10 Solar Stocks Billionaires Are Loading Up On

In this article, we discuss 10 solar stocks billionaires are loading up on.

By 2024, the International Energy Agency (IEA) anticipates that the costs of generating electricity from new onshore wind and solar photovoltaic plants will decrease, but not at a sufficiently rapid pace to drop below the values observed before the Covid-19 pandemic in most markets outside of China. Although commodity and freight prices have decreased compared to the peak levels of the previous year, they still remain high. Additionally, developers are facing higher financing costs due to the rise in interest rates. Consequently, the global average levelised costs of energy (LCOEs) for onshore wind and solar PV in 2024 are expected to remain 10-15% higher than the levels recorded in 2020. The primary portion of the costs associated with generating electricity from solar PV and wind power plants is attributed to the initial investment, while the expenses related to operations and maintenance are relatively minimal. The installation of new solar PV and wind capacity is projected to result in approximately EUR 100 billion in savings for electricity consumers in the European Union between 2021 and 2023, as per the IEA report. 

The combination of inflation, the energy crisis, and increasing interest rates is placing multiple countries in dire financial distress, with bankruptcy looming over their heads unless immediate aid is offered by developed nations. This situation will likely result in loss of access to electricity for millions of people around the world. The global energy crisis has resulted in a staggering surge in the adoption of renewable energy sources. According to the International Energy Agency, the global capacity for renewable power is set to nearly double in the next five years, outranking coal as the primary source of electricity generation worldwide by early 2025. This anticipated growth is 30% higher than the previous year’s forecast, illustrating the accelerated support from governments for renewable energy policies. The Economist suggests that overall renewable energy consumption will increase by approximately 11%, with Asia leading the charge.

PitchBook predicts that in the upcoming five years, the climate tech sector is expected to reach a market value of $1.4 trillion, indicating a compound annual growth rate of 8.8%. This significant growth rate is likely to capture the attention of discerning investors. Billionaires, always keen on capitalizing on profitable prospects, are enthusiastically investing in solar stocks. In the portfolios of billionaires during the first quarter of 2023, prominent solar stocks such as Tesla, Inc. (NASDAQ:TSLA), First Solar, Inc. (NASDAQ:FSLR), and Enphase Energy, Inc. (NASDAQ:ENPH) have been identified.

Our Methodology 

Insider Monkey tracks billionaire-owned stocks and in this article, we selected the solar stocks that attracted the highest number of billionaire investors during the first quarter of 2023. We have also mentioned the overall hedge fund sentiment towards each stock as of Q1 2023. 

Photo by Science in HD on Unsplash

Solar Stocks Billionaires Are Loading Up On 

10. Canadian Solar Inc. (NASDAQ:CSIQ)

Number of Hedge Fund Holders: 17

Number of Billionaire Investors: 7

Canadian Solar Inc. (NASDAQ:CSIQ) engages in the creation, innovation, production, and distribution of solar ingots, wafers, cells, modules, and additional solar energy and battery storage items worldwide. It is one of the top solar stocks on the radar of billionaires. In Q1 2023, 7 billionaires held stakes in Canadian Solar Inc. (NASDAQ:CSIQ) as per Insider Monkey data.

On May 19, Oppenheimer increased its target price for Canadian Solar Inc. (NASDAQ:CSIQ) from $60 to $68 and maintained an Outperform rating on the stock after the Q1 report. According to the firm’s research note, Canadian Solar Inc. (NASDAQ:CSIQ) is performing strongly and demonstrating its potential for operational leverage amidst the growing global demand for solar and storage. The firm is optimistic about the company’s advancements in its initial public offering in Shanghai, which is anticipated to provide funding for expanding its capacity in Asia.

According to Insider Monkey’s first quarter database, 17 hedge funds were bullish on Canadian Solar Inc. (NASDAQ:CSIQ), compared to 16 funds in the prior quarter. Billionaire Ken Griffin’s Citadel Investment Group is the largest stakeholder of the company, with 884,601 shares worth $35.2 million. 

