Solar energy is one of the most valuable forms of renewable energy. The inexhaustible source of energy is used by solar companies to generate electricity and heat. After seeing the harmful effects of non-environment friendly forms of energy generation, the world is shifting towards the likes of solar energy for their energy needs.
Therefore, the demand for solar companies and solar stocks is at a rise. The solar sector and solar stocks have been one of the most well-performing ones in 2019. And, the demand is not here to stop! The prices of solar stocks have reported whopping gains, and the strong demand is expected to continue.
Ticker | Company Name | Last Price | 1-Year Return | Market Cap |
|---|---|---|---|---|
| ORA | Ormat Technologies, Inc. | $59.94 | -30.90% | 3.6B |
| FSLR | First Solar Inc | $173.08 | -20.93% | 18.5B |
| SEDG | Solaredge Technologies Inc | $59.52 | -81.11% | 3.4B |
| ENPH | Enphase Energy Inc | $110.47 | -50.88% | 15.0B |
| BEP | Brookfield Renewable Partners LP | $20.01 | -35.82% | 8.1B |
| SPWR | SunPower Corporation | $2.31 | -84.26% | 407.1M |
| CSIQ | Canadian Solar Inc | $15.27 | -62.53% | 989.1M |
| JKS | JinkoSolar Holding Co., Ltd | $22.51 | -55.39% | 1.2B |
| RUN | Sunrun Inc | $10.33 | -49.76% | 2.3B |
| NEP | Nextera Energy Partners LP | $27.00 | -56.25% | 2.5B |
| BEP.UN | #N/A | #N/A | #N/A | #N/A |
About the Solar Industry
The global solar industry is booming and is estimated to be worth over $422 billion by 2026. According to the International Energy Agency, solar power is the fastest-growing source of renewable energy, accounting for over 60% of new renewable energy capacity added in 2020.
In 2020, the solar industry added a record 121 gigawatts of capacity, a 40% increase over 2019. That record is expected to be broken again in 2021, with an estimated addition of 126 gigawatts. This growth is expected to come from both large-scale and distributed solar installations.
There are a variety of types of companies in the solar industry. These include manufacturers of solar panels, inverters, and other components; installers of solar systems; companies that develop solar projects; and companies that finance and invest in solar projects.
These companies are helping to drive the rapid growth of the solar industry. But the industry faces several challenges, including the high cost of solar systems, the difficulty of securing financing, and the need for better storage solutions.
Overall, the solar industry is in a period of unprecedented growth and is well-positioned to continue its expansion in the coming years.
Examples of Solar Stocks
Check the table above for a full list of solar stocks. Below are a few examples of bigger companies and what they do.
First Solar (FSLR) is a leading provider of comprehensive PV solar energy solutions and services. Since its founding in 1999, First Solar has grown to become one of the largest solar energy companies in the world, with operations in more than a dozen countries. It designs, manufactures, and sells PV solar panels, modules, and systems for both residential and commercial applications. The company also provides power plant development, engineering, procurement, and construction services. In terms of financial performance, First Solar has consistently reported strong quarterly results, with revenue and earnings beating analyst estimates in the past few quarters.
SunPower (SPWR) is another one of the best solar stocks. SunPower designs, manufactures, and sells PV solar panels and systems for both residential and commercial applications. The company has a strong presence in the U.S. and Europe and is expanding its presence in Asia. SunPower has also been an innovator in the solar industry, developing advanced technology for its panels and systems. In terms of financial performance, SunPower has had mixed results in the past few quarters, but its revenue and earnings have been increasing steadily.
Enphase Energy (ENPH) is a leading provider of microinverter and energy management solutions for residential and commercial solar systems. The company’s products aim to increase energy efficiency and reduce energy costs. Enphase has had strong financial performance in the past year, with revenue and earnings increasing significantly.
Factors to Consider Before Investing in Solar Stocks
Solar stocks offer an excellent opportunity for investors with a long-term horizon. The solar companies are implementing better technology to increase production and efficiency and to reduce costs.
At the same time, investors must also reflect on the volatility associated with solar stocks. The exceptionally-high valuations of solar stocks give way to anxiety among investors and may lead to a sharp drop in prices.
Additionally, solar stocks are negatively correlated to the oil and energy stocks. When the oil and energy prices go down, consumers tend to buy less of solar energy leading to underperformance in solar stocks.
Which Solar Stocks Should I Buy?
The selection of solar stocks to buy depends on the risk appetite and time horizon of investors. To make it easy for you, we have consolidated a list of the solar stocks to choose from.
Solar stocks hold strong potential for future growth. Many solar stocks are expensive at the time, but the recent drop in their prices offer a great opportunity for investors looking for long-term capital gains.
Despite the high volatility and correlation with the oil and energy stocks and ETFs, solar stocks demonstrate an attractive valuation.
