Best Solar Energy Stocks List: Top 5 to Invest in This Year
Solar stocks are back as President Biden says he will lift tariffs on solar imports. In fact, solar power companies were already rallying after hitting a 52-week low in May. To make it easy for you I’ve put together the best solar energy stocks list to invest in this year for growth.
The new suspension will last two years. Moreover, it allows solar cells from certain nations to be imported tax-free. That said, the policy will reduce costs to boost the industry.
With gas and oil prices nearing record highs, renewable energy is more important than ever. Solar energy is the fastest-growing source of new energy in the U.S., with a growing market share. Yet the industry is slowing with rising interest rates and supply challenges.
In fact, solar capacity expects to account for over half of the new energy capacity in ’22 and ’23. But recent supply issues have crippled the industry’s ability to speed up the pace.
The new policies can get the solar industry back on track. Here is my top energy stocks list to capture the growth.
Top Solar Energy Stocks List for Growth
New solar projects in the U.S. have slowed this year. In part, the slowdown is due to delayed parts. According to a recent study, 83% of solar companies report canceled or delayed supply.
The new policy should help ease the issue while getting the market back on its feet. That said, demand for solar is soaring. With many climate goals in place, clean energy solutions are coming into focus.
Solar energy stocks look to enjoy the demand boom. To find the best companies to include on the top solar energy stocks list, I’m looking for specific factors. These include…
- Revenue Growth
- Profitability
- Fundamentals
Furthermore, I will be considering the company’s market positioning and product potential. The companies below are leading the solar market to new heights. At the same time, they are allowing investors to capture a piece of the growth. Without delay, here is the top solar energy stocks list for portfolio growth in 2022.
No. 5 Generac Holdings (NYSE: GNRC)
- Revenue Growth: 41%
- Price vs. Year High: -45%
Generac Holdings is a leading energy generation solutions company. Although Generac is not a pure-play solar stock, the company is moving aggressively towards clean energy.
For example, in 2019, Generac started offering solar energy storage solutions. Since then, the company has expanded its clean energy offerings. The company currently sells solar panels, batteries, and storage devices.
Meanwhile, energy demand is skyrocketing. Generac is taking advantage of its positioning to expand into clean energy. Lastly, the company is releasing a new EV charging solution to meet the growing EV demand.
No. 4 SunPower (Nasdaq: SPWR)
- Revenue Growth: 46%
- Price vs. Year High: -44%
SunPower makes all-in-one solar energy solutions for residential and businesses. But the company uses state-of-the-art tech they believe is most energy efficient.
Moreover, the company is moving to a full-scale solar energy system. For instance, they plan to expand into residential EV charging and smart home power by 2024.
The company is quickly expanding its market. SunPower recorded a record customer backlog in the first quarter.despite the solar industry’s challenges, backlog grew 169% YOY. Yet higher costs are cutting into margins.
For this reason, SunPower is more expensive than others on this solar energy stocks list. SunPower stock has a forward P/E over 57. Despite this, SunPower is targeting 2X market growth by 2025.
No. 3 Sunrun (Nasdaq: RUN)
- Revenue Growth: 48%
- Price vs. Year High: -53%
Sunrun is another solar energy solution firm with over 600,000 customers. The company does business in 22 states offering affordable energy solutions.
After buying Vivint Solar, Sunrun is the No. 1 residential solar leader in the U.S. The company is seeing strong demand, with customer orders rising 39% from last year. With this in mind, the company does not see demand slowing anytime soon. In fact, Sunrun sees 25% growth in solar energy installations.
Sunrun’s dominant market position in the U.S. should help carry the company this year. Keep reading to discover the best companies on this solar energy stocks list for growth.
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Why These Companies Top the Best Solar Energy Stocks List
Solar energy stocks led the market for several years as investors geared up for incoming President Biden to boost the industry.
After gaining almost 600% during the pandemic, the Invesco Solar ETF (TAN) is down nearly 40% from its ATHs. With this in mind, the companies on this solar energy stocks list are expecting significant demand this year.
For one thing, the suspension will improve costs. As a result, solar companies will have more money to spend on increasing capacity.
At the same time, it will help drive down solar costs, promoting more use. The solar industry has a massive ahead opportunity as companies look to meet their climate goals.
For example, the U.S. has a goal that by 2025, 100% of energy consumers will be able to pick from solar options. To hit that goal, solar capacity will need to grow rapidly. And the companies topping this solar energy stocks list are ready to take advantage.