Like Tesla, Inc. (NASDAQ:TSLA), First Solar, Inc. (NASDAQ:FSLR), and Enphase Energy, Inc. (NASDAQ:ENPH), Canadian Solar Inc. (NASDAQ:CSIQ) is one of the solar stocks that billionaires are piling into. 

9. Brookfield Renewable Partners L.P. (NYSE:BEP)

Number of Hedge Fund Holders: 17

Number of Billionaire Investors: 7

Brookfield Renewable Partners L.P. (NYSE:BEP) possesses a collection of renewable energy facilities located mainly in North America, Colombia, Brazil, Europe, and Asia. The company’s power generation facilities encompass a variety of sources such as hydroelectric, wind, solar, distributed generation, pumped storage, cogeneration, and biomass. In Q1 2023, Brookfield Renewable Partners L.P. (NYSE:BEP) was part of 7 billionaire portfolios. Billionaire Ken Griffin holds a stake in the company. 

On May 8, Brookfield Renewable Partners L.P. (NYSE:BEP) declared a $0.3375 per share quarterly dividend, in line with previous. The dividend is payable on June 30, to shareholders of record on May 31.

Desjardins analyst Brent Stadler on May 8 raised the firm’s price target on Brookfield Renewable Partners L.P. (NYSE:BEP) to C$46 from C$45 and kept a Hold rating on the shares.

According to Insider Monkey’s first quarter database, 17 hedge funds were bullish on Brookfield Renewable Partners L.P. (NYSE:BEP), compared to 19 funds in the earlier quarter.

ClearBridge Sustainability Leaders Strategy made the following comment about Brookfield Renewable Partners L.P. (NYSE:BEP) in its Q4 2022 investor letter:

“Rising interest rates remain the key risk to renewables utility Brookfield Renewable Partners L.P. (NYSE:BEP), an underperformer in the fourth quarter, though we view Brookfield’s stable fundamentals (with >90% of contracted cash flows having an average term of 14 years), inflation protection (~70% of power purchase agreements are indexed to inflation) and long-term growth opportunities as attractive in the current environment. Brookfield’s balance sheet is also relatively well-protected against rising rates given it has 97% fixed-rate debt with an average term to maturity of 12 years.”

8. Shoals Technologies Group, Inc. (NASDAQ:SHLS)

Number of Hedge Fund Holders: 34

Number of Billionaire Investors: 7

Shoals Technologies Group, Inc. (NASDAQ:SHLS) offers solutions and components for electrical balance of system (EBOS) applications. These applications include solar energy, battery energy, and electric vehicle charging. It is one of the best solar stocks to invest in. In the first quarter of 2023, 7 billionaires held shares of Shoals Technologies Group, Inc. (NASDAQ:SHLS). 

On May 8, Shoals Technologies Group, Inc. (NASDAQ:SHLS) reported a Q1 GAAP EPS of $0.10 and a revenue of $105.09 million, outperforming Wall Street estimates by $0.04 and $7.53 million, respectively. 

Truist analyst Jordan Levy raised the firm’s price target on Shoals Technologies Group, Inc. (NASDAQ:SHLS) to $35 from $32 and kept a Buy rating on the shares on May 9. In a research note to investors, the analyst highlighted that Shoals Technologies Group, Inc. (NASDAQ:SHLS)’s Q1 earnings surpassed expectations, indicating the continued strength of utility-scale solar growth even amidst wider macroeconomic uncertainties. The firm further suggested that the potential long-term margin profile for Shoals Technologies Group, Inc. (NASDAQ:SHLS) could exceed the current valuation of its shares.

According to Insider Monkey’s first quarter database, 34 hedge funds were bullish on Shoals Technologies Group, Inc. (NASDAQ:SHLS), compared to 32 funds in the prior quarter. Billionaire Louis Bacon’s Moore Global Investments held a $27.5 million stake in the company. 

