10 Best Solar Stocks To Invest in Today

powerofforever / Getty Images
powerofforever / Getty Images

Solar stocks have gone through various boom and bust periods 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 — have not yet reached the point of critical mass at which widespread deployment is inevitable.

However, for patient investors who pick the right stocks, the promise of solar may one day produce sizable investment returns, especially if favorable legislation provides the industry with a tail wind.

See Also: 6 Unusual Ways To Make Extra Money (That Actually Work)

Which Solar Stocks Are the Best To Buy?

Here are 10 of the best solar stocks for investors to look at in conjunction with a financial advisor who can offer some perspective regarding risk and reward:

  1. Enphase Energy Inc. (ENPH)

  2. Sunrun Inc. (RUN)

  3. First Solar Inc. (FSLR)

  4. Array Technologies Inc. (ARRY)

  5. Daqo New Energy Corp. (DQ)

  6. Hannon Armstrong Sustainable Infrastructure Capital Inc. (HASI)

  7. SolarEdge Technologies Inc. (SEDG)

  8. Canadian Solar Inc. (CSIQ)

  9. SunPower Corp. (SPWR)

  10. JinkoSolar Holding Company, Ltd. (JKS)

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 own due diligence before choosing to buy 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 are behind the stock, giving it a consensus rating of “buy” and offering a 12-month price target of $127.23.

The stock has gone through a series of boom and bust years. Although its five-year return of 479.73% trounces the S&P 500’s 84.98% over the same time period, its recent results have been disappointing, returning -35.68% over the past three years and -37.98% over the past year. 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 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 buying them outright.

Their stock was down -17.01 over the past five years but up 80.60% over the past year. This includes the YTD drop in the stock of 13%. Analysts have a consensus “buy” rating on the company and expect an 8.3% return 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 310.64% over the past five years, and 236.33% over the past three years, FSLR is already up 50.26% in 2024 alone.

Although analysts have a consensus “strong buy” rating on the stock, the average price target is actually about 7.22% below current levels, suggesting investors might want to wait for the stock to cool off a bit before plunging in.

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. The stock has been a perennial underachiever, losing over 30% YTD in 2024 and more than 45% over the past year, bringing its five-year total return to -61.73%. However, analysts are still bullish. The 22 covering the stock have a consensus “strong buy” rating on the company, with an average one-year price target 57.91% 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 70% over the past three years, 54% over the past year and more than 32% YTD in 2024. But the seven analysts following the company remain bullish, with a consensus “strong buy” rating and a $24.13 price target.

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. Thus, this stock is more of a dividend play, although it also offers the opportunity for capital appreciation. Hannon Armstrong pays a current yield of 5.46% and shares are up over 11.81% 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 both traditional solar services along with battery storage.

Unfortunately, it’s been a rocky road for SolarEdge. After trading mostly sideways from 2020 to 2023, the stock has recently fallen off a cliff. In its recently released Q1 2024 earnings report, the company came up well short in terms of both revenues and earnings and projected below-consensus results going forward. The stock is now down nearly 65% in 2024 alone, and over 87% over the past year.

Analysts, however, remain bullish, and there could be some sizable capital gains ahead if the company can turn things around. The consensus 12-month price target of the 29 analysts following the stock is $72.55, suggesting a potential gain one year out of over 119%. Those analysts also have a consensus “buy” 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 “buy” rating on the stock and a $25.06 one-year price target.

9. SunPower Corp. (SPWR)

SunPower is a residential provider of solar panels that also installs and finances them. It’s also one of the “OG” solar companies, having been headquartered in Silicon Valley since way back in 1985.

But if you’re interested in SunPower, you’ve got to regard your investment as a speculation, as SPWR is a penny stock with a volatile trading pattern, having lost 42% over the past year alone. Analysts have a “hold” rating on the company, with an average price target of $3.10, about 6% 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 $4.6 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.

Analysts see it as a hold right now, with a price target only slightly above current levels, but his is due in part to a general China slowdown that is affecting all stocks in the country.

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 stocks to surface.

FAQ

  • Do any solar companies pay dividends?

    • A number of renewable energy companies pay dividends, although they are generally not purely solar-focused. Dividend-paying "solar" stocks are typically more mature utilities that also have some solar exposure.

  • Is it wise to invest in solar?

    • Solar is a fascinating corner of the investment world. On the one hand, the world is in need of renewable energy sources like solar, and governments across the globe are slowly moving in that direction. According to Mordor Intelligence, the compound annual growth rate for solar over the next five years is expected to be an incredible 31.85%, which is remarkably high for an entire industry.

    • However, what may be a good idea and a promising source of revenue in the future doesn't always translate into a profitable investment today. While solar is definitely growing, it's very difficult to predict its future path. For starters, other forms of alternative energy, even of the non-renewable sort like nuclear energy, or competitive sources like wind and gas-fired power plants may impede the future growth of solar. It can also be hard to pick the specific winners in the group, as so many competing solar companies are out there and a number have already fallen into bankruptcy.

    • When you factor all of this together, it still makes solar a relatively speculative area for investment. However, if you can do your due diligence and pick the winning company or companies in the industry over the long run, your investment could pay significant dividends.

  • What are the top five solar companies?

    • Here are the top 5 solar companies in the world in terms of trailing 12-month revenue:

      • JinkoSolar Holding Company (JKS)

      • Canadian Solar Inc. (CSIQ)

      • First Solar Inc. (FSLR)

      • GCL-Poly Energy Holdings Ltd. (based in Hong Kong, not traded in the U.S.)

      • Sunpower Corp. (SPWR)

Daria Uhlig contributed to the reporting for this article.

Data is accurate as of June 21, 2024, and sourced using CNN Markets and Nasdaq. Information is subject to change. Analyst ratings were sourced from Yahoo Finance.

This article originally appeared on GOBankingRates.com: 10 Best Solar Stocks To Invest in Today

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