In this article, we will discuss 10 best wind power and solar stocks to buy.
Rallying oil prices, global warming, and the global transition toward electrification to achieve carbon neutrality are only a few factors to name that are causing the demand for alternative fuels to skyrocket. Consequently, investors are allocating sizeable portions of their investment portfolios to wind and solar stocks.
Renewable Energy Market Analysis: Size, Key Trends, Drivers, and Major Players
According to a market report by Allied Market Research, a leading market intelligence agency, the global renewable energy market was valued at $881.7 billion in 2020 and is expected to grow to $1.97 trillion by 2030, at a CAGR of 8.4% over the forecasted period. Precedence Research, another prominent market intelligence firm, reported that the global renewable energy market grew to $952.16 billion in 2021, and is on an upward trajectory to hit $1.99 trillion by 2030 at a CAGR of 8.6% from 2022 to 2030. Both reports identified that currently, renewable energy serves a mere 7% of the world’s energy demands, and as investments in solar, wind, and hydroelectric power infrastructure rise, the demand for renewable energy is expected to grow at an exponential rate in the foreseeable future.
By region, the Asia-Pacific dominated the renewable energy market share, having a share of approximately 35% in 2020 and 2021. It is forecasted that the North American market for renewable energy will grow significantly by 2030, in the wake of government regulations regarding clean fuel standards, biofuel production, tax incentives, and US green energy targets. Moreover, it was found that the costs for solar installations plummeted by 85% in the past decade, making it one of the most cost-effective energy sources. The innovations in solar energy storage and expansion of community solar projects in American markets are expected to further drive this growth.
Photo by Jason Blackeye on Unsplash
The major players in the wind and solar markets include Enphase Energy, Inc. (NASDAQ:ENPH), NextEra Energy, Inc. (NYSE:NEE), and General Electric Company (NYSE:GE).
Our Methodology
To come up with our list of the 10 best wind power and solar stocks to buy, we read multiple research reports published by accredited market intelligence agencies and identified the major players highlighted in them. We narrowed down our selection to 10 companies that were the most active in the renewable energy industry. We gauged “activeness” from the recent news that presented upcoming growth catalysts for each company.
Furthermore, we gave weight to the analyst and investor sentiment for each stock before naming it among the 10 best wind power and solar stocks to buy. We believe both hedge fund and analyst sentiment to be critical indicators of a stock’s performance, and believe these metrics can benefit our readership in making informed investment decisions.
Best Wind Power and Solar Stocks To Buy
10. Northland Power Inc. (OTC:NPIFF)
Number of Hedge Fund Holders: N/A
Northland Power Inc. (OTC:NPIFF) operates as an independent power producer and develops, builds, owns, and operates clean and green power projects in North America, Europe, Latin America, and Asia. The company produces electricity from renewable resources, such as wind, solar, or hydropower, as well as clean-burning natural gas and biomass. The company is piling into wind projects and announced a strategic collaboration with RWE Renewables in January 2022. Under the terms of the agreement, Northland Power Inc. (OTC:NPIFF) will co-develop multiple offshore wind projects in the German North Sea with a total gross capacity of 1.3GW.
On February 8, 2022, Northland Power Inc. (OTC:NPIFF) announced that it plans to complete roughly 366 MW of additional capacity in construction in 2022. The company also has almost 3 GW worth of projects that are scheduled for completion within the next two years. Northland Power Inc. (OTC:NPIFF) is on its way to increase its total gross capacity by two-folds to 6.5 GW by 2027, which makes it one of the best wind and solar stocks to buy now.
Analysts are becoming keen on Northland Power Inc.’s (OTC:NPIFF) long-term drivers and are recognizing the company’s already achieved milestones. In April 2022, National Bank analyst Rupert Merer raised his price target on Northland Power Inc. (OTC:NPIFF) to C$45 from C$44 and reiterated an Outperform rating on the shares.
Northland Power Inc. (OTC:NPIFF) is a prominent name in the wind and solar industry. Other stocks that are dedicated to driving shareholder returns include Enphase Energy, Inc. (NASDAQ:ENPH), NextEra Energy, Inc. (NYSE:NEE), and General Electric Company (NYSE:GE).