ClearBridge Investments made the following comment about Shoals Technologies Group, Inc. (NASDAQ:SHLS) in its Q3 2022 investor letter:

“Shoals Technologies Group, Inc. (NASDAQ:SHLS) manufactures electrical balance of systems (EBOS) components for ground-mounted solar projects and has been gaining market share for quality of service and price. Shoals is also starting to develop an EV charging infrastructure business. We previously owned Shoals and sold our position earlier this year as supply chain issues were negatively affecting margins. Improving supply chain dynamics should support the stock, and tax credits for clean energy production and investment in the IRA should further act as a tailwind for Shoals.”

7. SolarEdge Technologies, Inc. (NASDAQ:SEDG)

Number of Hedge Fund Holders: 42

Number of Billionaire Investors: 8

SolarEdge Technologies, Inc. (NASDAQ:SEDG) specializes in the design, development, and commercialization of optimized inverter systems for solar photovoltaic installations. These inverter systems are specifically tailored to maximize the efficiency of direct current in solar energy generation. SolarEdge Technologies, Inc. (NASDAQ:SEDG) is a sought-after solar company among billionaires. In the first quarter of 2023, a total of 8 billionaires held positions in the company.

On May 24, Barclays maintained an Overweight rating on SolarEdge Technologies, Inc. (NASDAQ:SEDG) but reduced the price target on the shares from $392 to $390. According to the firm, SolarEdge Technologies, Inc. (NASDAQ:SEDG) is positioned to capture a larger portion of the market in the United States. The company’s backlog provides some protection against a potential decline in the residential market in both the U.S. and Europe, as stated in the firm’s research note to investors.

According to Insider Monkey’s first quarter database, 42 hedge funds were bullish on SolarEdge Technologies, Inc. (NASDAQ:SEDG), compared to 43 funds in the prior quarter. Billionaire David Elliot Shaw’s D E Shaw held the biggest stake in the company, comprising 895,709 shares worth $272.25 million. 

Here is what ClearBridge International Growth EAFE Portfolio has to say about SolarEdge Technologies, Inc. (NASDAQ:SEDG) in its Q2 2022 investor letter:

“We are well-positioned to participate in the accelerating energy transition. High and rising utility costs combined with policy support are driving increased penetration of home solar plus storage systems in Europe. Israel-based SolarEdge Technologies (NASDAQ:SEDG) expects to see significant growth in solar installations in this market led by Germany and Italy, among others, where consumers are not only demanding solar on the roof but a complete system solution including batteries. This phenomenon is accelerating revenue growth for these companies.”

6. Array Technologies, Inc. (NASDAQ:ARRY)

Number of Hedge Fund Holders: 31

Number of Billionaire Investors: 9

Array Technologies, Inc. (NASDAQ:ARRY) is a company that produces and markets ground-mounting tracking systems for solar energy projects worldwide. On May 9, Array Technologies, Inc. (NASDAQ:ARRY) reported a Q1 non-GAAP EPS of $0.25 and a revenue of $376.8 million, outperforming Wall Street estimates by $0.21 and $54.26 million, respectively. 

On May 22, Piper Sandler analyst Kashy Harrison increased the price target for Array Technologies, Inc. (NASDAQ:ARRY) from $25 to $26 while maintaining an Overweight rating on the shares. As per the analyst, the first quarter earnings season for renewable and alternative energy coverage was characterized by multiple events, including significant beats and misses, unexpected capital markets activity, and domestic content guidance. The firm generally holds a positive view on domestic content guidance for the industry.

According to Insider Monkey’s first quarter database, 31 hedge funds were bullish on Array Technologies, Inc. (NASDAQ:ARRY), compared to 36 funds in the prior quarter. Additionally, 9 billionaires held stakes in the company as of March end, including billionaire Steve Cohen. 

Array Technologies, Inc. (NASDAQ:ARRY) is among the preferred solar picks of billionaires, along with Tesla, Inc. (NASDAQ:TSLA), First Solar, Inc. (NASDAQ:FSLR), and Enphase Energy, Inc. (NASDAQ:ENPH).

