The US is the second-largest energy consumer in the world, right after China. The current POTUS, Joe Biden, is committed to turning his country into an emissions-free nation by spearheading the switch to renewable energy. As a matter of fact, he tabled a bill before Congress seeking to extend tax credits and make direct investments into green energy companies. This is all in a bid to turn the US towards 100% carbon-free energy by 2035.
If this bill passes into law, the solar industry will see explosive growth in the coming years, especially seeing as its demand extends beyond the US. To that end, here are the top companies whose stocks show the most potential of recording impressive gains.
This is a firm that specializes in the design and production of sophisticated solar modules. First Solar distinguishes itself from the competition by producing a cutting-edge thin-film solar module. This customized device outperforms the usual silicon variants now flooding the market in challenging situations such as poor light and cold weather. The size of these thin-film versions is also greater, lowering the cost per watt.
This company has also made itself a reputation of regularly having more cash than debt. This means it can continue developing and producing these advanced solar modules for its customers. As their demand grows, so will the value of First Solar’s stock.
This is a company that generates renewable energy, which it then sells to consumers under long-term purchase agreements. This allows it to have steady cash flow all year round, which enables it to pay out handsome dividends to its shareholders. The energy it produces comes from its various hydroelectric power plants, onshore and offshore wind plants, as well as numerous solar plants.
Be that as it may, the company estimates that by 2030, the majority of its energy will be sourced from its solar plants. This is following the continuing strides being made in the solar industry to make this energy production cheaper. By this estimate, their cash flow per share is expected to grow by 11-16% every year till 2025. This translates to a 5-9% annual increase in their already handsome yearly dividends.
This company makes power optimizers and inverters, which are used to convert the DC energy obtained from the sun into AC energy present in national power grids. These optimizers stand out from the competition in that they are much cheaper and feature improved efficiency.
In today’s world, solar manufacturers are mostly concerned with reducing costs, which makes SolarEdge inverters and optimizers a favorite among most of them. This firm is also acquiring new equipment for use in energy storage and management, such as smart modules that help increase its revenue per unit it installs. It also boasts a cash-rich balance sheet which enables it to expand its production capacity and maintain the technological edge over its competition.
SolarEdge is also venturing into electric vehicle charging, batteries for energy storage, uninterruptible power supply (UPS) systems, and grid services solutions. This will see it expand its reach in the green energy field, which will translate to increased revenue and a rise in stock prices.
This is a company that manufactures solar wafers and modules. It consists of several segments, such as the manufacture of solar wafers, both monocrystalline and multi-crystalline, as well as solar photovoltaic cells and modules.
ReneSola are also concerned with developing several solar projects, some of which it sells and others it owns and manages, selling the generated electricity instead. The company also runs several small-scale distributed generation projects and community solar gardens. These span several countries like China, the US, Canada, the UK, and France.
This is a US-based company that deals in the installation, maintenance, and monitoring of solar energy systems. They offer personalized home solar system designs, and their clients can either lease or purchase these systems with monthly payments. The state of California had previously unveiled a plan to change the way rooftop solar users are compensated for selling their power to the national grid. This caused Sunrun stock prices to drop. However, these plans were recently halted, which means Sunrun stock is expected to rise again in the near future. This presents investors with a unique buying opportunity.
JinkoSolar Holding Company LTD
This is a Chinese company primarily concerned with the manufacture of solar panels. The firm has managed to create a reputation for its strong emphasis on research and rigorously testing its panels for performance, quality, and durability. Though their panels guarantee top-notch performance by global standards, they are mid-range in price. This makes them a cost-effective favorite among clients looking for high-performance solar systems. What’s more, JinkoSolar stock is currently grossly undervalued, which presents an ideal buying opportunity.
Previously concerned with the production and installation of solar systems, SunPower spun off from most of its production activities to focus on the sale, financing, and installation of solar panels. What’s more, the company sold off its industrial and commercial solutions operations to TotalEnergies. Today, they are only concerned with providing residential solar energy solutions. They also provide loans to Americans who intend to install solar systems in their homes. The demand for residential solar power has presented them with their largest sales backlog since the company’s inception.
Maxeon Solar Technologies
This is the company to which SunPower spun off its production activities. Maxeon now designs, produces, and sells solar panels across several countries worldwide. In the 3rd quarter of 2021, the company won its first major contract in India and added 400 MW to its US projects. By September of the same year, it had inspired institutional interest to the tune of 9 hedge funds going bullish on MAXN stock. As the demand for solar energy grows in the coming years, the company is expected to stage continuous revenue growth and, consequently, rising stock prices.
As the US and several other countries switch to green energy for all their power needs, the demand for solar energy is only expected to rise over the coming years. For that reason, companies involved in the production of solar panels, their installation as well as financing services are poised to stage an increase in their share prices in the near future. This includes even those companies providing innovative industry solutions in the solar energy space.