly adjusted earnings which exceeded forecasts. Part of the reason for this is increased investment in new electrical infrastructure by its Florida utilities and energy development arm.
Currently, NEE shares have only risen 1.54% in the past three months. Like CSIQ at the time, now is a perfect opportunity to buy the stock at a discount as it continues to rise. In addition, the company has a diverse portfolio. So you can rest assured that no single business segment will have a huge impact on the entire business.
At the date of publication, Faizan Farooque did not hold (directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the publication guidelines of InvestorPlace.com.
Faizan Farooque is a contributing author of InvestorPlace.com and many other financial sites. Faizan has several years of stock market analysis experience and was a former data reporter at S&P Global Market Intelligence. His passion is helping the average investor make more informed decisions about their portfolio. Faizan does not directly own the securities mentioned above.