Solar stocks are growing in dominance with the rising global demand for renewable sources of energy. The overall energy demand has skyrocketed since the opening of industries following the pandemic. This might be the right time to put your stake in the best solar stocks that could fire up your portfolio this year.
Companies are working together to help transition the global economy away from fossil fuels toward renewable energy sources. Solar energy remains a top source in the renewable energy sector. It will take trillions of dollars and many years to complete this conversion. That makes solar energy a compelling opportunity for long-term investors.
Sunrun (RUN)
Sunrun is a growing solar company and with the rising solar demand, the company can scale its business in the coming years. Earlier this month, Californians debated a controversial plan for reorganizing the way rooftop solar customers are compensated.
Solar panels and batteries are available for lease or purchase from Sunrun. Its stock has been impacted. California, however, has put on hold its proposed changes ahead of time, potentially giving shares a breather. With the indefinite delay in the changes, this is a great opportunity to buy RUN stock.
In 2021, Sunrun delivered record volumes despite the labor shortages and higher fulfillment costs due to pandemic and supply chain shortages. The company added more than 110,000 customers last year, representing a 31% growth in new installations. On top of that, Sunrun added two large companies together and navigated a dynamic operating environment during COVID.
If things were better, the company would have reported better results. Customer orders and demand remains strong as evidenced by a 57% growth in backlog year-over-year. Sunrun expects to capture the current demand in 2022.
Looking into the strong prospects of the company and future demand, RUN is the best solar stock to buy now.
ReneSola (SOL)
ReneSola manufactures solar wafers and modules. The company has several segments, including wafer, cell, module, and solar power projects. Notably, ReneSola has completed 850 megawatts of projects and had 173 MW of projects in operation as of Sep 30, 2021. At the end of the third quarter of 2021, the company had its late-stage state pipeline of 1.8 gigawatts in progress.
During the latest quarter, the company made a gross profit of $6.1 million, yielding a gross margin of 39.2%. While the net income attributed to SOL shareholders was $0.7 million. The company is well profitable with a solid balance sheet and cash in hand. It had $275.8 million in cash and cash equivalents in the account.
In the upcoming quarter, ReneSola is expected to report improvement in the results. The company has been investing in Spain. It has a well-developed market there with experienced international players. ReneSola has the best yield in Europe with projects over 1750 Megawatts per year.
The company has also set a strong base in the UK in the last five years. Overall, ReneSola has successfully developed 16 portfolios, operated 4.3 MW projects, and sold 127MW projects in the UK. On top of that, the company has cooperated with strong market players to develop a 200MW pipeline in the region.
SOL is spreading its footprint across the globe. The company holds a major potential to capture massive markets and it is already making way into them. Therefore, SOL stock looks like a promising buy among the best solar stocks.
JinkoSolar Holding (JKS)
JinkoSolar Holding is a Chinese company that is currently the world’s largest solar panel manufacturer. The company serves the residential, industrial, and commercial utility sectors across some of the biggest economies in the world. That makes it a top-ranking solar company worldwide. Therefore, there is no hesitation about JKS stock.
The company posted decent third-quarter results, surpassing the earnings per share. JinkoSolar posted an EPS of $0.05, exceeding estimates by $0.03. While the revenue came in at $1.33 billion, missing estimates by $62.37 million.
The big news for JinkoSolar shareholders was its listing on the Shanghai Stock Exchange. The company has issued 2 billion shares at $0.79, for a total of $1.58 billion. But after the first day of trading shares had jumped 111%, causing an increase in JinkoSolar Holding in the last month. However, the company has massive potential as we see things in the long term and it is worth considering while looking at the best solar stocks to invest.
Apart from that, Jinko’s major development recently has been its principal operating subsidiary, Jinko Solar, reinforcing its partnership for 2022 with Aldo Solar. Aldo is the largest distributor of solar energy solutions in Brazil. That’s a major deal for JinkoSolar where the company will distribute 2 gigawatts modules of installed power outside of China.
JKS stock has a sector outperform rating from CIBC with a price target of $66.10.
SolarEdge Technologies (SEDG)
SolarEdge Technologies is certainly one of the big players in solar space. The company manufactures power optimizers and inverters, which are used to convert the sun’s energy into usable electricity. These components have improved the way solar panels work. They convert DC power produced by the sun into the AC electricity used by the electrical grid.
SolarEdge’s power optimizers minimize your cost. For instance, the company uses a microinverter built with minimal efficiency loss. The company’s focus on manufacturing low-cost power optimizers has enabled it to win market share from competitors as solar project developers emphasize cost. That’s a big reason why it is such a big name in the market today.
Moreover, SolarEdge has also invested money to acquire and develop new products in the energy storage and energy management spaces. It is also working on smart modules to help increase its average revenue per installation.
The company ended 2021 with record revenues and making its way among the best solar stocks. The global demand for solar energy across all segments and geographies is extremely strong. That is increasing SolarEdge’s share in the market due to unprecedented demand for its products. This gives it the financial flexibility to invest in expanding its manufacturing capacity and technological lead over its competitors.
All in all, SEDG is a rock-solid stock to buy in this sector.
Enphase Energy (ENPH)
Enphase is another big player in the solar market. ENPH just like other solar companies has been trading on the lower side since hitting a 52-week peak in Dec last year. This might be the right time to invest in ENPH stock? But why Enphase.
The market is already building up for solar companies. We have seen a glimpse of recent events in Russia and Ukraine. The global economies have decided to put heavy sanctions on Russia, which is a massive energy provider for Europe. We might see countries shifting to other sources. Enphase Energy is a big market leader, which will surely enjoy high demand in the coming times.
Moreover, with the sentiment turning towards renewable stocks, ENPH is among the big companies where investors like to invest.
The company caters to homeowners, business owners, and installation personnel. That is a pure consumer target place and that’s where it holds massive potential going forward.
Enphase has five-year historical sales growth of almost 30%. This means sales have been growing by an average of 30% each year for the past five years. That is amazing and we will certainly see these numbers surge in the next few years.
Being a profitable company, ENPH is successfully making its place on the list of best solar stocks to invest in.
