We recently published a list of the 11 Best Renewable Energy Stocks To Buy Now. In this article, we are going to take a look at where Enphase Energy, Inc. (NASDAQ:ENPH) stands against the other best renewable energy stocks to buy now.
The future of President Joe Biden’s landmark climate legislation, the Inflation Reduction Act (IRA) plays a significant role in promoting renewable energy by offering a wide range of tax incentives and funding mechanisms to encourage investment in clean energy technologies, including solar, wind, and geothermal power, hangs in the balance as the incoming Republican-controlled White House, Senate, and House of Representatives prepare to take office in 2025.
However, an area of concern is the future of the Department of Energy’s Loan Programs Office (LPO), which provides financing for green energy projects. The LPO has been instrumental in funding large-scale renewable energy projects and it expanded significantly under the IRA. However, Trump’s appointees, particularly Wright, who has expressed skepticism about the climate crisis, may be inclined to scale back or dismantle this program entirely, which could have a significant impact on the green energy sector.
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Renewables as the Key to Meeting Rising Demand
In an interview with Bloomberg on December 23, Tom Steyer, Co-Founder of Galvanize Climate Solutions, a climate-focused global investment firm, discussed the role of renewable energy in the United States. Steyer emphasized that while the year 2025 is often discussed in the context of climate regulations, it is more accurately about meeting the growing energy demand. He argued that renewable energy should be at the center of any energy bill, regardless of political persuasion. Steyer highlighted that market costs are the primary drivers of the energy transition to renewables. He cited the fact that in 2023, 86% of new electricity generation was predominantly from renewable sources, driven by economic rather than purely environmental considerations.
Steyer pointed out that the phrase “drill, baby, drill” might still be part of the political conversation, but the cost differential between renewable and fossil fuels drives the reality. He noted that renewables are now cheaper than fossil fuels and are becoming increasingly cost-effective. For instance, the cost of natural gas in the U.S. has risen to nearly double its previous levels, while in Europe, it is even higher. However, the cheapest electricity is increasingly coming from renewable sources, both in the U.S. and globally. This economic reality is driving business decisions, international competitiveness, and national security by industries such as tech, that require large amounts of electricity and are increasingly turning to renewables to meet their energy needs.
When asked about the potential impact of deregulation in the energy sector, Steyer suggested that deregulation could help accelerate the adoption of renewables if it includes faster permitting and lower oversight for all energy projects, including renewables. He noted that the Trump administration’s push for faster permits and reduced oversight for oil and gas drilling could extended to renewables, and will lead to a significant expansion of low-cost, abundant renewable energy.
Regarding nuclear energy, Steyer acknowledged its potential but noted the challenges associated with cost, safety, and public perception. He pointed out that nuclear energy has historically been expensive, with the last nuclear plant in Georgia costing at least four times its original estimate. While nuclear energy could provide a stable baseload power source, the high costs and safety concerns have made it a less attractive option compared to renewables.
As the United States enters 2025, the future of the Inflation Reduction Act (IRA) remains uncertain under a Republican government. However, the cost-effectiveness of renewable energy compared to fossil fuels makes it increasingly dominant in the global energy mix.
A solar panel array stretched across a large open field, its glimmering panels reflecting the sun.
Our Methodology
To compile our list of the 11 best renewable energy stocks to buy now, we used clean energy ETFs plus online rankings to compile an initial list of 25 renewable energy stocks. We then used Insider Monkey’s Hedge Fund database to rank 11 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Enphase Energy, Inc. (NASDAQ:ENPH)
Number of Hedge Fund Investors: 38
Enphase Energy, Inc. (NASDAQ:ENPH) is a global energy technology company known for solar microinverter systems, which convert solar energy into usable electricity. The company also provides energy storage solutions and monitoring software designed for residential and commercial solar installations. Enphase Energy, Inc. (NASDAQ:ENPH) generates revenue through both product sales and subscription-based services.
Enphase Energy, Inc. (NASDAQ:ENPH) is aggressively expanding its product portfolio to address a broader range of market needs. The company has introduced the IQ9 microinverter, powered by Gallium Nitride (GaN) technology, which supports higher DC input currents and elevated AC grid voltages, making it suitable for small commercial markets. This new product line is expected to launch in the second half of 2025 and aims to capture emerging market demands and further penetrate the commercial sector. Additionally, Enphase Energy, Inc. (NASDAQ:ENPH) is rolling out its fourth-generation battery system, which is designed to significantly reduce installation costs and wall space, making it highly competitive for both grid-tied and backup applications. The company is also expanding its presence in key international markets, such as Japan, India, and Brazil, by launching products tailored to local needs and regulatory requirements.
In the United States, Enphase Energy, Inc. (NASDAQ:ENPH) is focusing on leveraging the benefits of the Inflation Reduction Act (IRA) to strengthen its market position. The company is introducing higher domestic content SKUs for its IQ8HC microinverters and IQ8P three-phase microinverters to enable commercial asset owners to qualify for a 10% domestic content Investment Tax Credit (ITC). This strategic move is expected to drive demand and increase the competitiveness of the company’s products in the US market.
Overall, ENPH ranks 6th on our list of best renewable energy stocks to buy now. While we acknowledge the potential of ENPH to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ENPH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.