While energy has always been a vital geopolitical issue, the current conflict has all investors searching for the best solar stocks to buy.
Tied to the broader renewable energy sector, the solar industry is fundamentally attractive, converting free and available sunlight into usable energy.
Europe has acceleration of efforts to set up renewable energy infrastructures. The United States also has its eye on infrastructure, particularly with the deployment of electric vehicles. By powering cars with renewable energy, the United States and its allies could reduce foreign energy dependence.
Publicly listed solar companies have proven to be volatile and this year has been no different. Nevertheless, ultimately, diversification of energy infrastructure and resource channels will likely be the ultimate goal. Remember to consider the long term when looking for solar stocks to buy.
|DQ||Daqo New Energy||$64.01|
First Solar (FSLR)
One of the most popular names in solar stocks to buy, First Solar (NASDAQ:FSLR) mainly provides solar panels and photovoltaic power plants.
In addition, it offers construction and maintenance services, as well as recycling processes for solar-related equipment. First Solar sets itself apart from the competition with its ultra-thin semiconductor technology, enabling increased efficiency and resilience for its modules.
Initially, the company experienced strong growth after Russia’s attack on Ukraine. However, since early April, FSLR stocks have admittedly faced significant headwinds. A disappointing impression for its first-quarter 2022 results didn’t help. Revenue was down 54% year over year.
Yet, with a current market capitalization of nearly $8 billion, FSLR is also one of the biggest solar stocks to buy. Down more than 18% from the start of the year, investors with patient outlooks might consider adding First Solar to their portfolios.
Canadian Solar (CSIQ)
Canadian Solar (NASDAQ:CSIQ) focuses on the design, manufacture and distribution of modules for residential, commercial and industrial customers.
In addition to modules, Canadian Solar offers inverters and system kits. According to its website, the company has subsidiaries in 23 countries and regions on six continents, as well as 20 manufacturing plants in Asia and the Americas.
Benefiting in part from renewed interest in renewable energy solutions, Canadian Solar reported revenue of $1.25 billion in the first quarter of this year, up nearly 15% from to the $1.09 billion in sales recorded in the prior year quarter.
The CSIQ is up 12% since the start of the year. The Nasdaq The index is down more than 24% over the same period, which makes Canadian Solar intriguing on a relative level.
SolarEdge Technologies (SEDG)
SolarEdge Technologies (NASDAQ:SEDG) manufactures and distributes equipment and technologies for photovoltaic panels (several solar panels wired together). SolarEdge provides optimization services for these systems, as well as monitoring solutions.
Benefiting from substantial demand thanks to an increased focus on renewable energy infrastructure, SolarEdge brought the goods back in the first quarter of 2022, recording sales of $655 million.
That tally was up nearly 62% from the year-ago quarter result of $405 million. Additionally, the company posted net income of $33 million last quarter, up 10% year-over-year.
SEDG has been choppy this year, but is trading up nearly 9% year-to-date. It could be one of the best solar stocks to buy due to renewed interest in its services.
Enphase Energy (ENPH)
A global energy management technology company, Enphase Energy (NASDAQ:ENPH) intrigue for its battery storage solutions.
Thanks to its Enphase IQ batteries, residences equipped with solar panels can enjoy electricity despite grid disturbances.
This system can also provide power even in harsh weather conditions like rain, sleet, snow and ice.
This story will likely be relevant, with a recent Bloomberg report noting that California energy officials have warned against the risk of outages for the next three summers due to power outages. Additionally, the large-scale impact of climate change has resulted in unusual weather patterns around the world, requiring greater attention to energy resilience systems.
Unsurprisingly, Enphase posted a strong performance in the first quarter of 2022, recording sales of $441 million. This represents a growth of 46% year over year. Currently, the ENPH is up 13% year-to-date.
A China-based company that focuses on the production of solar cells, modules and other industry-related materials, JinkoSolar (NYSE:JKS) may initially arouse skepticism.
After all, China’s economy hasn’t exactly been a bastion of confidence following government-imposed lockdowns that have prompted serious mitigation efforts.
Still, the broader headwinds that are causing many to question China-based investments have not dampened enthusiasm for JKS. In fact, it’s one of the best performing solar stocks to buy, gaining more than 44% year-to-date.
Part of the optimism has to do with the massive footprint of the underlying company, which serves customers in the United States, Europe and the Middle East, as well as its home market.
But the main catalyst for JKS’ decision is the outstanding performance of JinkoSolar in the first quarter of 2022. Its revenue of $2.3 billion was almost double the total sales of $1.22 billion during the quarter of the previous year. With momentum on its side, JKS is one of the best solar stocks to buy.
Daqo New Energy (DQ)
Another solar company based in China, Daqo New Energy (NYSE:DQ) manufactures monocrystalline silicon and polysilicon, primarily for use in solar photovoltaic systems.
Although investing in the world’s second largest economy seems difficult, DQ is one of the most attractive solar stocks to buy over the long term.
Much of the optimism has to do with geopolitics.
At the start of the Ukraine crisis, many international policy pundits feared that Russia was recruiting China’s help, militarily or otherwise. However, Reuters reported that China did not provide strong support that the Kremlin was looking for. Apparently, Beijing is trying to play a balancing act, not wanting to ruin economic relations with the West.
Daqo is one of the best performing solar stocks to buy, with DQ gaining 52% year-to-date. While even China seems to be moving away from Russian-sourced hydrocarbons, DQ is an interesting name to add to your portfolio.
Sun Power (SPWR)
Sun Power (NASDAQ:SPWR) sells, installs and finances solar energy products, such as panels, batteries, mounting hardware and monitoring software.
More recently, furniture retailer Ikea and SunPower announced a collaboration that facilitate access to solar energy. This program has the potential to reduce energy costs while improving overall sustainability.
Financially, SunPower is a work in progress. In the first quarter of 2022, the company reported revenue of $350 million, up 46% from $240 million in sales a year earlier. However, SunPower also posted a net loss of $28 million in the first quarter of 2022, although this was an improvement from a loss of $48 million a year ago.
So far the market has been thoughtful on SPWR, where it is down more than 10% so far this year. Still, there is evidence to suggest that SunPower shares are steadily recovering, which could make it one of the solar stocks to buy.
As of the date of publication, Josh Enomoto had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.