Solar stocks have boomed and busted as investors excitedly pile into them only to see their potential pushed further down the road.
Unlike the electric vehicle market, which has finally caught traction, solar companies — and renewable energy companies in general — haven’t yet reached the point where widespread deployment is inevitable.
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However, for patient investors who pick the right stocks, solar may eventually produce sizable investment returns. One near-term caution, however, is that President-elect Trump’s administration could throw some roadblocks in the way of solar energy stock development, making solar panel stocks in general more of a long-term play.
With the green energy future in mind, here are some of the best solar companies to invest in — along with some of the best solar companies in general — and add to your investment portfolio.
Best Solar Stocks of 2024
Here are 10 of the best solar companies to invest in:
- Enphase Energy Inc. (ENPH)
- Sunrun Inc. (RUN)
- First Solar Inc. (FSLR)
- Array Technologies Inc. (ARRY)
- Daqo New Energy Corp. (DQ)
- Hannon Armstrong Sustainable Infrastructure Capital Inc. (HASI)
- SolarEdge Technologies Inc. (SEDG)
- Canadian Solar Inc. (CSIQ)
- Brookfield Renewable Partners L.P.
- JinkoSolar Holding Company Ltd. (JKS)
Solar panel stocks were chosen based on industry position, revenues, future growth prospects and earnings projections and ratings from Wall Street analysts. You should also do your due diligence before buying any stock.
1. Enphase Energy Inc. (ENPH)
Enphase Energy provides a complete home solar solution that includes everything from the generation of solar power to its storage in a single platform. Analysts rate the stock a “hold,” according to MarketBeat, and offer a 12-month price target of $102.09.
The stock has gone through a series of boom and bust years. Although its five-year return of 231.17% trounces the S&P 500’s 88.01% over the same time period, its recent results have been disappointing, returning -75.78% over the past three years and –33.63% over the past year, per Yahoo Finance.
Believers in the long-term future of Enphase, however, may find this to be an attractive entry point.
2. Sunrun Inc. (RUN)
Sunrun is the biggest solar company when it comes to the installation of panels, making it worth a look for those wanting exposure to the space. The company acquired its largest competitor, Vivint, in 2020, further establishing Sunrun as the No. 1 installer. The vast majority of Sunrun customers lease their panels from the company, rather than buy them outright.
This solar panel stock has had a tough go of it. A disappointing third-quarter earnings release has pushed one-year returns to -14.01% and five-year returns to -30.51%. Shares are down 48.88% year to date. Twenty-seven analysts have issued ratings for November, with 17 rating it a “strong buy” or “buy,” and 10 rating it a hold. They expect a return of about 94% over the next 12 months.
3. First Solar Inc. (FSLR)
First Solar is one of the few solar companies that don’t rely on polysilicon for their panels, which helped it avoid some of the supply chain issues that plagued its competitors during and after the pandemic. First Solar uses cadmium-telluride technology, and it mostly produces its panels in the United States, which also means the company can avoid the issues surrounding China.
The stock of First Solar is firing on all cylinders. Up 261.03% over the past five years and 85.52% over the past three years. FSLR is up 11.38% in 2024.
Support among analysts picked up in July, despite the stock’s outperformance and political uncertainties, and has remained steady. The average analyst price target is about 41% above current levels.
4. Array Technologies Inc. (ARRY)
Array Technologies offers investors the chance to make their bet on technology rather than the nitty-gritty of solar panels themselves. The company’s main competitive advantage is its proprietary tracking technology that turns solar panels toward the sun as it moves across the sky, thereby improving the panels’ efficiency.
Although the company beat revenue estimates in its Q1 2024 earnings release, it came up short in terms of net profit. In Q2, net profit grew from -$11.34 million to $11.95 million but dropped to -$155,32 in Q3. The stock has been a perennial underachiever, losing over 63% year to date in 2024 and almost 60% over the past year, bringing its five-year total return to -79.15%. However, analysts are still bullish.
Fifteen of the 27 covering the stock as of November have “strong buy” or “buy” ratings on the company, with an average one-year price target 69% above current levels.
5. Daqo New Energy Corp. (DQ)
Daqo New Energy Corp. offers investors a way to invest in the solar panel supply chain rather than the construction of the panels themselves. Daqo is a Chinese company that actually mines the primary element used in solar panel production, namely polysilicon. It is one of the world’s lowest-cost producers.
After skyrocketing in 2020 and 2021, shares of Daqo New Energy Corp. have fallen back to Earth, dropping over 72% over the past three years, 51% over the past year and more than 40% YTD in 2024. But the nine analysts following the company last month remain mostly bullish, with four issuing “strong buy” ratings and three calling it a “buy.”
The price target is $25.73.