9. SunPower Corporation (NASDAQ:SPWR)
Number of Hedge Fund Holders: 20
SunPower Corporation (NASDAQ:SPWR) is a solar technology and energy services provider that offers solar, storage, and home energy solutions to customers in the United States and Canada. This May, the company announced a partnership with leading furniture designer, IKEA U.S., to allow customers of IKEA to purchase home solar solutions and generate and store their own renewable energy. SunPower Corporation (NASDAQ:SPWR) is making strides in the renewables sector and is becoming a prominent name, which makes it the ninth-best wind power and solar stock to buy.
On May 5, SunPower Corporation (NASDAQ:SPWR) reported its earnings for the fiscal first quarter of 2022 in which the company outperformed revenue estimates by $32.72 million. According to the company’s report, SunPower Corporation (NASDAQ:SPWR) registered an EPS of $0.02 and generated revenues of $350.28 million, up 14.32% year over year from $306.40 million.
Investment Bank Piper Sandler is watching SunPower Corporation (NASDAQ:SPWR) closely. On April 21, analyst Kashy Harrison raised her price target on SunPower Corporation (NASDAQ:SPWR) to $24 from $20 and maintained a Neutral rating on the shares.
By the end of the fourth quarter of 2021, 20 hedge funds were long SunPower Corporation (NASDAQ:SPWR). The total stakes of these funds were valued at roughly $118 million. Of these, D E Shaw was the most prominent stakeholder in the company, having stakes of $67.41 million at the end of December 2021.
8. TPI Composites, Inc. (NASDAQ:TPIC)
Number of Hedge Fund Holders: 21
TPI Composites, Inc. (NASDAQ:TPIC) is a leading manufacturer of wind blades, and related precision molding and assembly systems for the wind energy market. The company has made over 75,000 wind blades as of 2001 and boasts an excellent field performance record, which makes it rank among the best wind power and solar stocks to buy now.
Roth Capital analyst Justin Clare recently raised his price target on TPI Composites, Inc. (NASDAQ:TPIC) to $16 from $11 and also upgraded the stock Buy from Neutral. Clare raised his profitability forecasts for 2022 and 2023 and told investors that he sees potential for the TPI Composites, Inc. (NASDAQ:TPIC) to benefit from positive policy developments in Europe and the U.S. which will drive demand for its products over the medium and long term.
TPI Composites, Inc. (NASDAQ:TPIC) is rising in popularity among elite hedge funds. Insider Monkey found 21 hedge funds that held stakes in the company at the close of Q4 2021. The total value of these stakes came in at $40.09 million.
As of March 31, 2022, Sustainable Insight Capital Management is the leading stakeholder in TPI Composites, Inc. (NASDAQ:TPIC). The investment covers 0.11% of the fund’s 13F portfolio.
Investment management firm Saturna Capital recently published its “Amana Funds” fourth-quarter 2021 investor letter in which it shared its insights on TPI Composites, Inc (NASDAQ:TPIC). Here is what the firm said:
“For both the fourth quarter and the full year, the Fund’s largest detractors were not concentrated to any singular industry or area. The dispersion of these detractors across geographies shows how investing in emerging markets can be idiosyncratic. TPI Composites was the Fund’s largest detractor in the fourth quarter and for the full year. A maker of wind turbine blades, TPI was particularly hard-hit by commodity inflation and challenged supply chains, leading the company to recapitalize in the fourth quarter. While the company continues to face near-term headwinds, this recapitalization should support the company’s longterm position as a leading supplier to the world’s largest wind turbine manufacturers.”
7. Brookfield Renewable Partners L.P. (NYSE:BEP)
Number of Hedge Fund Holders: 21
Brookfield Renewable Partners L.P. (NYSE:BEP) owns a 21,000 MW portfolio of renewable power generating facilities that spans over North America, Colombia, Brazil, Europe, India, and China. The company generates electricity through hydroelectric, wind, solar, distributed generation, pumped storage, cogeneration, and biomass sources. The company’s strong portfolio with a hefty gross capacity makes it a leader in the renewables space.