Baron Discovery Fund published its Q2 2021 investor letter and mentioned Array Technologies, Inc. (NASDAQ:ARRY). Here is what the fund said: 

“Array Technologies, Inc., a leading manufacturer of solar trackers, fell during the quarter after management rescinded guidance due to uncertainty around rapidly rising steel costs. Our understanding at the time of the company’s IPO in October 2020, was that Array fixed input costs at the same time as its sales contracts were signed, thereby eliminating commodity pricing risk. However, this quarter management noted that a lag of just a few days between these events led to significant pricing mis-matches due to the extreme volatility in steel pricing during that period. This disrupted not only Array, but the entire contracting complex around large solar projects. Contracts relating to these projects had to be renegotiated across the board, leading to multiple quarter delays in revenue recognition. Further, our due diligence has indicated that while the company has terrific products, it might be falling behind its competitors from an innovation standpoint, increasing our concerns that the company will not reach its market penetration goals. For these reasons we sold the investment in the quarter.”

5. Daqo New Energy Corp. (NYSE:DQ)

Number of Hedge Fund Holders: 21

Number of Billionaire Investors: 10

Daqo New Energy Corp. (NYSE:DQ) specializes in the production and distribution of polysilicon for manufacturers of photovoltaic products in the People’s Republic of China. It is one of the top solar stocks found in the investment portfolios of billionaires. In Q1 2023, 10 billionaires held stakes in Daqo New Energy Corp. (NYSE:DQ). 

On May 4, Daiwa analyst Dennis Ip upgraded Daqo New Energy Corp. (NYSE:DQ) to Outperform from Hold with a $45 price target.

According to Insider Monkey’s first quarter database, 21 hedge funds were bullish on Daqo New Energy Corp. (NYSE:DQ), compared to 20 funds in the prior quarter. Billionaire Lei Zhang’s Hillhouse Capital Management is the largest stakeholder of the company, with 2 million shares worth $95.4 million. 

4. Sunrun Inc. (NASDAQ:RUN)

Number of Hedge Fund Holders: 27

Number of Billionaire Investors: 10

Sunrun Inc. (NASDAQ:RUN) is involved in multiple aspects of residential solar energy systems. The company’s activities include designing, developing, installing, selling, owning, and maintaining these solar energy systems. In Q1 2023, 10 billionaires held positions in Sunrun Inc. (NASDAQ:RUN). 

On May 8, Truist analyst Jordan Levy maintained a Buy rating on Sunrun Inc. (NASDAQ:RUN) but trimmed the firm’s price target on the shares from $35 to $30. The stock’s decline after Sunrun Inc. (NASDAQ:RUN) reported a larger than expected loss in Q1 can be attributed to increased spending, unchanged growth projections, the absence of detailed guidance, and general concerns about interest rates. Truist acknowledged a slowdown in California, but believes that Sunrun Inc. (NASDAQ:RUN)’s sales efforts in Q1 will continue to generate momentum throughout the majority of the second half of the year, as non-California regions show signs of strong activity.

According to Insider Monkey’s first quarter database, 27 hedge funds were bullish on Sunrun Inc. (NASDAQ:RUN), compared to 39 funds in the prior quarter. Billionaire Ken Griffin’s Citadel Investment Group is a prominent stakeholder of the company, with a position worth $77.5 million. 

Here is what Horizon Kinetics has to say about Sunrun Inc. (NASDAQ:RUN) in its Q2 2021 investor letter:

“What this table did not cover is valuation. What’s expensive, what’s cheap? A good business that is too expensive is not a good investment. The most expensive business on the table is Sunrun. Sunrun is the nation’s largest residential rooftop solar panel system seller/installer. Sunrun’s valuation might also shed Thumbnail valuation.

To start at the top of the income statement, Sunrun shares trade at 10.3x revenues. The most profitable company in the S&P 500, Microsoft, trades at 13x revenues. Sunrun operates at a loss. Obviously, not only is tremendous growth anticipated, but tremendous profitability, too.

Let’s simply accept that investors have correctly anticipated Sunrun’s future success and make that the starting point for a valuation exercise.

If, 10 years from now, Sunrun is ultimately valued at 25x net income, and if today’s $9.5 billion valuation is appropriate, that would require $380 million of net income ($9,500 million ÷ 25).

