Clean energy has returned to investors’ attention as a Democratic Congress raises expectations that federal green subsidies and tax credits will receive stronger protection and that project approvals could move faster. Reuters reported renewed interest in solar manufacturers, residential installers, and equipment suppliers following the election. The policy outlook matters because developers commit capital well before a power plant starts generating revenue. Greater confidence in the incentives available when a project is completed can make it easier to finance construction, place equipment orders, and secure customers for its electricity.
That opportunity extends across the businesses discussed in our list of 10 Best Clean Energy Stocks to Buy Right Now. Manufacturing credits can support domestic factories, while incentives for project owners influence demand for panels, trackers, batteries, and construction services. Faster approvals would address another obstacle by reducing the time between announcing a development and starting operations. For shareholders, the financial benefit depends on where a company sits in that process and how much of the available support reaches its earnings.
Industry demand provides a useful starting point. The Solar Energy Industries Association and Wood Mackenzie reported that U.S. solar installations reached 11.4 gigawatts in the second quarter of 2026, an increase of 45% from a year earlier. Utility-scale installations rose 61% to 9.6 gigawatts, while residential installations declined 12% to 995 megawatts. Those figures show why a broad improvement in sentiment can have different implications for individual companies. Suppliers serving large developers face a different order environment from installers selling systems to households.
The business models also produce different cash-flow demands. An equipment manufacturer can book revenue when it ships a product. A contractor must manage labor, procurement, and construction schedules before collecting the full value of a project. A company that owns solar or storage assets needs financing upfront and earns its return over years of operation. These differences help explain why growing orders can coexist with weaker margins or continued borrowing needs. They also provide a useful way to compare the opportunities covered in our 8 Best Wind Power and Solar Stocks to Buy Right Now.
Grid access remains a major constraint. Lawrence Berkeley National Laboratory counted 2,061 gigawatts of proposed generation and storage seeking a U.S. grid connection at the end of 2025. Many projects entering those queues are eventually withdrawn. The backlog creates potential work for construction and electrical-equipment suppliers, although customers still need financing, permits, and buyers for their power. Analyst targets provide one way to compare expectations across these businesses. Reading them alongside contracted orders, cash generation, and hedge fund ownership gives investors a fuller picture of what must happen for those expectations to be met.
For illustration purposes only. Photo by Adrinil Dennis on Pexels
Our Methodology
To compile our list, we screened listed renewable and clean energy stocks using thematic ETF holdings, focusing on the renewable-energy equipment and alternative-electricity holdings of the First Trust Nasdaq Clean Edge Green Energy Index Fund. We supplemented this screen with online searches to identify additional relevant companies. From the candidates, we considered stocks with Buy or Strong Buy consensus ratings and positive upside to analysts’ median 12-month price targets. We selected the ten stocks with the highest upside and ranked them from lowest to highest. We also included Q2 2026 hedge fund holder counts from Insider Monkey’s database.
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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 612% since May 2014, beating its benchmark by 375 percentage points (see more details here).
10. Nextpower Inc. (NASDAQ:NXT)
Upside Potential: 25.53%
Number of Hedge Fund Holders: 59
Market Capitalization: $15.80 billion
Nextpower Inc. (NASDAQ:NXT) supplies solar trackers and an expanding range of equipment used at utility-scale power plants. Its growth opportunity increasingly comes from selling more products into each development. A customer buying trackers can also purchase foundations, electrical connections, or power-conversion equipment. That gives the company additional ways to increase revenue from existing customer relationships as developers build larger and more complex projects.
The fiscal second quarter of 2027 showed progress in that expansion. Revenue increased 23% year over year to $1.11 billion, and record bookings lifted backlog above $6 billion. Electrical-equipment orders exceeded $100 million, while a framework agreement covered 1.1 gigawatts of inverters across five projects. Management raised its full-year revenue outlook to $4.20 billion–$4.45 billion from $4.10 billion–$4.40 billion. These orders give investors evidence that customers are beginning to adopt the broader product offering.
The earnings contribution will depend on the profitability of that mix. Gross margin declined to 31.1% from 32.4% a year earlier, even as revenue advanced. Selling additional equipment can strengthen a customer relationship and expand the addressable market, but it also adds manufacturing, procurement, and integration demands. The question is whether the new businesses can generate enough incremental profit to compensate for those costs. Our discussion of Nextpower’s expansion beyond solar trackers examines how its electrical technology supports that strategy.
Analysts’ median target of $125 implies 25.53% upside under our screen. Hedge fund ownership also increased to 59 holders in Q2 2026 from 44 in the preceding quarter. The growing order book and broader product range help explain that attention. Investors still need to see booked projects turn into deliveries while margins hold up as the company absorbs the costs of expansion.
9. Sunrun Inc. (NASDAQ:RUN)
Upside Potential: 26.65%
Number of Hedge Fund Holders: 40
Market Capitalization: $2.41 billion
Sunrun Inc. (NASDAQ:RUN) is building its residential solar business around batteries that can serve both homeowners and the electricity grid. Storage accounted for 75% of new customer additions in the third quarter of 2026, up from 70% a year earlier. Connected batteries give Sunrun an opportunity to earn revenue by supplying power when utilities need it, while customers receive backup electricity. Its systems demonstrated that capability by delivering more than 430 megawatts during a single grid event.
That makes Sunrun’s virtual power plant strategy an important part of the investment case. A larger installed battery network can create additional services without requiring Sunrun to acquire a new household customer for every transaction. The economics still depend on the compensation utilities offer and the expense of building and maintaining the systems. Investors therefore need to assess the value generated from each installation alongside the pace of customer additions.
The operating figures show that tension. Sunrun added 22,957 subscribers in the quarter, down 24% year over year. Contracted net value per subscriber fell 28% to $6,645 as the discount rate used to value project cash flows increased to 8.4% from 7.3%. Higher financing costs reduce the present value of payments under long-term customer contracts, even when demand for reliable household power remains intact.
Operating cash flow reached $301 million, but Sunrun’s separate cash-generation measure was $6 million after $50 million of equipment purchases tied to tax-credit eligibility. Management forecast roughly $200 million of full-year cash generation excluding those purchases. JPMorgan maintained an Overweight rating while reducing its target to $11. The broader median target of $12.50 implies 26.65% upside, with 40 hedge funds holding the stock in Q2. Improving cash generation from the battery network would provide stronger support for that analyst confidence.
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