Solar energy has become quite popular because of rising concerns about climate change. The industry has grown rapidly even as fossil fuels remain the dominant source of global energy use. Considering that, for investors, the best solar stocks remain a key investing area. In the long term, the countries will rely highly on renewable energy sources and solar would be among the top sources used.
According to the National Renewable Energy Laboratory, the industry will add 10 gigawatts of new solar capacity annually through 2022. That should add an average of 18 to 20 gigawatts annually between the 2023 and 2030 timeframe. Amazingly, solar is on track to be the lowest-cost source of bulk power in the coming years.
With solar energy growing in demand, there are several companies that are focused on solar energy. We have gathered the five best solar stocks to buy now, in early 2022.
Maxeon Solar Technologies (MAXN)
Maxeon Solar Technologies (MAXN) became an independent company in 2020, after its spin-off from the California-based SunPower Corporation. The company manufactures and supplies solar products across 100 countries via extensive retail channels.
In November before announcing quarterly results, Maxeon signed an agreement to supply up to 400 megawatts of its high-efficiency bifacial Performance. MAXN will supply solar panels for the construction of the Danish Fields Solar power plant project located near Houston. The project will require modules to be delivered in late 2022 through the third quarter of 2023.
Following that, the company reported its quarterly outcomes. MAXN reported a loss of $1.34 per share, beating estimates by $0.01 and making it one of the best solar stocks to buy in stock dip. The revenue increased 6.71% year-over-year to $220.49 million but missed estimates by $5.78 million.
Maxeon’s management said that the company executed pretty well during the quarter despite unprecedented supply chain conditions. Maxeon’s Distributed Generation channel set another record in Europe. Whereas, the transition to sales Beyond the Panel also accelerated, with microinverter sales increasing 50%. In Utility-Scale, the company booked its first major project in India totaling nearly 200MW.
Bank of America analyst Julien Dumoulin-Smith on December 3 upgraded MAXN solar stocks to Buy from Neutral with a $23 price target. Therefore, MAXN can be a good buy now.
Daqo New Energy Corp. (DQ)
Daqo New Energy (DQ) is a Chinese company specializing in the development and distribution of monocrystalline silicon and high-purity polysilicon. The company supplies silicon products primarily for the global solar photovoltaic industry. The photovoltaic product manufacturers further process its polysilicon into ingots, wafers, cells, and modules for solar power solutions.
Daqo is a highly profitable company, and it has been doing great. DQ recently announced that its subsidiary Xinjiang Daqo had received energy consumption approval for its polysilicon projects. The projects consist of a 100,000 metric tons polysilicon project for the solar industry. It also incorporates a 1,000 metric tons polysilicon project for the semiconductor industry. The total investment is valued at around RMB8.55 billion. The construction is projected to commence in the first quarter of this year and be completed in the second quarter of 2023.
DQ is expected to gain from higher production and sales volumes for polysilicon, making it one of the best solar stocks to buy. While, higher polysilicon average selling prices, driven by strong downstream demand, are also expected to boost its sales and margins.
During the latest quarterly results, the company posted an EPS of $3.84, beating estimates by $1.19. While the revenue soared over 366.65% to $585.78 million, surpassing estimates by $37.55 million.
DQ solar stock is a solid buy at the moment as the company has all the basics covered with high growth potential.
First Solar (FSLR)
First Solar (FSLR) is a global leader in developing solar energy solutions. It develops, manufactures, and sells advanced solar modules.
One thing that sets First Solar apart from other solar panel makers is its focus on manufacturing a proprietary advanced thin-film module. In near to ideal conditions such as low light and warm weather, these panels perform better than competing ones made with silicon. They’re also larger in size, which helps reduce the cost per watt. Those factors make them ideal for utility-scale solar energy projects.
First Solar further distinguishes itself from its peers in the solar sector by having one of the strongest balance sheets. It routinely has more cash than debt. That gives it the financial flexibility to continue executing its strategy. Overall, FSLR is in an excellent position to thrive as the solar industry continues expanding.
FSLR recently secured an order from Swift Current Energy. The order involves the supply of 1.2 gigawatts of First Solar’s advanced, ultra-low carbon thin-film photovoltaic solar modules. The modules are scheduled to be delivered in 2023 and 2024. The deal strengthens First Solar’s position as the largest and a reliable supplier of PV solar modules in the U.S.
In this context, it is worth mentioning that First Solar is investing $680 million. The aim is to expand America’s domestic PV solar manufacturing capacity by 3.3 GW annually. FSLR seems to be one of the best solar stocks to buy and hold for the long term.
SunPower Corporation (SPWR)
SunPower (SPWR) provides fully integrated solar, storage, and home energy solutions in North America. The company has been making moves towards solid growth. Despite facing supply-chain disruptions and competitive headwinds in the sector, SunPower is making bold moves. That makes it a bit risky but equally attractive.
The recent acquisition of Blue Raven Solar has enabled the company to expand into Northwest and Mid-Atlantic regions. Whereas, with the launch of SunPower Financial, the group now offers various financial products. That adds an extra avenue to the revenue stream.
SPWR’s latest quarter results released in early November last year showed strong growth in residential demand with record lead generation. The revenue improved by 17.8% year over year to hit $323.6 million. The net loss of $6.5 million from last year turned into a net income of $9.8 million.
As the homeowners are adopting solar energy and storage, SunPower has a lot of space to fill and make its way to the end consumer. The flexible financing options and favorable clean energy incentives, currently, under consideration by Congress paves way for increasing solar demand.
SPWR is trading around its 52-week lows and at its current position, it would be one of the best solar stocks to buy in the stock dip.
Clearway Energy (CWEN)
Clearway Energy (CWEN) is an electric utility name that operates through conventional generation, renewables, and thermal energy segments.
That was a big driver in the recent sale of its thermal assets to private equity giant KKR for $1.9 billion. However, some analysts expect that the company will use the cash to finance other renewable energy investments, including its Utah-based solar energy portfolio.
In the latest quarterly results in Nov 2021, the company reported a 6% increase in revenue year over year to $351 million. Clearway ended the quarter with cash and equivalents of $555 million. That’s a good amount to focus on its short-term goals.
Management feels good enough regarding the company’s performance. The company believes that its growth outlook into 2022 is on target as its sponsor’s remaining 2021 construction projects.
Wall Street compares Clearway to a real estate investment trust. When the group develops energy projects, it already has buyers in place. Thus, during a given contract’s lifespan, CWEN generates ample cash.
Given its growing stream of renewable energy income, CWEN stock stands out as an attractive pick for long-term investors. In addition, it offers a generous dividend yield of 4.16% and targets 5% to 8% dividend growth.