In this article, we will take a look at the 11 best alternative energy stocks to buy right now.
The world’s dependence on hydrocarbons as its primary source of power ever since the invention of the internal combustion engine, the use of coal and then oil and gas for electricity generation and the rise of aviation has grown to an extent that a significant number of researchers now believe that this use is unsustainable. The rise of climate change advocacy has shifted the attention of Western governments towards renewable energy sources, which are not only abundantly available in the environment and therefore do not carry the risk of exhaustible resources, but they also have a reduced carbon footprint. This ensures that less carbon dioxide is emitted in the atmosphere which in turn reduces the amount by which the Earth’s surface warms up. This in turn prevents impending disasters that stem from a chain cycle of cascading events, such as polar ice caps melting, sea levels rising and record temperatures alongside historic droughts.
The governmental focus on renewable energy, especially in the United States has resulted in significant corporate focus in the alternative energy industry. The rise of Palo Alto, California-based electric vehicle and renewable energy products manufacturer Tesla, Inc is a testament to the shift in American perception when it comes to alternative energy powering their daily lives. Tesla’s rise is mirrored by its smaller competitors in China, which has also started to incentivize electric vehicle production. China’s crackdown on Bitcoin mining which led to the cryptocurrency’s price drops earlier this year also highlights the country’s growing focus on climate-friendly sectors.
Indicating the shifting trends for power generation, research conducted by Deloitte highlights that in December last year, the share of renewable sources in power generation exceeded that of coal for 153 days. This marked a year-on-year increase of 292%, as in December 2019, the share had exceeded for only 39 days.
Research by 360 Research Reports focuses on the entire alternative energy segment, as it provides eye-popping estimates for the industry size and future growth. The facts covered in this research outline that the sector stood at $626 billion by the end of last year, and even though a modest compound annual growth rate (CAGR) of 9.1%, it will sit at a whopping $1.15 trillion by 2027.
The International Energy Agency (IEA), which is a consortium of governments, and plays an advisory role to governments, estimates that by 2022, the world will have 280 Gigawatts of alternative energy capacity. This will account for 90% of all capacity additions in the world, and photovoltaic additions, commonly referred to as solar energy generation, will form the bulk, with a little over 160 Gigawatts of installed capacity addition.
After China, Europe is expected to become a major player in the alternative energy segment, becoming the second largest alternative energy market in 2022 according to the IEA.
Research from Allied Markets Research mirrors the figures shared by 360 Research Reports. Allied Markets outlines the size of the alternative energy market at $928 billion in 2017 and expects it to grow at a CAGR of 6.1% to sit at $1.15 trillion by 2025. It also believes that the hydroelectric power generation sector will be the strongest and largest contributor to this growth, with the segment expected to account for more growth than wind, bio energy, solar and geothermal combined.
Photo by Science in HD on Unsplash
Our Methodology
In order to sift out the best alternative energy stocks out there, we have decided to focus on share price growth as our determining criteria. As highlighted above, the alternative energy sector is expected to grow by leaps in the future, and share price growth provides an excellent gauge of the companies that have managed to capitalize the growing global interest in renewable energy. We also took into account the number of hedge funds having stakes in each stocks based on the data of about 873 funds tracked by Insider Monkey.
Why pay attention to hedge fund sentiment while choosing stocks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
11 Best Alternative Energy Stocks To Buy Right Now
11. Renewable Energy Group, Inc. (NASDAQ:REGI)
Share Price Growth Over the Year: 0.38%
Number of Hedge Fund Holders: 17
Renewable Energy Group, Inc. (NASDAQ: REGI) is headquartered in Ames, Iowa, United States, and it is responsible for manufacturing and producing biodiesel, which is an environmentally friendly version of the commonly used petroleum-derived fuel. It earned $2 billion in revenue last year and it provides a wide array of biodiesel fuels that cover the transportation, heating, and power generation and the industrial sectors. It also offers gasoline and ethanol blends of its biodiesel. Renewable Energy Group, Inc. (NASDAQ: REGI) is also the largest biodiesel producer in the United States and it operated 12 biodiesel plants across the world producing 495 million gallons in 2019.
