In this article, we will discuss the 11 Most Undervalued Renewable Energy Stocks to Invest In.
Stocks with a low forward price-to-earnings (P/E) ratio are often viewed as attractive because they suggest investors are paying relatively little for each dollar of expected future earnings. Unlike the trailing P/E ratio, which reflects past profitability, the forward P/E is based on analysts’ projections of future profits. This makes it a more forward-looking valuation metric and a useful tool for identifying stocks that may be undervalued relative to their earnings potential. When a company trades at a low forward P/E despite solid fundamentals or improving growth prospects, it can signal an opportunity for investors to enter at a compelling price before the broader market fully recognizes its value.
One of the primary appeals of a low forward P/E ratio is its ability to highlight potential undervaluation. If the multiple is meaningfully below that of industry peers or the broader market, it may indicate the stock is priced conservatively relative to its expected earnings trajectory. In many cases, when a company’s trailing P/E is higher than its forward P/E, it reflects expectations of rising profits in the coming years. As earnings grow, the valuation effectively becomes more attractive on a forward basis, which can support long-term share price appreciation.
For investors evaluating potential stock purchases, the forward P/E ratio serves as a particularly valuable screening tool because it focuses on future performance rather than historical results. Markets are inherently forward-looking, and valuations tend to adjust based on anticipated growth rather than past achievements. As a result, companies trading at low forward multiples can offer a favorable risk-reward profile, especially if their earnings outlook remains stable or improves.
Low forward P/E stocks are, therefore, especially appealing to value-oriented investors who prioritize a margin of safety and disciplined entry points. Rather than paying premium valuations for anticipated growth, these investors seek companies where expectations are already modest. In some cases, subdued valuations may reflect cautious market sentiment. If the company ultimately delivers stronger-than-expected results, the gap between perception and performance can lead to both earnings-driven gains and valuation multiple expansion, amplifying overall returns.
With this context in mind, here is a list of the 11 most undervalued renewable energy stocks to invest in.
Our Methodology
We used screeners to identify renewable energy stocks that are trading below a forward P/E of 15, and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds. To make this list easier to navigate, we have ranked stocks in descending order of their forward P/E.
Why are we interested in the stocks that hedge funds pile into? 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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
11 Most Undervalued Renewable Energy Stocks to Invest In
11. Dominion Energy, Inc. (NYSE:D)
Forward P/E: 16.55
Dominion Energy, Inc. (NYSE:D) is among the most undervalued renewable energy stocks to invest in. On February 25, TD Cowen raised the firm’s price target on Dominion Energy to $69 from $65 while maintaining a Hold rating on the shares. The firm noted that Dominion introduced 2026 earnings guidance of $3.45 to $3.69 per share and increased its five-year capital investment plan by roughly $15 billion. Management also reaffirmed its long-term earnings growth target of 5% to 7%, with the company expecting to reach the upper half of that range beginning in 2028 as infrastructure investments and regulatory initiatives take effect.
Previously, on February 20, Morgan Stanley increased its price objective on Dominion Energy, Inc. (NYSE:D) to $67 from $63 while maintaining an Equal Weight rating. The firm said it raised price estimates across North American regulated utilities, diversified utilities, and independent power producers under its coverage. Analysts noted that the utility sector lagged the performance of the S&P 500 during January. Morgan Stanley’s fourth-quarter preview suggested that earnings calls would likely include balanced discussions about the rapid expansion of data center pipelines, particularly in the context of electricity affordability and political considerations surrounding power demand growth.
Dominion Energy, Inc. (NYSE:D) provides regulated electricity service to approximately 3.6 million homes and businesses across Virginia, North Carolina, and South Carolina. The company also supplies regulated natural gas service to roughly 500,000 customers in South Carolina. Dominion Energy has been actively transitioning from a traditional utility model toward becoming a significant player in renewable energy, with major investments in solar, wind, and nuclear power aimed at achieving net-zero emissions over the long term.
10. Enphase Energy, Inc. (NASDAQ:ENPH)
Forward P/E: 16.37
On March 5, Vistra announced the expansion of its battery aggregation program to include Enphase Energy, Inc. (NASDAQ:ENPH)’s IQ Batteries. The initiative will further scale Vistra’s residential virtual power plant and help strengthen grid reliability across Texas. The program, known as Battery Rewards, is offered through Vistra’s flagship retail electricity brand TXU Energy. It allows eligible Enphase customers to earn financial incentives by exporting stored battery power to the grid during periods of high electricity demand.