6. Hannon Armstrong Sustainable Infrastructure Capital Inc. (HASI)
Investors looking for a bit of a different angle when it comes to the solar industry might consider Hannon Armstrong. Rather than being a direct play on solar energy equipment or production, Hannon Armstrong is a real estate investment trust that owns various companies in the renewable energy space.
This stock is more of a dividend play, although it also offers the opportunity for capital appreciation.
Hannon Armstrong pays a current yield of 6.10%, and shares are up 4.65% since the start of 2024.
7. SolarEdge Technologies Inc. (SEDG)
Solar storage has long been the bugaboo of the industry. Although solar panel technology continues to advance exponentially, the storage of the energy produced becomes problematic. SolarEdge Technologies is one of the companies working on solving that problem, providing traditional solar services along with battery storage.
Unfortunately, it has been a rocky road for SolarEdge. After trading mostly sideways from 2020 to 2023, the stock has recently fallen off a cliff. In its Q3 2024 earnings report, the company announced significant earnings and revenue losses, signaling what CEO Ronen Faier called a “difficult period in the company’s history.” The stock is now down over 88% in 2024 alone, and more than 86% over the past year. Perhaps to spur faith in the stock, Independent Chairman Avery More recently purchased $1.1 million worth at a roughly $3 premium per share.
Analyst forecasts indicate there could be some sizable capital gains ahead if the company can turn things around. The consensus 12-month price target of the analysts following the stock is $18.51, suggesting a potential one-year gain of over 78%. Those analysts also have a consensus “hold” rating on the company.
8. Canadian Solar Inc. (CSIQ)
Investors looking for exposure north of the border might be interested in Canadian Solar Inc., which creates solar panels for large projects.
The company reported FY2023 revenues of $7.61 billion and net income of $274 million, or $3.87 per share. Analysts have a $19.55 one-year price target on the stock, which is down about 57% YTD in 2024.
9. Brookfield Renewable Partners L.P.
Brookfield Renewable Partners is an investment firm that focuses on renewables, nuclear, battery storage and distributed energy generation to help companies transition to net zero. With over $1 trillion in assets under management spread across more than 2,000 investments globally, Brookfield represents both individual and institutional investors.
In addition to producing solid gains over one and five years, Brookfield has a $1.42 dividend currently yielding 5.70%. Most analysts are bullish, with over half of the 17 who watch the stuck rating it a “strong buy” or “buy.” The 12-month price target is $30.86, about 23% above current levels.
10. JinkoSolar Holding Company Ltd. (JKS)
JinkoSolar Holding, based in China, is the largest solar company in the world by revenue, pulling in more than $104 billion over the past year. It has a U.S. division that manufactures and distributes solar products domestically, and it also trades on the New York Stock Exchange, making it easily accessible for American investors.
As of November, seven analysts have ratings on the stock, and two of them rate it a “buy.” Although the consensus price target is about 46% above current levels, the dual headwinds that solar and Chinese stocks could face during Trump’s second term make the near-term outlook cloudy on JinkoSolar Holding.
Risks and Challenges of Investing In Solar Stocks
There are many levels of risk involved in solar stock investing. In addition to general market volatility, solar stocks don’t generally have a predictable earnings stream. In fact, many solar panel stocks and companies still aren’t even profitable. There are also geopolitical risks, particularly in an election year in which a change in party could potentially alter legislative support.
The field is also getting fairly crowded, with many companies hoping to strike gold in the new era of “green energy.” Add in the fact that this industry tends to attract “hot money,” or investors who rapidly invest in or pull away from the stocks, and it adds up to a volatile cocktail.
Just like with any other type of investment, finding the best solar companies to invest in can be tricky. Do your research before putting your money on your pick for the best solar panel stocks.
How To Get Started Investing In Solar Stocks
Research is paramount when it comes to picking the top solar companies to invest in. In addition to doing your own, consider sitting down with a financial advisor so you fully understand the risks involved in investing your best solar companies picks. Experts in the field may also be able to point you toward the more likely winners in the industry.
Beyond that, the specifics of investing in solar stocks are the same as investing in any other type of stock. Once you’ve chosen where you want to put your money, either talk to a financial advisor to enter a trade on your behalf or use your brokerage firm’s online portal to do it yourself.
As solar investing can be particularly volatile, you might consider buying an array of individual stocks or perhaps a mutual fund or ETF, to help diversify your risk.
Final Take
The solar energy sector likely still has a long runway before it reaches mass adoption, but that could make it a good opportunity for investors with the patience and risk tolerance to wait for the best solar companies to surface.
Just remember that the upcoming change in the White House could pose additional short-term risks for the industry as a whole.
Daria Uhlig contributed to the reporting for this article.
Data is accurate as of Nov. 21, 2024, and was sourced using Yahoo Finance and Google Finance.
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This article originally appeared on GOBankingRates.com: 10 Best Solar Stocks To Invest In Today
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