Stocks to Buy for Solar Energy in 2023

The solar energy sector develops and distributes hardware capable of capturing the sun’s rays and transforming them into electricity that can be used. Businesses in this sector are driving the shift away from fossil fuels like oil and towards renewables. The solar energy industry is an attractive prospect for long-term investors because it will require trillions of dollars and many years to accomplish the transformation.

In the fight against global warming, increasing the proportion of electricity produced by solar power is an important priority. Consequently, solar energy firms are raking in record profits, and the worldwide solar market is expected to develop at a CAGR of almost 7% through 2030.

Solar power stocks are a popular option for investors who want to do good and make money. However, newcomers to this market should be aware that solar stocks have a lengthy history of producing significant, rapid price changes. These spurts are followed by long periods of either downward or upward motion. The majority of sector stocks trended downward or flat between 2021 and 2022.

Top Solar Energy Stocks

Let’s check out several solar firms that can keep up with the evolving energy landscape.

These are meant as introductions; if something interests you, you should look into it further.

1. The Original Sun

Regarding solar energy, First Solar is at the top of innovation. It researches cutting-edge solar technology and commercializes finished products.

First Solar primarily focuses on producing a private, superior thin-film module, which sets them apart from competitors. Its panels outperform competing silicon modules in less-than-ideal settings like low light and hot temperatures. Their increased size also contributes to their decreased price per watt. These features are ideal for use in massive solar power plants.

First Solar is unique among solar companies since it has one of the healthiest bottom lines in the industry. Its cash flow consistently exceeds its debt, allowing it to pursue its goal of developing and manufacturing thin-film solar modules for utility-scale customers. First Solar is well-positioned for success, with the solar sector expected to grow.

There is a lot of expansion planned for First Solar as well. The company’s production capacity is committed through 2024, and sales agreements have been inked out to 2026. It is making significant investments to increase its solar panel production capability. The company expects rapid sales and profit growth due to expenditures over the next few years.

2 . Brookfield Renewable

Brookfield Renewable was founded by alternative asset management giant Brookfield Asset Management (BAM 2.86%) as a renewable energy yield. The energy firm produces green power and sells it to customers through PPAs.

The renewable energy portfolio of Brookfield Renewable is widely diversified. It has the most hydroelectric power plants of any country in the world. Rapid onshore and offshore wind power growth, utility-scale and distributed generation (e.g., rooftop solar), and battery storage facilities supplement these existing infrastructures.

Although the sustainable energy company is confident about the future of wind and hydro, it anticipates that solar will account for most of its production capacity within the next decade. Solar energy development projects are becoming more profitable as their costs drop.

Brookfield has made many purchases in recent years to strengthen its solar energy development skills. It purchased Urban Grid, the country’s preeminent builder of large-scale solar and energy storage projects, in 2022. The acquisition increased its pipeline of renewable energy projects in the United States.

Brookfield is on target to increase cash flow per share by 6% to 11% year through 2026 because of its solar-powered development pipeline. It also expects future purchases to contribute between 5% and 9% annually to growth, which bodes well for the company’s goal of increasing its already high-yielding dividend. Due to its increasing dividend pay-out, it has become one of the best renewable energy dividend companies. The sum of Brookfield Renewable’s growth and profits should yield healthy total returns shortly.

3. SolarEdge Technologies

Power optimizers and inverters made by SolarEdge Technologies are used to transform solar energy into usable electricity. Its parts have enhanced solar panels’ ability to change the sun’s direct current (DC) energy into the alternating current (AC) electricity that powers our homes and businesses. Using the power optimizers from SolarEdge will result in a cheaper system than one utilizing a microinverter made by a company like Enphase Energy (ENPH 0.21%), for example.

SolarEdge has gained market share from rivals by producing low-cost power optimizers, which is particularly attractive to solar project developers concerned with keeping costs down. To boost its average revenue per installation, the company has invested in purchasing and developing new products in the energy storage and management spaces, as well as intelligent modules.

SolarEdge’s leading market position is strengthened by the company’s robust, cash-rich balance sheet, which allows it to invest in expanding production capacity and technological superiority.

SolarEdge’s strong financial position has allowed the company to diversify into other areas of the intelligent energy industry. Storage, electric vehicle (EV) charging, batteries, uninterruptible power supply (UPS) systems, EV powertrains, and grid services solutions are all areas where the business has invested or bought technology. SolarEdge’s actions have positioned the company to take advantage of the growing renewable energy market, which could significantly speed up the company’s expansion in the years to come.

There has never been a better time to invest in solar energy.

Even before Joe Biden was elected president, solar energy was on course for rapid expansion. His government, though, could turbocharge the sector’s growth with its promise to lead the United States to an emissions-free future. He has set an ambitious target for the United States to produce zero-carbon electricity by 2035. Biden also proposes increasing tax incentives and making direct investments to hasten the transition to clean energy. During his presidency, Congress enacted two pieces of legislation that might pave the way for more investment in renewable energy.

This means solar power could expand even more rapidly in the following years than anticipated. Investors should think about buying solar energy stocks because of their growth potential. Firm financial profiles and clear growth prospects make First Solar, Brookfield Renewable, and SolarEdge Technologies three of the most potent possibilities.