According to Vistra Vice President of Energy Transition Solutions Sam Sen, the program reflects the increasing importance of demand-side energy resources as electricity consumption rises across Texas. By enabling distributed batteries to provide additional power during critical grid events, the initiative can help meet growing demand without requiring new infrastructure construction. The approach highlights how virtual power plant models are becoming a key component of modern grid reliability strategies.
On March 3, Enphase Energy, Inc. (NASDAQ:ENPH) separately announced a partnership with Capital Good Fund to expand deployments of its IQ microinverter products for residential and small commercial solar projects across the United States. The companies said the collaboration is expected to support roughly 24 megawatts of projects in Georgia and Pennsylvania, with much of the volume tied to mission-aligned commercial installations. Enphase stated that the deployments will include its IQ8P-3P and IQ9N-3P microinverters manufactured in the United States.
Enphase Energy, Inc. (NASDAQ:ENPH) also recently began production shipments of its IQ9 Commercial Microinverter, describing it as its first microinverter built using gallium nitride technology and designed for three-phase 480Y/277-volt grid configurations.
Enphase Energy, Inc. (NASDAQ:ENPH) is a global energy technology company that develops semiconductor-based microinverter systems, battery storage solutions, and software platforms that support solar energy generation and management.
9. Shoals Technologies Group, Inc. (NASDAQ:SHLS)
Forward P/E: 11.26
On February 25, Mizuho raised its price target on Shoals Technologies Group, Inc. (NASDAQ:SHLS) to $8 from $7 while maintaining a Neutral rating on the shares. The firm said the company’s sales performance continues to exceed expectations, although margins declined to 31.6% in the fourth quarter due to tariffs, legal expenses, and higher logistics costs. The same day, Guggenheim Partners analyst Joseph Osha lowered the firm’s price target to $11 from $12 while maintaining a Buy rating. Guggenheim updated its financial estimates following the company’s fourth-quarter report, but suggested that the market reaction to the results may be overly negative.
Shoals Technologies Group, Inc. (NASDAQ:SHLS) reported fourth-quarter 2025 revenue of $148.3 million, representing a 39% year-over-year increase driven primarily by stronger demand for utility-scale solar projects. Gross profit rose to $46.9 million from $40.2 million in the prior-year quarter, although the gross margin declined to 31.6% from 37.6%. The company said the margin contraction was largely caused by higher material costs as well as approximately $3.3 million in duties and tariffs that were not present in the previous year. Adjusted EBITDA increased to $30.3 million from $26.4 million, while adjusted diluted earnings per share rose to $0.10 compared with $0.08 a year earlier.
For the full-year 2025, Shoals Technologies Group, Inc. (NASDAQ:SHLS) reported revenue growth of 19%, reaching $475.3 million. The company also ended the year with record backlog and awarded orders totaling $747.6 million, reflecting sustained demand for its solar infrastructure products across both domestic and international markets. Looking ahead, the company expects revenue between $560 million and $600 million in 2026, along with adjusted EBITDA ranging from $110 million to $130 million. Management also issued first-quarter guidance, noting that changing customer order patterns in the utility-scale solar market could create short-term headwinds.
Shoals Technologies Group, Inc. (NASDAQ:SHLS) provides electrical balance-of-system solutions for solar power installations, battery storage systems, and related energy infrastructure projects.
8. HA Sustainable Infrastructure Capital, Inc. (NYSE:HASI)
Forward P/E: 10.90
On March 2, UBS raised the firm’s price target on HA Sustainable Infrastructure Capital, Inc. (NYSE:HASI) to $44 from $40 while maintaining a Buy rating on the shares. The firm said it updated its financial model following the company’s fourth-quarter earnings report, reflecting revised expectations for the firm’s capital deployment and investment pipeline in sustainable infrastructure projects.
On February 27, HA Sustainable Infrastructure Capital, Inc. (NYSE:HASI) issued $600 million of 7.125% Green Junior Subordinated Notes due in 2056. The notes are guaranteed by several affiliated entities and are structured as subordinated unsecured debt that ranks below senior obligations but above equity in the capital structure. The company said it intends to initially use the proceeds to repay borrowings under its unsecured revolving credit facility and commercial paper programs or potentially redeem a portion of its 8.00% Senior Notes due 2027.
