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 heavily on renewable energy sources, and solar will be among the top sources used.

According to the National Renewable Energy Laboratory, the industry will add 80 gigawatts of new solar capacity in 2023 to 320 GWdc.

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.

Best Solar Stocks

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 2023.

Maxeon Solar Technologies (MAXN)

First on our list of the best solar stocks is Maxeon Solar Technologies (MAXN) which became an independent company in 2020, after its spin-off from SunPower Corporation.

The company manufactures and supplies solar products across 100 countries via extensive retail channels. Maxeon Solar’s panel technology advancements cement its industry leadership.

The full-scale Maxeon 7 panel achieved a groundbreaking module aperture efficiency of 24.7%, validated by testing at the U.S. National Renewable Energy Laboratory (NREL).

Moreover, Maxeon has boosted efficiency in its Interdigitated Back Contact (IBC) products.

Maxeon 6 panels with 23% efficiency are now shipping to Europe, while the high-efficiency Maxeon 3 panels (24%) will be available for shipment in Q4 2023.

Maxeon Solar achieved impressive financial results for Q1, surpassing gross margin and Adjusted EBITDA goals.

MAXN achieved remarkable financial results, with a 42.70% YoY revenue growth to $318.33 million.

Additionally, their gross profit skyrocketed by 513.65%, transforming a $12.96 million loss into a $53.63 million profit this quarter.

Shipments surged to 774 MW in Q1 2023, up from 488 MW in the same quarter last year.

The company’s DG business thrived through effective supply chain management and successful ASP execution in Europe, while also experiencing increased profitability in the US.

In the North American utility-scale sector, Maxeon secured numerous new projects, ensuring production until 2025 and extending allocation until 2027.

Driven by high customer demand, MAXN is actively pursuing expansion opportunities in its North American supply chain.

MAXN is also advancing its application for a domestic cell and module facility through the DOE Loan Program Office.

Considering its stock price surge of over 80% YTD and a projected 36.71% growth potential, MAXN emerges as an attractive investment opportunity as one of the best solar stocks to buy in 2023.

Investors should consider MAXN as a favorable purchase at the moment.

Daqo New Energy Corp. (DQ)

Daqo New Energy (DQ) is the next in our best solar stocks list which 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.

In the first quarter of 2023, DQ’s polysilicon facilities operated efficiently, resulting in a production volume of 33,848 MT.

Daqo achieved a 5.5% decrease in production costs in RMB, primarily due to lower procurement costs of metallurgical-grade silicon powder.

During this period, DQ generated $490 million in EBITDA, demonstrating robust operating cash flow and maintaining a healthy balance sheet.

Its cash balance improved to $4.1 billion, and when combined with banknote receivables, it reached $4.9 billion.

In April, Daqo successfully completed the construction of its Phase 5A 100,000 MT polysilicon project in Inner Mongolia and initiated polysilicon production.

By the end of June 2023, DQ anticipates reaching full capacity, raising its total polysilicon nameplate capacity to 205,000 MT annually.

Furthermore, its new semiconductor-grade polysilicon project with a 1,000 MT annual capacity is on track to be completed by the end of September 2023.

With its fully digitalized and highly automated production system, the Phase 5A Inner Mongolia project is expected to elevate the company’s overall competitiveness.

It also includes the company’s production capacity, cost structure, and product quality.

Given the current business expansion, the DQ is an excellent investment choice as one of the best solar investments due to its well-rounded foundation and significant growth prospects.

First Solar (FSLR)

Another of the best solar stocks is First Solar (FSLR) which shines as a dominant force in the solar energy industry, revolutionizing the way we power our world.

With a stellar reputation, they specialize in cutting-edge solar solutions. What sets them apart is their unwavering commitment to crafting exclusive, state-of-the-art thin-film modules.

These exceptional panels outperform their silicon counterparts in challenging conditions, while their impressive size slashes the cost per watt.

When it comes to massive utility-scale solar projects, First Solar’s innovative marvels take the spotlight.

First Solar solidifies its leadership in thin film photovoltaics (PV) by acquiring Evolar AB, a perovskite technology leader.

The acquisition amounts to $38 million upfront, with an additional $42 million contingent on achieving technical milestones.

First Solar also secures a deal to supply 2 GWdc of responsibly produced thin film photovoltaic solar modules to Leeward Renewable Energy (LRE) in 2026 and 2027.

This expands on LRE’s existing partnership with First Solar and will increase its First Solar module fleet to nearly 6 GWdc by 2028.

Furthermore, FSLR and EDP Renewables strike a multi-year order for 1.8 GWdc of advanced thin film photovoltaic modules to power US projects developed by EDPR NA until 2028.