10. NextEra Energy, Inc. (NYSE:NEE)
Share Price Growth Over the Year: 17.51%
Number of Hedge Fund Holders: 59
NextEra Energy, Inc. (NASDAQ: NEE) is headquartered in Juno Beach, Florida and its primary markets are the United States and Canada. The company markets itself as the world’s largest producer of solar and wind energy, and it generated 2.2 Gigawatts of electricity through solar panels by the end of last year through its 32 solar generation facilities. The bulk of its customer accounts were for residential users in 2020, and the company also operates four nuclear plants in Florida, with a total power generation capacity of 3.5 Gigawatts. NextEra Energy, Inc. (NASDAQ: NEE)’s wind power generation forms the bulk of its fuel type generation mix, through 18.6 Gigawatts of generating capacity via plants located in 20 American states and four Canadian provinces.
Like Brookfield Renewable Partners L.P. (NYSE: BEP), Canadian Solar Inc. (NASDAQ: CSIQ) and Renewable Energy Group, Inc. (NASDAQ: REGI), NextEra Energy, Inc. (NASDAQ: NEE) is one of the notable alternative energy stocks getting the attention of hedge funds.
9. Canadian Solar Inc. (NASDAQ:CSIQ)
Share Price Growth Over the Year: 15.72%
Number of Hedge Fund Holders: 13
Canadian Solar Inc. (NASDAQ: CSIQ) is headquartered in Guelph, Ontario, Canada and it is responsible for manufacturing and selling solar panels and also for operating solar power plants. The company has solar panel electricity production facilities all over the globe, including countries such as the United States, China, India, Australia, Japan, Brazil, Canada, Italy, Germany, the United Kingdom and France. It has shipped over 59 Gigawatts of solar panels, plans to reach 22.7 Megawatts of solar module capacity by the end of this year and 22 Gigawatt projects in its pipeline alongside 20 manufacturing facilities in the Americas and Asia.
8. Clearway Energy, Inc. (NYSE:CWEN)
Share Price Growth Over the Year: 26.15%
Number of Hedge Fund Holders: 21
Clearway Energy, Inc. (NYSE: CWEN) is an alternative energy company located in New Jersey, United States. It focuses on the design, development, financing and execution of energy projects. Additionally, it also operates wind and solar power generation assets with an installed capacity of 5 Gigawatt. Clearway Energy, Inc. (NYSE: CWEN)’s projects are located all over the United States, with wind power forming the bulk of its assets in the form of 2.8 Gigawatts of generation capacity.
Like Brookfield Renewable Partners L.P. (NYSE: BEP), Canadian Solar Inc. (NASDAQ: CSIQ), NextEra Energy, Inc. (NASDAQ: NEE) and Renewable Energy Group, Inc. (NASDAQ: REGI), Clearway Energy, Inc. (NYSE: CWEN) is one of the notable alternative energy stocks getting the attention of hedge funds.
7. Brookfield Renewable Partners L.P. (NYSE:BEP)
Share Price Growth Over the Year: 24.73%
Number of Hedge Fund Holders: 20
Brookfield Renewable Partners L.P. (NYSE: BEP) is a limited partnership by one of the world’s largest and oldest asset management firms, Brookfield Asset Management Inc. The company was founded in 2011 and it is headquartered in Toronto, Ontario, Canada. Brookfield Renewable Partners L.P. (NYSE: BEP) owns hydroelectric power plants in the United States and wind power plants in Europe. It also has significant ownership stakes in other alternative energy firms all over the world.
6. Atlantica Sustainable Infrastructure plc (NASDAQ:AY)
Share Price Growth Over the Year: 31.94%
Number of Hedge Fund Holders: 14
Atlantica Sustainable Infrastructure plc (NASDAQ: AY) is based in the United Kingdom and operates alternative energy platforms all across the globe in regions such as North America, South America and Europe, Middle East and Asia (EMEA). The bulk of the company’s assets are in the renewable energy category, with a total capacity of 2 Gigawatts. The bulk of this capacity is solar, with wind energy also playing an important role by contributing 343 Megawatts.
