In this article, we will look at the 10 Best Renewable Energy Penny Stocks to Invest in.
Investments in Renewable Energy
The renewable energy sector has experienced growth in recent years, driven by increased government investments in the energy transition as the world moves away from fossil fuels. However, in 2023, the sector experienced volatility due to inflation and high interest rates. Analysts believe that the renewable energy market is set to make a comeback this year, driven by growth in solar and wind power generation. On May 23, Reuters reported that the leading renewable energy company, Orsted secured an investment of $680 million in tax equity financing from JP Morgan to fund its solar battery storage projects of 250 megawatts and 300 megawatts in Texas and Arizona, respectively. This investment utilizes tax credits from the Inflation Reduction Act and is an indicator of its potential to accelerate clean energy deployment in the United States. The Arizona facility will receive a one-time investment credit for the battery storage stem. Before this deal, JP Morgan had other investments in the 1.8 GW onshore portfolio of Orsted in the United States. Both projects are expected to become operational in 2024.
The renewable energy market is gaining momentum in 2024. Over the past month, prominent renewable energy-related exchange-traded funds (ETFs) have shown a surge in returns. As of May 28, the leading clean energy ETF, iShares Global Clean Energy ETF has surged 11%, while the First Trust Nasdaq Clean Edge Green Energy Index Fund has climbed 14%. This growth also extends to solar stocks, with Invesco Solar ETF gaining 14% over the past month. The boom of solar stocks is exemplified by First Solar as it is leading the surge, with its stock soaring by more than 50% over the past month, significantly outperforming the broader market. Check out our free report on 7 Best Alternative Energy Stocks according to Analysts.
Clean Energy Powering AI
According to the International Energy Agency’s projections, global electricity consumption for data centers, cryptocurrency, and AI sector could double by 2026. This provides the clean energy sector with a lucrative opportunity to capitalize on. Recently on May 24, the Chief Executive Officer of Oklo, Jake DeWitte appeared in an interview on Yahoo Finance Catalysts where he talked about the company’s business model and energy landscape. Oklo is an advanced nuclear technology company, engaged in the development and design of fission power plants to provide reliable commercial-scale energy to customers in the US. The company aims to create clean energy and also has the backing of OpenAI’s founder, Sam Altman. DeWitte said that Oklo employs next-generation nuclear technology which has the potential to power the planet for over a billion years. The CEO believes that the energy demand is rising as the Artificial Intelligence sectors rely on clean energy to power their operations. Oklo’s business model revolves around selling the generated power through long-term agreements to major energy consumers for AI such as data centers. This will provide the company with recurring revenue to continue developing and deploying clean energy solutions.
Moreover, the revenue stream will allow the company to utilize project financing and advantage from government investment tax credits. DeWitte also talked about the company’s partnership with a data center company, Wyoming Hyperscale, which will allow Oklo to integrate clean energy with the advanced liquid cooling technology of the data center. This partnership could lead to the use of the reactor’s waste heat for cooling the data center. Both companies have signed a 20-year power purchasing agreement. You can also check out our free report on 7 Unstoppable AI Stocks to Buy.
Renewable Energy Companies with High Growth Potential
Tigo Energy is a solar and energy storage company, engaged in the development of module-level power electronics (MLPEs). The MLPEs help solar modules reach their maximum energy output. The company also offers GO Energy Storage Systems with solar storage management capabilities and energy intelligence (EI) platforms. Founded in 2007, the company provides its services to residential, utility, and commercial customers in the United States, Europe, the Middle East, Asia Pacific, and Africa. The company’s stock is also one the cheapest clean energy stocks to buy according to analysts. On May 8, the company announced that it has launched the latest Tigo Flex MLPE product line, the Tigo TSX-4. The new MLPE is designed for large-scale commercial and industrial solar projects. It is compatible with solar modules with power of up to 800 watts. The new TSX-4 series offers increased power output, reduced cost, optimization, and advanced monitoring.
Another leading renewable energy company, Emeren operates, develops, and builds solar power projects. Its portfolio consists of a 3 gigawatts pipeline of projects and independent power producer (IPP) assets. It is also engaged in the engineering and procurement of solar modules along with other components. On April 23, the company announced that it has partnered with Nuveen Infrastructure to develop battery storage projects in Italy. The agreement finalized a collaboration of a 2.83 GWh capacity and the development of two additional battery storage projects. The construction of the projects will begin in 2024 and will be operational by 2026.
With this context, let’s have a look at the 10 best renewable energy penny stocks to invest in.
An energy efficient wind turbine on a sprawling field, generating renewable energy.
Methodology
To compile our list of the 10 best renewable energy penny stocks to invest in, we used stock screeners from Yahoo Finance and Finviz, and listed the stocks trading at a price lower than $5, as of May 28. We also reviewed multiple similar rankings by Insider Monkey and various clean energy ETFs to form a list of 30 renewable energy penny stocks. We picked the 10 stocks with the most buy or buy-equivalent ratings from Wall Street analysts and the highest average upside potential, as of May 28. Finally, we sourced the hedge fund sentiment for each stock. The hedge fund data was taken from Insider Monkey’s database of over 900 elite hedge funds as of the first quarter of 2024. The 10 best renewable energy penny stocks to invest in appears in ascending order of their number of hedge fund holders, as of Q1.