Its impressive performance, coupled with a solid track record of consistent returns, makes FSLR one of the attractive best solar stocks to buy in 2023 for long-term solar investment.

SunPower Corporation (SPWR)

SunPower (SPWR) came next in our best solar stocks list which provides fully integrated solar, storage, and home energy solutions in North America.

The company has been making moves toward 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. SunPower and OhmConnect recently unveiled a groundbreaking virtual power plant (VPP) initiative.

By utilizing the mySunPower app, eligible Californian homeowners equipped with SunPower solar panels and SunVault battery storage can seamlessly connect with OhmConnect.

This will help them to automatically deploy surplus stored energy during critical periods.

Through three new agreements, SunPower has effectively secured an adequate panel supply to meet its projected demands for 2023 and beyond.

The company’s SunPower Direct bookings skyrocketed by an impressive 97% YoY, while their channel revenue doubled quarter-over-quarter.

SunPower successfully trialed new scheduling software, enabling more reliable appointments and granting customers real-time tracking of technicians en route to their locations.

SunPower’s lease business experienced a remarkable 268% YoY growth in Q1.

Taking advantage of the Inflation Reduction Act and the U.S. Department of Treasury’s guidance on federal bonus tax credits, SunPower aims to expand its lease offerings in 2023.

To date this year, SunPower has secured financing commitments totaling $1 billion from HASI, Credit Agricole CIB, KKR-managed credit funds, and accounts.

These funds will be utilized to provide additional solar loans to customers. Despite its significant growth potential, SPWR is currently trading near its lowest point in the past 52 weeks.

Given its current position, it presents itself as one of the best solar investments to consider in 2023 during this stock dip.

Clearway Energy (CWEN)

Last but not least on our list of the best solar stocks list is Clearway Energy (CWEN).

It is an electric utility name that operates through conventional generation, renewables, and thermal energy segments.

CWEN and Clearway Group recently agreed to revamp the Cedro Hill Wind project in Bruni, Texas.

CWEN will invest around $63 million in net corporate capital, with the deal subject to adjustments.

If the project achieves commercial operations by the second half of 2024, it will supply power to an investment-grade utility under an amended agreement for 15 more years until 2045.

Clearway Energy refinanced the Amended and Restated Credit Agreement.

The refinancing included replacing LIBOR with SOFR plus a 0.10% credit spread adjustment as the reference rate.

The available revolving commitments increased to $700 million, and the maturity date was extended to March 15, 2028.

Additionally, the letter of credit sub-limit increased to $594 million, and some technical modifications were implemented.

As of May 2, 2023, there were no outstanding borrowings under the revolving credit facility, but $119 million in letters of credit remained.

In the most recent quarterly outcomes during May 2023, the organization disclosed a 34.58% surge in earnings compared to the previous year, totaling $288 million.

Clearway concluded the quarter with a financial position of $576 million in cash and comparable assets.

This substantial sum provides a suitable foundation for concentrating on its immediate objectives.

Clearway’s 2023 financial outlook remains strong despite Q1’s renewable resource setback.

The Company boosted financial flexibility, expanding its untapped $700 million revolving credit facility.

CWEN stock shines due to its burgeoning renewable energy income, making it a suitable pick as the best solar investments for long-term consideration.

We’ve also compiled a list of the 30 best solar stocks for 2023.

Advantages Of Investing In Solar Stocks

Solar energy is gaining significant traction in the global energy landscape as a clean and renewable source of power.

As the world shifts towards sustainability and reducing carbon emissions, investing in best solar stocks presents numerous advantages.

• Growing Market Potential and Increasing Demand

  Solar energy has witnessed remarkable growth in recent years, driven by increasing environmental awareness and government support.

  The global solar market is projected to expand significantly, creating opportunities for investors.

  As countries strive to achieve renewable energy targets, the demand for solar power is expected to rise substantially.

  By investing in solar stocks, investors can tap into this growing market potential and benefit from the increasing demand for clean energy.

• Environmental Benefits and Sustainability

  Investing in solar stocks aligns with environmental and sustainability goals.

  Solar energy is a clean and renewable source, generating electricity without emitting greenhouse gases or pollutants.

  By supporting solar companies, investors contribute to mitigating climate change and reducing dependence on fossil fuels.

  This alignment with sustainable practices not only benefits the environment but also enhances a company’s long-term prospects, making solar stocks an attractive investment option.

• Favorable Government Policies And Incentives

  Governments worldwide are implementing supportive policies and incentives to promote solar energy adoption.

  These initiatives include tax credits, grants, and subsidies, which create a conducive environment for solar companies to thrive.

  Investors can leverage these favorable policies and incentives, which can positively impact the financial performance of solar firms and ultimately benefit shareholders.