Let’s say Sunrun will have the same net profit margin as the average S&P 500 company, which is 10%. That means it would need $3,800 million of sales to generate that level of earnings ($380 mill ÷ 10%).

Since sales are now $920 million, they would have to rise by 4.1x in the next 10 years. That would require annual sales growth of 15.2%. (Click here to read full text)

3. Enphase Energy, Inc. (NASDAQ:ENPH)

Number of Hedge Fund Holders: 55

Number of Billionaire Investors: 12

Enphase Energy, Inc. (NASDAQ:ENPH) is involved in the design, development, manufacturing, and sale of home energy solutions for the solar photovoltaic sector. In the first quarter of 2023, Enphase Energy, Inc. (NASDAQ:ENPH) was found in 12 billionaire portfolios. 

On April 25, Enphase Energy, Inc. (NASDAQ:ENPH) reported a Q1 non-GAAP EPS of $1.37 and a revenue of $726.02 million, outperforming Wall Street estimates by $0.15 and $5.51 million, respectively. In Q2 2023, the company expects revenue to be within a range of $700 million to $750 million, which includes shipments of 80 to 100 megawatt hours of Enphase IQ Batteries. 

Following the release of Enphase Energy, Inc. (NASDAQ:ENPH)’s Q1 results, Barclays analyst Christine Cho maintained an Equal Weight rating on the shares but revised down the price target for the shares from $248 to $226. Barclays believes that Enphase Energy, Inc. (NASDAQ:ENPH) is well-positioned to capture a larger market share in the residential sector, particularly in Europe.

According to Insider Monkey’s first quarter database, 55 hedge funds were bullish on Enphase Energy, Inc. (NASDAQ:ENPH), compared to 63 funds in the prior quarter. Billionaire Philippe Laffont’s Coatue Management is a prominent stakeholder of the company, with 714,442 shares worth $150.2 million.

Aristotle Atlantic Large Cap Growth Strategy made the following comment about Enphase Energy, Inc. (NASDAQ:ENPH) in its Q1 2023 investor letter:

“Enphase Energy, Inc. (NASDAQ:ENPH) designs, develops, manufactures and sells home energy solutions in the U.S. and internationally for the solar industry. The company is the world’s leading manufacturer of microinverters that convert solar-generated D.C. energy to A.C. energy usable in homes and buildings. Enphase introduced the world’s first microinverter system in 2008 and has expanded its offerings to include battery storage systems and proprietary technologies that provide energy monitoring and control services for solar energy systems. It sells its products and solutions directly to solar system distributors, large installers and strategic partners.

We see Enphase having a substantial market share that is gained through a premium product offering, superior customer service and the development of a large and diverse network of solar installers and distributors. The company’s products and services address a growing residential solar market. Coupling battery backup systems with existing and newly installed residential solar systems could accelerate the company’s revenue and earnings growth over the next several years, in our view. Additionally, commercial and international expansion offer additional revenue and earnings upside. Enphase also plans to expand manufacturing capacity in the U.S. during 2023 to benefit from tax incentives related to domestic production included in the Inflation Reduction Act (IRA).”

2. First Solar, Inc. (NASDAQ:FSLR)

Number of Hedge Fund Holders: 39

Number of Billionaire Investors: 13

First Solar, Inc. (NASDAQ:FSLR) offers solar energy solutions using photovoltaic (PV) technology. The company specializes in designing, manufacturing, and selling solar modules made of cadmium telluride, which efficiently convert sunlight into electricity. In Q1 2023, First Solar, Inc. (NASDAQ:FSLR) was part of 13 billionaire portfolios. 

On May 31, Argus analyst Kristina Ruggeri maintained a Buy rating on First Solar, Inc. (NASDAQ:FSLR) and assigned a price target of $261. Additionally, Ruggeri raised the firm’s earnings per share projection for FY24 to $11.97, up from $11.16. This forecast indicates a potential increase of nearly 65% compared to the estimated earnings for FY23. The analyst explained that First Solar, Inc. (NASDAQ:FSLR) is expected to benefit from rising demand due to its customers becoming eligible for tax credits if their projects meet U.S. content requirements. 

