According to a report by the World Economic Forum published on November 8, the US election result is expected to have a significant impact on the transition to renewable energy sources. Solar and wind energy stocks fell sharply following the election, as Donald Trump’s victory is anticipated to have a negative short-term impact on current climate policies. The president-elect has proposed policies that include increasing natural gas pipelines, ending offshore wind energy projects, and boosting fossil fuel production by easing restrictions on drilling on federal lands. He has also expressed intentions to withdraw the US from the Paris climate agreement and to support nuclear energy production.
Despite these challenges, analysts predict that the boom in renewable energy in the US is unlikely to be dramatically slowed. The Inflation Reduction Act passed during the outgoing administration, is expected to inject $1 trillion of spending into green energy, with estimates that 85% of the money has gone to districts that elected Republicans. This financial support, along with existing opposition to the curtailment of renewable energy, suggests that the long-term trajectory of the energy transition remains uncertain but potentially resilient.
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Trump’s Energy Policy and the Role of Elon Musk
In an interview with CNBC on November 13, Will Rhind, CEO of GraniteShares, discussed the potential implications of a Trump presidency on renewable energy such as wind and solar. Rhind noted that the playbook on energy policy was already seen in the previous Trump administration. The Trump administration has historically been more supportive of fossil fuels and less focused on renewable energy. Therefore, stocks and sectors favored by the Biden administration, such as solar and wind, might see a downturn.
Rhind suggested that the overall narrative may seem like it’s shifting back toward traditional energy sources. However, Elon Musk seems to be playing an integral role in the Trump administration, and he has been a proponent of climate policies, with his electric vehicle (EV) industry and other businesses, which suggests that energy transition policies may not be as impactful as some might expect today.
While the outcome of the US election and the anticipated policies of the new administration pose short-term challenges to renewable energy, the long-term outlook remains cautiously optimistic. With that in context, let’s take a look at the 10 best wind power and solar stocks to invest in now.
A rooftop view of a busy city skyline with solar energy panels and wind turbines illuminating the skyline.
Our Methodology
To compile our list of the 10 best wind power and solar stocks to invest in now, we used clean energy ETFs plus online rankings to compile an initial list of 20 wind and solar energy stocks. We then used Insider Monkey’s Hedge Fund database to rank 10 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Wind Power and Solar Stocks To Invest In Now
10. Shoals Technologies Group, Inc. (NASDAQ:SHLS)
Number of Hedge Fund Holders: 27
Shoals Technologies Group, Inc. (NASDAQ:SHLS) is a leading provider of electrical balance of systems (EBOS) solutions for utility-scale solar and wind energy projects. The company’s products streamline solar installations and improve system performance for utility-scale and commercial clients. Moreover, these components help reduce costs and accelerate the deployment of solar power projects worldwide.
Shoals Technologies Group, Inc. (NASDAQ:SHLS) is investing in wind energy and energy storage solutions, including the development of recombiners and disconnects for battery energy storage systems. The company believes that these products can play a crucial role in the growing energy storage market, which is expected to more than double in size by 2027. Furthermore, Shoals Technologies Group, Inc. (NASDAQ:SHLS) is diversifying into new markets, including the commercial and industrial (C&I) sector, and the company has built an experienced commercial and product development team to focus on this market. It has already begun shipping product to C&I customers.
On November 22, two US congressmen proposed changes to the 45X advanced manufacturing production tax credit under the Inflation Reduction Act (IRA). The congressmen raised concern that foreign companies are benefiting from the tax incentives by establishing manufacturing facilities in the United States, potentially at the expense of domestic firms. The proposed changes aim to restrict these tax credits to US-based companies only. If the tax credit is revised to favor domestic manufacturers, Shoals Technologies Group, Inc. (NASDAQ:SHLS) could experience significant benefits.
9. Clearway Energy Inc. (NYSE:CWEN)
Number of Hedge Fund Holders: 29
Clearway Energy Inc. (NYSE:CWEN) is a leading renewable energy developer that’s focused on utility-scale wind and solar power projects. The company operates a large portfolio of clean energy assets and supplies electricity to utilities and corporate clients.
Clearway Energy Inc. (NYSE:CWEN) has a strong emphasis on solar and wind power, with a focus on developing and acquiring new projects in these areas. On November 25, the company announced its agreement to acquire the Tuolumne wind project, a 137 MW facility in Washington state, from Turlock Irrigation District. The project will operate under a new 15-year power purchase agreement with Turlock Irrigation District, extending through 2040. As part of the deal, the company also secured an option for a potential future repowering of the project.
Clearway Energy Inc. (NYSE:CWEN) plans to invest $70 million to $75 million in total long-term corporate capital for the acquisition. Based on the anticipated financing terms, the project is expected to contribute approximately $9 million in annual levered asset CAFD (Cash Available for Distribution) on average over five years starting in 2026. In addition to this investment, Clearway Energy Inc. (NYSE:CWEN) is also exploring opportunities in battery storage and hybridization, which will enable it to optimize its renewable energy output and improve its competitiveness in the market.