At Insider Monkey we are obsessed with 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. 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).
10 Best Renewable Energy Penny Stocks to Invest in
10. Tigo Energy, Inc. (NASDAQ:TYGO)
Share Price as of May 28: $1.27
Number of Hedge Fund Holders: 3
Tigo Energy, Inc. (NASDAQ:TYGO) is ranked 10th on our list of the best renewable energy penny stocks to invest in. The company offers solar and energy storage solutions. Its products include MLPEs, GO energy storage systems, and energy intelligence (EI) platforms.
The company recently released its financial results for the first quarter of 2024 on May 14. The company reported a revenue of $9.8 million for the quarter. As of Q1 2024, the company shipped 249,000 MLPE along with 3.3 megawatts DC and 1.5 megawatt hours of inverter and battery, respectively. Tigo Energy, Inc. (NASDAQ:TYGO) is optimistic about its share growth in the second half of 2024 as its major market, the American region, is stabilizing. At the end of Q1, 3 hedge fund managers were long Tigo Energy, Inc. (NASDAQ:TYGO), with stakes worth $9.05 million according to Insider Monkey’s database. Its stock has surged over 25% at the time of writing.
On May 15, C Wainwright & Co. analyst Amit Dayal reiterated a buy rating on the stock and maintained his price target of $5. Tigo Energy, Inc. (NASDAQ:TYGO) has an average upside potential of 271.9% from its current price of $1.25, based on 1-year price targets of 4 analysts.
9. Energy Vault Holdings, Inc. (NYSE:NRGV)
Share Price as of May 28: $1.17
Number of Hedge Fund Holders: 4
Energy Vault Holdings, Inc. (NYSE:NRGV) is an energy storage company, which offers electrochemical battery energy storage systems (B-Vault), proprietary gravity energy storage system (G-Vault), hybrid energy storage system (H-Vault), and EVx solution. Its products also include energy management systems such as Vault-OS. On May 10, the company released its earnings and reported a revenue of $7.8 million for the first quarter of 2024, primarily driven by its IPP and utility projects. The company’s revenue declined on a YoY basis, however, it achieved a GAAP gross margin of 26.7%, leading to a gross profit of $2.1 million. The company’s robust gross margin performance and decreased losses indicate its potential for profitability. Various projects of the company began operations or were commissioned in Q1. These projects include a 100 MWh Gravity Energy Storage System in China and a 440 MWh Battery Energy Storage System in Nevada.
At the close of Q1, 4 hedge fund managers were long Energy Vault Holdings, Inc. (NYSE:NRGV), with stakes worth $15.65 million. On May 13, TD Cowen analyst Thomas Boyes revised his price target on the stock from $5 to $4 and maintained a buy rating.
Based on 1-year price targets of 5 analysts, Energy Vault Holdings, Inc. (NYSE:NRGV) has an average upside potential of 115.5% from current levels.
8. Broadwind, Inc. (NASDAQ:BWEN)
Share Price as of May 28: $4.09
Number of Hedge Fund Holders: 5
Broadwind, Inc. (NASDAQ:BWEN) is one of the best renewable energy penny stocks to invest in. It is engaged in the manufacturing of structures, equipment, and components for clean energy in the US. Its offerings include steel towers and adapters for wind turbine manufacturers, gearing, gearboxes, and precision for various industries including energy, and energy storage services.
On May 14, Broadwind, Inc. (NASDAQ:BWEN) released its earnings for the first quarter of 2024. It reported earnings per share (EPS) of $0.07 and surpassed estimates by $0.14. Its revenue for the quarter reached $37.62 million, beating estimates by $2.53 million. Its industrial solutions segment, which focuses primarily on clean energy, reported revenue of $8 million in the first quarter of 2024, up 47.4% from last year. Its operating income reached $1.8 million, recording a YoY increase of 200%.
On May 15, Roth MKM analyst Justin Clare maintained a buy rating on the stock and raised his price target from $3.5 to $4. According to the Insider Monkey’s database, Broadwind, Inc. (NASDAQ:BWEN) is a part of 5 hedge fund managers’ portfolios, with stakes worth $599,000 at the close of the first quarter of 2024. Of those, Citadel Investment Group held the highest share in the stock, worth $148,360.
Based on the consensus of 4 analysts as of May 28, the stock has a buy rating, with an average upside potential of 46.7% from its current price of $4.09.
