In this article, we discuss 10 solar stocks billionaires are loading up on. If you want to see more stocks in this selection, check out 5 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.
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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.”
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Disclosure: None. 10 Solar Stocks Billionaires Are Loading Up On is originally published on Insider Monkey.
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