On May 6, Brookfield Renewable Partners L.P. (NYSE:BEP) released earnings for the fiscal fiscal first quarter of 2022. The company saw revenue growth of 11.37% year over year and reported quarterly revenues of $1.14 billion, outperforming market consensus by $58.29 million.
Investment bank TD Securities expressed its bullish sentiment towards Brookfield Renewable Partners L.P. (NYSE:BEP) post the company’s robust Q1 results. Analyst Sean Steuart upgraded the stock to Buy from Hold and reiterated his $41 price target on the shares. Steuart contended that he sees the company well-positioned to withstand near-term sector headwinds and gain from long-term tailwinds such as the rising adoption of clean power and hefty investments in global decarbonization efforts.
Hedge funds are upping their stakes in Brookfield Renewable Partners L.P. (NYSE:BEP). At the end of the fourth quarter, 21 hedge funds held long positions in Brookfield Renewable Partners L.P. (NYSE:BEP) which were worth $234.36 million. This is compared to 17 positions in the preceding quarter with stakes worth $145.16 million. The hedge fund sentiment for the stock is positive.
As of March 31, 2022, Quaero Capital is the dominating shareholder in Brookfield Renewable Partners L.P. (NYSE:BEP). The fund’s stakes totaled $1.25 million which represents 0.78% of its investment portfolio.
Here is what ClearBridge Investments had to say about Brookfield Renewable Partners L.P. (NYSE:BEP) in its “Global Infrastructure Income Strategy” first-quarter 2022 investor letter:
“Brookfield Renewable is a pure-play renewables operator and developer headquartered in Canada, focused on international hydro, solar, wind and storage technology. As more private and public institutions announce ambitious carbon reduction initiatives, Brookfield Renewable’s globally diversified, multi- technology renewables business makes it an attractive partner. Brookfield’s development pipeline stands at 18,000 MWs, providing confidence the company can meet its targeted double- digit cash flow growth through to 2025. The market narrative around the energy transition and energy security, along with increasing fossil fuels prices which have driven greater focus on switching to renewables, helped Brookfield shares in the quarter.”
6. Sunrun Inc. (NASDAQ:RUN)
Number of Hedge Fund Holders: 31
Sunrun Inc. (NASDAQ:RUN) is a leading American provider of residential solar panels and battery storage solutions. On May 5, the company raised its fiscal year 2022 view of installed solar energy capacity to 25%, up from the company’s prior view of 20%, which implies at least 990 MW worth of installments. By the end of Q2 2022, Sunrun Inc. (NASDAQ:RUN) expects installations to range between 235 MW and 245 MW.
Morgan Stanley analyst Stephen Byrd shared his views on the recent announcement made by Sunrun Inc. (NASDAQ:RUN) and said it was a “significant positive surprise to the investment community”. The analyst noted that the company’s newly issued guidance exceeds consensus and his estimate of about 950 MW, and reiterated an Overweight rating and $89 price target on the stock.
On May 4, 2022, Sunrun Inc. (NASDAQ:RUN) announced that its quarterly revenues grew 48.09% year over year in the fiscal first quarter of 2022. The company reported revenues of $495.78 million and beat estimates by $94.18 million. The company is experiencing strengthening demand for its products even amidst global sector headwinds.
Insider Monkey found that 31 hedge funds held stakes in the company at the close of Q4 2021. The total value of these stakes amounted to $1.02 billion.
Quaero Capital is the top shareholder in Sunrun Inc. (NASDAQ:RUN) as of the end of March 2022. The fund’s stakes were valued at $2.95 million, up 11% from its Q4 2021 stakes.
Sunrun Inc. (NASDAQ:RUN) is becoming a compelling stock option for elite hedge fund investors. Other stocks that investors are bullish on are Enphase Energy, Inc. (NASDAQ:ENPH), NextEra Energy, Inc. (NYSE:NEE), and General Electric Company (NYSE:GE).