Like Brookfield Renewable Partners L.P. (NYSE: BEP), Canadian Solar Inc. (NASDAQ: CSIQ), NextEra Energy, Inc. (NASDAQ: NEE) and Renewable Energy Group, Inc. (NASDAQ: REGI), Atlantica Sustainable Infrastructure plc (NASDAQ: AY) is one of the notable alternative energy stocks getting the attention of hedge funds.
5. Vestas Wind Systems A/S (OMXC:VWS.CO)
Share Price Growth Over the Year: 29.95%
Number of Hedge Fund Holders: N/A
Vestas Wind Systems A/S (VWS.CO) is a Dutch manufacturer, seller, and installer of wind power generation turbines. It is one of the oldest such companies in the world, after being founded in 1945 and entering the industry in 1975. The company was also the largest wind turbine provider in the world in 2019, with a market share of 17.7% in a sector jam-packed with firms from all over the globe.
Vestas Wind Systems A/S (VWS.CO)’s shares trade in Copenhagen, and on September 14th, 2020, they closed at a price of DKK189.96. Since they, based on their closing price of DKK260.80 on September 14th, 2021, they have gained roughly 37% over the year.
4. SolarEdge Technologies, Inc. (NASDAQ:SEDG)
Share Price Growth Over the Year: 45.10%
Number of Hedge Fund Holders: 37
SolarEdge Technologies, Inc. (NASDAQ: SEDG) is incorporated in Delaware, United States, and headquartered in Herzliya, Israel. The company is responsible for providing products that work alongside solar panels to improve their efficiency and increase energy output. It is also known for its partnerships with Tesla Inc and Schneider Electric, to provide the pair with inverters and other associated technology products for use with solar panels. In addition to providing products to companies, SolarEdge Technologies, Inc. (NASDAQ: SEDG) also targets residential and general users through selling them inverters and modules, alongside monitoring platforms.
SolarEdge Technologies, Inc. (NASDAQ: SEDG)’s share price closed at $196.12 on September 14th, 2020 and marked for 39.56% yearly growth after closing at $273.84 on September 13th, 2021.
3. First Solar, Inc. (NASDAQ:FSLR)
Share Price Growth Over the Year: 55.47%
Number of Hedge Fund Holders: 31
First Solar, Inc. (NASDAQ: FSLR) is one of the oldest solar companies in the world since it was founded in 1990 and is currently headquartered in Tempe, Arizona. The company reported $3 billion in revenue last year and has a solar panel manufacturing capacity of 8 Gigawatts. First Solar, Inc. (NASDAQ: FSLR) also expects strong future growth, as it expects its global installed capacity to stand at 1.3 Terrawatts by the end of 2025. Capacity growth in the United States and India form the backbone of the company’s optimistic 2025 growth estimate.
2. Enphase Energy, Inc. (NASDAQ:ENPH)
Share Price Growth Over the Year: 111.05%
Number of Hedge Fund Holders: 44
Enphase Energy, Inc. (NASDAQ: ENPH) is headquartered in Fremont, California and it sells inverters, energy storage and software for residential users to monitor their power generation and usage levels. Its products are not limited to solar generation only as it also caters to users who use electricity from the congenial power grid. However, Enphase Energy, Inc. (NASDAQ: ENPH) allows its residential customers to design their solar home solutions themselves and it offers innovative solutions such as the ability to capture energy from the Sun even when sunlight is suboptimal.
1. ReneSola Ltd (NYSE:SOL)
Share Price Growth Over the Year: 182.35%
Number of Hedge Fund Holders: 4
As its name implies, ReneSola Ltd (NYSE: SOL) is involved in developing and operating solar power projects. The company also provides consulting and procurement services to other firms that are looking to set up their own solar power projects. As of June last year, it is operating 245 Megawatts of solar power projects all over the globe and has been responsible for developing 745 Megawatts of projects. It earned $73.5 million through revenue last year, marking for a 38% drop from 2019. ReneSola Ltd (NYSE: SOL) intends to dramatically scale up its pipeline projects by the end of this year and anticipates them to stand at 2 Gigawatt by 2021 end.
You can also take a peek at the 10 Tax-Advantaged MLPs with High Dividend Yields and 11 Best IPO Stocks to Buy Now.
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Disclosure: None. 11 Best Alternative Energy Stocks to Buy Right Now is originally published on Insider Monkey.
