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In 2020, clean energy demand proved resilient as renewables and storage recorded declining costs and rising capacity and usage factors. Other analysis indicate this trend will continue in 2020
As solar photovoltaic technology continues to grow in popularity, with a progressive U.S administration and Canadian government focused on climate change, investors are turning to solar stocks for portfolio diversification and revenue growth. There is the ESG angle too, but that’s a different story.
The attention and investor interest, increase funding required to inject more resources into R&D and capacity deployment. As a result, there are 3 hot stock options on the market right now—which is what we’ll be looking at in this article.
1. First Solar: FSLR (NASDAQ)
First Solar is an American manufacturer of solar panels that offers utility-scale PV power plants and supporting services, including finance, construction, and end-of-life panel recycling.
The company utilizes proprietary thin-film technology to boost panel efficiency and, as such, has become a robust industry player. At the time of writing, First Solar’s stock is worth USD $83.49 (7/18/2021). The company’s products have entirely sold out in 2021 and are more than 70% sold out for 2022, demonstrating a level of market confidence seldom witnessed in the solar industry.
One of the catalysts for First Solar’s strong market performance has been the continuation of Trump-era tariffs on imported solar by the Biden administration. This has provided domestic manufacturers in the United States a significant competitive edge over international players, specifically those producing cheap PV models in China.
2. Generac: GNRC (NYSE)
Generac (GNRC), a fortune 1000 American manufacturer of backup power generators and energy storage technologies, is another company that has seen great success as of late, with company stock doubling throughout 2021.
While increasingly unstable electrical grids have boosted Generac’s market prospects, the most significant opportunity for the company lies in energy storage, a critical component towards making green energy — known for its intermittency — reliable enough to power the world’s economic activities. The company recently announced its entrance into the solar inverter marketplace. This could be a defining move for the company.
Generac’s stock currently trades for USD $430.34 (7/18/2021), making it the most expensive opportunity on this list. That is not to say that this stock is not worth picking up; if you can afford it, that is. There is plenty of evidence suggesting that Generac hasn’t even come close to reaching its stock ceiling yet, such as its stellar management record.
3. Enphase Energy: ENPH (NASDAQ)
Enphase Energy, a home energy storage company with a focus on microinverters, is the final stock option we’ll take a look at today.
Solar panels produce direct current (DC) electricity which needs to be converted into alternate current (AC) electricity through an inverter to be utilized by homeowners. This process can be accomplished in many ways, such as having one large inverter connected to an array of solar panels.
Increasingly, however, solar professionals prefer microinverters, which enable each solar panel to become a self-contained electrical system. In addition, decentralizing solar inverters helps ensure reliability in electricity production, as technical problems that arise are contained within singular units. At the time of writing, Enphase is trading at USD $163.45 (7/18/2021), almost tripling since July of 2020.
Moving forward, companies like Enphase Energy are primed to take advantage of this ongoing solar industry adaptation.
There’s never been a better time to pick up stock in the solar industry, thanks to the public’s growing support of climate action and a series of industry breakthroughs in recent years. The resiliency and strength of solar stocks is evidence that green energy is quickly becoming mainstream, a feat worthy of celebration.
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