5. SolarEdge Technologies, Inc. (NASDAQ:SEDG)
Number of Hedge Fund Holders: 34
SolarEdge Technologies, Inc. (NASDAQ:SEDG) designs, develops, and sells direct current optimized inverter systems for solar photovoltaic installations worldwide. The company operates through five business segments: Solar, Energy Storage, e-Mobility, Critical Power, and Automation Machines.
On May 2, SolarEdge Technologies, Inc. (NASDAQ:SEDG) announced earnings for the fiscal first quarter of 2022. The company registered an EPS of $1.20 and generated revenues of $655.08 million, up 61.55% year over year, and outperformed revenue consensus by $20.75 million.
Shortly after SolarEdge Technologies, Inc. (NASDAQ:SEDG) reported Q1 2022 earnings, Needham analyst Vikram Bagri raised his price target on the stock to $390 from $347 and maintained a Buy rating on the shares. Bagri further noted the company’s market-beating Q1 performance and told investors that the company is well-positioned to experience growing margins in the second half of 2022, citing robust demand to be a key driver. SolarEdge Technologies, Inc. (NASDAQ:SEDG) is among the 5 best wind power and solar stocks to buy.
SolarEdge Technologies, Inc. (NASDAQ:SEDG) is becoming a popular stock pick among investor circles. At the end of the fourth quarter of 2021, 34 hedge funds were long SolarEdge Technologies, Inc. (NASDAQ:SEDG) with stakes of $766.59 million. This is compared to 33 hedge funds in the third quarter with stakes worth $594.46 million. The hedge fund sentiment for the stock is positive.
As of March 31, 2022, Montanaro Asset Management is the most bullish hedge fund on SolarEdge Technologies, Inc. (NASDAQ:SEDG). The fund’s stakes were valued at $50.54 million, which represents 6.22% of its 13F portfolio.
ClearBridge Investments, an investment management firm, published its first-quarter 2022 investor letter, in which it shared its insights on SolarEdge Technologies, Inc. (NASDAQ:SEDG). Here is what the firm said:
“SolarEdge Technologies (NASDAQ:SEDG) is a key solar holding that should be able to take advantage of greater incentives for solar installations in many geographies. The company was also a strong contributor for the quarter, overcoming pressures of a higher discount rate on their strong projected future earnings, raw material inflation and supply chain challenges as their long-term value was reaffirmed.”
4. First Solar, Inc. (NASDAQ:FSLR)
Number of Hedge Fund Holders: 36
First Solar, Inc. (NASDAQ:FSLR) is a prominent provider of photovoltaic solar energy solutions in the United States, Japan, France, Canada, India, Australia, and internationally. Hedge funds are piling into First Solar, Inc. (NASDAQ:FSLR). According to Insider Monkey’s database, 36 hedge funds held stakes in First Solar, Inc. (NASDAQ:FSLR) at the end of the fourth quarter of 2021. These stakes were valued at $199.91 million.
On April 28, 2022, First Solar, Inc. (NASDAQ:FSLR) released its earnings report for the fiscal first quarter of 2022. The company reported a loss per share of $0.42 but outperformed EPS estimates by $0.02. Moreover, the company reported quarterly revenues of $367.04 million.
First Solar, Inc. (NASDAQ:FSLR) is making strides in the clean energy space and is announcing a multitude of orders and collaborations. This April, the company announced that it has secured a 750 MW order for its thin-film PV solar modules from Origis Energy, a leading global solar and energy company. Then on April 12, First Solar, Inc. (NASDAQ:FSLR) announced that it will be supplying 4 GW worth of DC PV solar modules between 2023 and 2025 to Silicon Ranch, one of America’s largest independent power producers. Moreover, Nevada Gold Mines, a joint venture between Barrick Gold Corporation (NYSE:GOLD) and Newmont Corporation (NYSE:NEM), is investing in a 200 MW solar power plant designed to accelerate its decarbonization program. Nevada Gold Mines will be working with First Solar, Inc. (NASDAQ:FSLR) to manufacture all modules required to support the 200 MW construction, which is expected to begin in the third quarter of 2022. First Solar, Inc. (NASDAQ:FSLR) is becoming a go-to solar solutions provider, which makes it the fourth-best wind power and solar stock to buy.