According to Insider Monkey’s first quarter database, 39 hedge funds were long First Solar, Inc. (NASDAQ:FSLR), compared to 44 funds in the prior quarter. Billionaire David Elliot Shaw’s D E Shaw held a prominent stake in the company, comprising 506,539 shares worth $110 million. 

Here is what White Brook Capital had to say about First Solar, Inc. (NASDAQ:FSLR) in its Q1 2021 investor letter:

“First Solar (FSLR) and Itron (ITRI), both of which I’ve written about in past In Focus sections, were long-term positions that were sold as their prices exceeded price targets. Both are solid companies that remain on my watchlist, but the opportunity cost of not investing in other potential investments exceeded their potential mid-term returns.”

1. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 82

Number of Billionaire Investors: 15

Tesla, Inc. (NASDAQ:TSLA)’s Energy Generation and Storage segment is responsible for the design, manufacture, installation, commercialization, and leasing of solar energy generation and energy storage products, as well as related services to residential, commercial, and industrial customers. It is one of the top solar stocks on the radar of billionaires. 

Barclays analyst Dan Levy believes that Tesla, Inc. (NASDAQ:TSLA)’s future is characterized by significant growth potential, expecting the company to achieve substantial volume growth and market share gains in the coming years. Levy forecasts that by 2030, Tesla, Inc. (NASDAQ:TSLA)’s volume will reach 6.2 million units, with a global market share of 7%. While Tesla is well-positioned to benefit from the global shift toward electric vehicles and is a leader in software-defined vehicles, the company needs to address the issue of model concentration as it expands its volume. Barclays maintained an Overweight rating on Tesla, Inc. (NASDAQ:TSLA)’s shares with a price target of $220 on May 30. 

According to Insider Monkey’s first quarter database, 82 hedge funds were bullish on Tesla, Inc. (NASDAQ:TSLA), compared to 91 funds in the prior quarter. Billionaire David Shaw’s D E Shaw is a prominent stakeholder of the company, with 6.2 million shares worth $1.3 billion. 

Baron Opportunity Fund made the following comment about Tesla, Inc. (NASDAQ:TSLA) in its Q1 2023 investor letter:

“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells EVs, related software and components, and solar and energy storage products. Following a sharp decline at the end of 2022, Tesla’s stock rebounded in the first quarter of 2023 on investor expectations that Tesla will continue to grow vehicle deliveries and maintain solid gross and operating margins despite a potential recession, competition in China, and vehicle price reductions. We wrote a long piece on Tesla last quarter and refer readers back to it, because for long-term investors not much has changed over the last three months. Tesla did hold its first Investor Day in March, and several Baron analysts and portfolio managers attended. We toured the Austin Gigafactory, drove in a Cybertruck, boarded a Semi truck, and spoke with a wide swath of Tesla senior managers. During the formal presentation, Tesla highlighted, among other things: (1) its broad and deep bench of executive talent supporting CEO Elon Musk; (2) its “Master Plan 3–Sustainable Energy for All of Earth,” which featured EVs, renewable power from solar and wind, and stationary electric storage; (3) its vehicle assembly innovations, including massive casted parts (building Model Y bodies with single front and rear castings, replacing a substantial number of parts and fastening steps), a stainless steel exoskeleton (for Cybertruck), and its next-generation highly efficient “unboxed process” for its next-gen $25,000 vehicle; (4) a future permanent[1]magnet electric motor that will not require any rare earths; and (5) the massive untapped market opportunity for commercial stationary electric storage, branded Megapack, as the world steadily shifts to renewable energy. As long-term shareholders, we have witnessed Tesla exploit its innovative Model 3/Y now-global mass-market platform to increase vehicle deliveries from barely a standing start to over 1.3 million units, while achieving industry-leading margins and reinforcing its iron-clad balance sheet to almost $23 billion in cash (and effectively no recourse debt). We expect Tesla’s next-generation EV and Megapack products to have a similar impact on company results.”

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Disclosure: None. 10 Solar Stocks Billionaires Are Loading Up On is originally published on Insider Monkey.