After the temporary use of proceeds, HA Sustainable Infrastructure Capital, Inc. (NYSE:HASI) will allocate an equivalent amount of capital toward new or existing eligible green projects, reinforcing its role as a provider of financing for renewable energy and sustainable infrastructure development. The securities carry a fixed 7.125% coupon until November 15, 2031, after which the interest rate will reset every five years based on the five-year U.S. Treasury rate plus 3.478%, with a floor rate of 7.125%. The notes also allow the company to defer interest payments under certain conditions, with unpaid interest compounding until maturity. Optional redemption provisions tied to specific dates, tax or rating agency events, and changes of control provide additional flexibility for capital structure management.
Founded in 1981, HA Sustainable Infrastructure Capital, Inc. (NYSE:HASI) is a Maryland-based investment firm that focuses on financing energy efficiency, renewable energy, and climate-positive infrastructure projects.
7. TotalEnergies SE (NYSE:TTE)
Forward P/E: 10.37
On March 12, Piper Sandler analyst Ryan Todd raised the firm’s price target on TotalEnergies SE (NYSE:TTE) to $92 from $74 while maintaining a Neutral rating. The firm revised its forward estimates after increasing its mid-cycle forecast for West Texas Intermediate crude oil prices by $5 per barrel. The adjustment reflects the potential long-term effects of geopolitical tensions involving Iran, which Piper’s commodity strategy team believes could tighten global oil balances by approximately 2 million barrels per day relative to previous expectations.
The same day, TotalEnergies SE (NYSE:TTE) said it had begun shutting down or preparing to shut down certain production operations in Qatar, Iraq, and offshore areas of the United Arab Emirates following requests from shareholders to address the company’s exposure to the Middle East. These facilities represent roughly 15% of TotalEnergies’ total output. However, the company noted that its onshore UAE production remains unaffected because exports from those assets are routed through the Fujairah Oil Terminal.
TotalEnergies SE (NYSE:TTE) also stated that barrels produced in the Middle East generate lower cash flow from operations compared with the company’s broader portfolio due to higher taxation levels. As a result, the 15% of production tied to those assets accounts for only about 10% of upstream cash flow. The company emphasized that most of its production growth in 2026 is expected to come from assets located outside the region. Management noted that an $8 increase in the Brent Crude Oil price would be sufficient to offset the projected 2026 cash flow contributions from the company’s Iraq, Qatar, and offshore UAE assets at an oil price of $60 per barrel.
TotalEnergies SE (NYSE:TTE) is a global integrated energy company headquartered in Courbevoie, France. The company produces oil, natural gas, biofuels, and renewable electricity while operating across exploration, refining, chemicals, and energy marketing businesses.
6. Sunrun Inc. (NASDAQ:RUN)
Forward P/E: 9.70
On March 3, Freedom Capital downgraded Sunrun Inc. (NASDAQ:RUN) to Hold from Buy with a price target of $12, down from $22.70. The firm said the company reported fourth-quarter revenue well above consensus expectations but issued a neutral outlook for 2026. According to the analyst, Sunrun’s valuation appears elevated relative to peers in the residential solar sector. The same day, GLJ Research lowered its price target on Sunrun to $6.73 from $15.89 while maintaining a Sell rating. The firm argued that the stock appears materially overvalued, suggesting that current market pricing implies a cash-flow trajectory that underlying fundamentals do not support.
Sunrun Inc. (NASDAQ:RUN) reported its fourth-quarter and full-year 2025 results on February 26, 2026. Fourth-quarter revenue increased 124% year over year to $1.16 billion, while net income attributable to common stockholders reached $103.6 million. The company also generated $187 million in cash during the quarter. Management said the results reflected disciplined margin management, higher upfront net subscriber values, and balance-sheet improvements, including the reduction of recourse debt and an increase in unrestricted cash.
Sunrun Inc. (NASDAQ:RUN) added that revenue growth from energy systems and product sales was primarily driven by a transaction signed in the third quarter of 2025 involving the sale of newly originated solar and battery storage systems to a third party.
Sunrun Inc. (NASDAQ:RUN) is a U.S. residential energy company focused on solar power, battery storage, and home energy services. The firm designs, installs, and maintains solar systems that allow homeowners to access renewable electricity primarily through subscription-based agreements, making it one of the leading providers of residential solar and battery solutions in the United States.
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