Investing In Tech Stocks

• Innovation and Technological Advancements

  The technology sector is known for its constant innovation and breakthroughs, which can present lucrative investment opportunities.

  Tech stocks offer the potential for substantial returns due to the transformative nature of technological advancements.

  Companies involved in areas such as artificial intelligence, cloud computing, and e-commerce are continuously pushing boundaries and disrupting traditional industries.

  By investing in tech stocks, investors gain exposure to cutting-edge technologies and the potential for significant growth.

• Diversification and Portfolio Stability

  Tech stocks can provide diversification benefits to an investment portfolio.

  Technology companies operate across various sectors, including finance, healthcare, consumer goods, and communication.

  This diversification helps reduce overall portfolio risk, as the performance of tech stocks may not correlate strongly with other sectors.

  Additionally, the tech sector has historically exhibited resilience during economic downturns, making tech stocks an appealing choice for portfolio stability.

Investing In Energy Stocks

• Steady Income and Dividend Potential

  Energy stocks, particularly those in the traditional energy sector such as oil and gas, have long been known for providing stable income and dividend potential.

  These companies often have established operations and generate consistent cash flows.

  While the shift towards renewable energy may impact certain segments of the energy sector, investing in diversified energy stocks can provide income stability.

  It can also benefit from the potential growth of renewable energy investments.

• Global Energy Demand and Long-Term Growth

  Energy stocks continue to play a crucial role in meeting the world’s energy demand. As emerging economies grow and industrialize, energy consumption is expected to increase.

  By investing in energy stocks, investors can capitalize on this long-term growth potential.

  Moreover, companies involved in renewable energy and clean technologies are well-positioned to benefit from the transition to a low-carbon economy.

  This will also provide an opportunity for investors to participate in sustainable energy solutions.

Best Online Brokers for Solar Stocks

• Competitive Trading Fees and Commissions

  When investing in solar stocks, selecting an online broker with competitive trading fees and commissions is essential.

  Low fees can help maximize returns on investment and reduce trading costs over time.

  Some popular online brokers known for their competitive fee structures include TD Ameritrade, ETRADE, and Interactive Brokers.

• Research and Analytical Tools

  Comprehensive research and analytical tools provided by online brokers are valuable for making informed investment decisions.

  Features like real-time market data, stock screeners, and charting tools can assist investors in identifying potential solar stocks to invest in.

  Online brokers such as Fidelity Investments, Charles Schwab, and Robinhood offer robust research platforms to aid investors in their analysis.

Features To Look For In Solar Stocks

• Strong Financial Performance

  When considering solar stocks for investment, it is crucial to evaluate a company’s financial performance.

  Look for solar companies with a track record of revenue growth, profitability, and healthy balance sheets.

  Key financial indicators to assess include revenue growth rates, earnings per share, debt levels, and return on equity.

• Market Position and Competitive Advantage

  Assessing a solar company’s market position and competitive advantage is vital.

  Look for companies with a strong market presence, a diversified customer base, and a solid reputation within the solar industry.

  A company with a competitive advantage, such as proprietary technology or strategic partnerships, may have a higher likelihood of long-term success and market outperformance.

Conclusion

The future of solar energy is shining brighter than ever, and investing in the right solar stocks can yield impressive returns.

With innovative technologies, supportive policies, and increasing global demand for clean energy solutions, the stage is set for substantial growth in the solar industry.

By capitalizing on this renewable energy revolution, investors have the opportunity to not only make a positive impact on the planet but also reap significant financial rewards.

So, as the sun continues to rise on the renewable energy landscape, seize the chance to power your portfolio and illuminate a brighter, sustainable future with the best solar stocks of 2023.

Frequently Asked Questions

Is Solar a Good Stock Sector?

The solar sector has shown remarkable growth and potential, driven by increasing demand for renewable energy.

Government support, technological advancements, and falling costs have boosted solar stocks. However, market volatility and competition pose risks.

Investors should consider long-term prospects, policy changes, and company fundamentals before investing in this promising yet dynamic sector.

Why Are Solar Shares Dropping?

Solar shares are dropping due to various factors. Uncertainty surrounding government policies, reduced subsidies, and declining prices have affected investor confidence.

Additionally, increased competition from other renewable energy sources and geopolitical tensions impacting supply chains have contributed to the decline.

However, long-term growth prospects remain strong, driven by the global shift towards clean energy.

Is There a Future In Solar?

Solar energy is poised for an electrifying future. With advancing technology and increased adoption, solar power holds immense potential.

It offers sustainable and clean energy generation, reducing carbon emissions and combating climate change.

As investments soar and efficiency improves, the future shines bright for solar, illuminating a path toward a greener world.