On April 29, Baird analyst Ben Kallo raised his price target on First Solar, Inc. (NASDAQ:FSLR) to $98 from $91 and reiterated an Outperform rating on the shares. Kallo noted that the company is exploring partnerships in efforts to expand its operations, and is consistently innovating to extract value from the acceleration of electrification and green hydrogen production.
Lee Munder Capital Group is the most prominent shareholder in First Solar, Inc. (NASDAQ:FSLR) with stakes worth $10.27 million in the company. The investment covers 0.59% of Lee Munder Capital’s investment portfolio.
3. Enphase Energy, Inc. (NASDAQ:ENPH)
Number of Hedge Fund Holders: 50
Enphase Energy, Inc. (NASDAQ:ENPH) is another industry-leading designer, developer, and seller of home energy solutions for the solar photovoltaic industry in the United States and internationally. By the end of the fourth quarter of 2021, Enphase Energy Inc. (NASDAQ:ENPH) was spotted on 50 hedge fund portfolios. The stakes of these hedge funds totaled $763.28 million, up from $637.78 million in the prior quarter with 52 positions.
In addition to being a top stock pick among investor circles, Enphase Energy, Inc. (NASDAQ:ENPH) is being closely watched by expert analysts as well. On May 2, 2022, leading American bank holding company Truist assumed coverage of Enphase Energy, Inc. (NASDAQ:ENPH) with a Buy rating and a $205 price target.
This April, Enphase Energy, Inc. (NASDAQ:ENPH) reported market-beating earnings for the fiscal first quarter of 2022. The company reported earnings per share of $0.79, beating estimates by $0.10. The company’s revenues grew 46.24% year over year and came in at $441.29 million, outperforming market consensus by $7.64 million. Enphase Energy, Inc. (NASDAQ:ENPH) is surging and as of May 13, the stock’s trailing twelve-month returns are up 22.97%, which makes it a high-momentum wind power and solar stock to buy.
As of the end of this March, Quaero Capital is the top shareholder in Enphase Energy, Inc. (NASDAQ:ENPH). The fund upped its Q4 2021 stakes by 6%, bringing its Q1 2022 stakes to $10.52 million, which covers 6.61% of Quaero Capital’s 13F portfolio.
ClearBridge Investments mentioned Enphase Energy, Inc. (NASDAQ:ENPH) in its “Sustainability Leaders Strategy” first-quarter 2022 investor letter. Here is what the investment management firm had to say:
“Enphase Energy (NASDAQ:ENPH) is a key solar holding that should be able to take advantage of greater incentives for solar installations in many geographies. The company was also a strong contributor for the quarter, overcoming pressures of a higher discount rate on their strong projected future earnings, raw material inflation and supply chain challenges as their long-term value was reaffirmed.”
2. NextEra Energy, Inc. (NYSE:NEE)
Number of Hedge Fund Holders: 55
NextEra Energy, Inc. (NYSE:NEE) generates, distributes, and sells electric power to retail and wholesale customers in North America. The company generates electricity through wind, solar, nuclear, coal, and natural gas facilities. In 2020, NextEra Energy, Inc. (NYSE:NEE) added 13 wind farms in ten states which grew its wind portfolio by over 2,300 MW. The company expects to bring about 3,700 to 4,400 MW of additional wind energy in 2022 and currently operates 136 wind projects that span over 19 U.S. states and 4 Canadian provinces. NextEra Energy, Inc. (NYSE:NEE) is one of the world’s largest producers of wind and solar energy and is, therefore, the second-best wind power and solar stock to buy.
This April NextEra Energy, Inc. (NYSE:NEE) reported earnings for the fiscal first quarter of 2022 in which it beat EPS estimates by $0.02. The company generated quarterly revenues of $2.89 billion and registered an EPS of $0.74.
Credit Suisse analyst Nicholas Campanella sees NextEra Energy, Inc. (NYSE:NEE) as “fundamentally attractive”, and on April 25, assumed coverage of the company with an Outperform rating and an $87 price target. Campanella contends that NextEra Energy, Inc. (NYSE:NEE) is well-positioned to benefit from current cost inflation and has a competitive advantage over rivals due to its size and scale.