7. Enel Chile S.A. (NYSE:ENIC)
Share Price as of May 28: $3
Number of Hedge Fund Holders: 7
Enel Chile S.A. (NYSE:ENIC) is ranked among the best renewable energy penny stocks to invest in. The firm manages and controls a group of companies in the energy market, involved in the development, generation, and distribution of renewable energy. It has total assets worth Ch$11,833,721 million as of December 31, 2023. The company boasts a total net installed capacity of 8.5 gigawatts, out of which 86.4% is renewable.
The company recently posted its financial results for the first quarter of 2024. It reported a stable net income of $157 million, ahead of market expectations by 6% YoY. The company also reported a 34% increase in free cash flow, compared to the first quarter of 2023. Moreover, its financial health is bolstered by the approval of a final dividend of CLP$ 3.98 per share by the 2024 AGM. The company is currently trading cheap at a trailing 12-month PE ratio of 5.79x, compared to the industry PE ratio of 45.6x, as of May 31. Enel Chile S.A. (NYSE:ENIC) emerges as one of the leaders in the renewable energy market with an impressive portfolio of 43 plants boasting a total installed capacity of 3 gigawatts, distributed in 5.67% solar, 28.50% wind, 3.07% hydroelectric, and 2.77% geothermal.
In 2023, its electricity generation reached 6,102 gigawatt hours in 2023, up nearly 35% from 2022. Recently in January, the company received authorization to begin the commercial operation of its El Manzano photovoltaic farm. The farm has a net installed capacity of 99 megawatts and is expected to generate nearly 226 gigawatt hours of 100% clean energy per year. It is also one of the best stocks to buy according to billionaire Ken Griffin. At the close of the first quarter, 7 analysts were long Enel Chile S.A. (NYSE:ENIC) with stakes worth $22.75 million. Of those, AQR Capital Management is the highest shareholder, with positions worth $9.7 million. The hedge fund increased its stakes in the stock by 25%.
Based on the consensus of 6 analysts, the stock has a buy rating with an average target of $3.92. Its average price target represents an upside potential of 32.6% from current levels.
6. ESS Tech, Inc. (NYSE:GWH)
Share Price as of May 28: $0.79
Number of Hedge Fund Holders: 7
ESS Tech, Inc. (NYSE:GWH) is an energy storage company involved in the design and production of iron flow batteries for utility-scale and commercial energy storage applications. Its energy storage products include energy warehouses and energy centers.
On May 7, ESS Tech, Inc. (NYSE:GWH) posted its earnings for the first quarter of 2024 and reported an EPS of -0.10, surpassing expectations by $0.01. It generated a revenue of $2.74 million in the quarter, recording a YoY increase of over 600%. The company also recently announced its partnership with a Nigerian energy generation company that boasts a 1 terawatt capacity, Sapele Power. ESS Tech, Inc. (NYSE:GWH) will provide energy storage services to the company, starting the initial deployment phase with 8 megawatt-hours of storage to improve the efficiency of Sapele’s assets. This installation, supported by the Export-Import Bank of the US, will increase grid resiliency and offset backup generators. Future phases include 50 megawatts of battery storage to support a green load base. This deal emphasizes the need for long-duration energy storage and hence positions ESS Tech, Inc. (NYSE:GWH) as a strong contender in the market. This project will bring the nameplate power module capacity of the company to over 1 gigawatt-hour annually.
According to the data by Insider Monkey, 7 hedge fund managers held stakes worth $605,000 in ESS Tech, Inc. (NYSE:GWH) at the end of Q1. On May 8, TD Cowen analyst Thomas Boyes maintained a buy rating on the stock and revised his price from $2.5 to $2.
5. Emeren Group Ltd (NYSE:SOL)
Share Price as of May 28: $1.95
Number of Hedge Fund Holders: 9
Emeren Group Ltd (NYSE:SOL) is involved in the development and construction of solar power projects including community solar gardens. It owns and operates a 2.6 gigawatt pipeline of projects and IPP assets, with over 8 GW energy storage project pipeline. On May 23, the company announced its financial results for the first quarter of 2024. It generated a revenue of $14.8 million, recording a year-over-year increase of 15%. Its gross profits doubled from Q1 2023 and reached $4 million in the first quarter of 2024. The primary driver of the revenue in Q1 was its Development Service Agreement (DSA) business, The company expanded its DSA business with two new agreements for battery energy storage systems projects, to nearly 2.83 GWh in Southern Italy with Nuveen Infrastructure. It also expanded its battery energy storage to 12 MWh in China.
As of March 31, the company has over 3.1 gigawatts of advanced-stage storage project pipeline, 255 megawatt PV assets, and 19 megawatt hours storage operating assets. By the end of Q1, Emeren Group Ltd (NYSE:SOL) was a part of 9 investors’ portfolios, with stakes worth $37.69 million. Shah Capital Management held the highest stake in the company, worth $35.96 million as of March 31.
Based on 1-year price targets of 4 analysts, Emeren Group Ltd (NYSE:SOL) has an average upside potential of 159.1% from current levels. On May 24, HC Wainwright & Co. Amit Dayal reiterated a buy rating on the stock and his price target of $7.