Hedge funds are making sizeable investments in NextEra Energy, Inc. (NYSE:NEE). At the close of the fourth quarter of 2021, 55 hedge funds were long NextEra Energy, Inc. (NYSE:NEE) with stakes worth $2.61 billion. This is compared to 53 hedge funds in Q3 2021 with stakes of $2.37 billion. The hedge fund sentiment for the stock is positive.
As of the end of this March, Fisher Asset Management owns the most shares of NextEra Energy, Inc. (NYSE:NEE), approximately 15.66 million, which makes it the dominating shareholder in the company. The fund’s stakes are valued at $1.32 billion, which covers 0.78% of Ken Fisher’s hedge fund portfolio.
1. General Electric Company (NYSE:GE)
Number of Hedge Fund Holders: 57
General Electric Company (NYSE:GE) operates as a high-tech industrial company across the globe. The company’s four business segments include Power, Renewable Energy, Aviation, and Healthcare. The renewable energy sector provides industry-leading solutions for customers by combining onshore and offshore wind turbines, blade manufacturing, grid solutions, hydro, storage, and hybrid renewables. The company’s renewable energy business is one of the world’s top wind turbine suppliers and boasts installation of over 49,000 units that are generating wind electricity across the globe, and makes General Electric Company (NYSE:GE) the best wind power and solar stock to buy.
This April, Deutsche Bank analyst Nicole DeBlase slashed her price target on General Electric Company (NYSE:GE) to $107 from $118 to reflect supply-chain pressures impacting the company’s renewables and healthcare segments, but maintained a Buy rating on the shares. Regardless, DeBlase sees General Electric Company (NYSE:GE) as capable of achieving the low end of its earnings guidance in 2022.
On April 26, General Electric Company (NYSE:GE) released an earnings report for the fiscal first quarter of 2022. The company reported earnings per share of $0.24 and beat EPS estimates by $0.04. The company’s quarterly revenues totaled $17.04 billion, of which $2.9 billion were attributed to the renewable energy segment, and outperformed market consensus by $122.94 million.
General Electric Company (NYSE:GE) is a top stock pick among investor circles. Insider Monkey found 57 hedge funds bullish on General Electric Company (NYSE:GE) at the end of Q4 2021. The collective stakes of these funds came in at $6.26 billion, up from $6.24 billion in the prior quarter with 53 positions.
As of March 31, 2022, Pzena Investment Management owns an astounding 11.05 million shares of General Electric Company (NYSE:GE) which equates to a stake value of $1.01 billion. Pzena Investment Management is the top shareholder in the company.
Here is what Vulcan Value Partners had to say about General Electric Company (NYSE:GE) in its third-quarter 2021 investor letter:
“During the quarter, we sold our positions in General Electric Co. General Electric is a company we followed for a long time. In the past, we removed GE from the MVP list due to management’s poor capital allocation decisions which resulted in value instability. Larry Culp, the former CEO of Danaher, became CEO of General Electric in 2018. The company implemented a vast restructuring program to simplify the industrial side of its business, sold off non-core assets, paid down debt with the proceeds, and drastically shrunk GE Capital. These restructuring activities allowed its world-class jet engine and healthcare businesses to shine through, and improved value stability. As a result, we added the company back to the MVP list. While the pandemic negatively impacted General Electric’s aviation business in the short run, it also gave us the opportunity to buy General Electric in the second quarter of 2020 with a substantial margin of safety. GE is a good example of a competitively entrenched, yet slower growing MVP business. As its stock price rose rapidly over the last year, its value growth did not keep up, and the price to value gap closed quickly. As our margin of safety diminished, we sold our position in GE and allocated to more discounted companies.”
You can also take a look at 10 Energy Dividend Stocks with Over 2% Yield and 10 Best Renewable Energy Stocks to Buy Now.
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Disclose. None. 10 Best Wind Power and Solar Stocks To Buy is originally published on Insider Monkey.
