In this article, we discuss the 10 best solar energy stocks to buy for 2022. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Solar Energy Stocks to Buy for 2022.
Solar energy has become quite popular due to rising concerns about climate change, advocacy for green energy, and governments offering stimulus packages and subsidizing sustainable energy sources. Solar energy, being clean, emissions-free, and renewable, has experienced an average annual growth rate of 42% in the last decade.
Wind and solar capacity additions of 13.8 gigawatts in the first eight months of 2021 were up 28% year-over-year. The Biden administration’s aim to fully decarbonize the US economy is fueling the growth of the renewable sector, which will be more rapid if proposed legislation is enacted.
In 2020, 43% of all new electric capacity added to the grid came from solar, and this has been the largest share of newly added solar capacity in history, for the second year in a row. Solar energy companies are poised for higher demand in the coming years, especially as price volatility in the oil and gas sectors renders those sources as extremely expensive for industrial purposes, in addition to the excessive carbon footprint.
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Some of the notable solar energy stocks include First Solar, Inc. (NASDAQ:FSLR), Sunnova Energy International Inc. (NYSE:NOVA), Sunrun Inc. (NASDAQ:RUN), and Enphase Energy, Inc. (NASDAQ:ENPH), among others discussed in detail below.
Our Methodology
We compiled the list of the best solar energy stocks to buy for 2022 by choosing companies that were popular among hedge funds, had positive analyst ratings and long-term growth catalysts.
The list is ranked according to the hedge fund sentiment surrounding each stock, which was gauged from a total of 867 hedge funds monitored by Insider Monkey in the third quarter.
Best Solar Energy Stocks to Buy for 2022
10. Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN)
Number of Hedge Fund Holders: 9
Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN) became an independent company in 2020, after its spin-off from the California-based SunPower Corporation (NASDAQ:SPWR). Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN) manufactures and distributes solar products across 100 countries via extensive retail channels, operating the SunPower brand in all global markets except the United States and Canada.
On November 17, Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN) announced earnings for Q3. The company reported a loss per share of $1.34, beating estimates by $0.01. The revenue increased 6.71% year-over-year to $220.49 million, but missed estimates by $5.78 million.
BofA analyst Julien Dumoulin-Smith on December 3 upgraded Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN) to Buy from Neutral with a $23 price target, stating that Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN) could qualify for tax credits of 11 cents per watt with its proposed U.S. cell and module manufacturing facility.
By the end of September this year, 9 hedge funds were bullish on Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN), holding total stakes valued at $10.70 million. This is an increase as compared to 8 funds holding positions in Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN) in the preceding quarter.
One of the leading stakeholders of the company is Israel Englander’s Millennium Management, holding 121,720 shares worth $2.14 million. Englander increased his stake in Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN) by 524% in the third quarter.
In addition to First Solar, Inc. (NASDAQ:FSLR), Sunnova Energy International Inc. (NYSE:NOVA), Sunrun Inc. (NASDAQ:RUN), and Enphase Energy, Inc. (NASDAQ:ENPH), Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN) is one of the best solar energy stocks to buy for 2022.
9. JinkoSolar Holding Co., Ltd. (NYSE:JKS)
Number of Hedge Fund Holders: 10
JinkoSolar Holding Co., Ltd. (NYSE:JKS) is a Chinese company that is currently the world’s largest solar panel manufacturer. JinkoSolar Holding Co., Ltd. (NYSE:JKS) serves the residential, industrial, and commercial utility sectors in China, the United States, Japan, Germany, the United Kingdom, Brazil, the United Arab Emirates, Italy, Spain, and France, among other regions, making it one of the best solar stocks to buy for 2022. JinkoSolar Holding Co., Ltd. (NYSE:JKS) is a producer of mono wafers, solar cells, and solar modules.
JinkoSolar Holding Co., Ltd. (NYSE:JKS) posted its Q3 results on November 30. EPS in the quarter totaled $0.05, exceeding estimates by $0.03. The Q3 revenue came in at $1.33 billion, missing estimates by $62.37 million.
CICC analyst Tao Zeng upgraded JinkoSolar Holding Co., Ltd. (NYSE:JKS) to Outperform from Market Perform with a $66.10 price target on December 2.
JinkoSolar Holding Co., Ltd. (NYSE:JKS), on December 2, announced that its principal operating subsidiary, Jinko Solar, will reinforce its partnership for 2022 with Aldo Solar, which is the largest distributor of solar energy solutions in Brazil. This resulted in the signing of the largest distribution agreement by JinkoSolar Holding Co., Ltd. (NYSE:JKS) outside China, where modules of 2 gigawatts of installed power will be distributed.
Marshall Wallace LLP is one of the leading JinkoSolar Holding Co., Ltd. (NYSE:JKS) stakeholders from the third quarter, holding a $12.99 million stake in the company. Overall, 10 hedge funds were long JinkoSolar Holding Co., Ltd. (NYSE:JKS) in Q3, up from 7 funds in the preceding quarter.
8. Hannon Armstrong Sustainable Infrastructure Capital, Inc. (NYSE:HASI)
Number of Hedge Fund Holders: 15
Hannon Armstrong Sustainable Infrastructure Capital, Inc. (NYSE:HASI) is a Maryland-based company that deploys investments in solar energy projects and sustainable infrastructure that aids energy efficiency improvements such as heating, ventilation, air conditioning systems, lighting, energy controls, roofs, and building shells.
On November 30, B. Riley analyst Christopher Souther raised the price target on Hannon Armstrong Sustainable Infrastructure Capital, Inc. (NYSE:HASI) to $83 from $82 and kept a Buy rating on the shares. The analyst is “increasingly confident” in the pace of the company’s balance sheet growth by the end of 2021, and expects visibility for net investment income growth of over 20% in 2022. He states that the recent pullback on the stock is a buying opportunity. This makes Hannon Armstrong Sustainable Infrastructure Capital, Inc. (NYSE:HASI) one of the best solar energy stocks heading into 2022.
Hannon Armstrong Sustainable Infrastructure Capital, Inc. (NYSE:HASI) reported Q3 earnings on November 4, posting an EPS of $0.41, in line with analysts’ consensus estimates.
Ian Simm’s Impax Asset Management is the leading stakeholder of Hannon Armstrong Sustainable Infrastructure Capital, Inc. (NYSE:HASI) from the third quarter, owning 2.18 million shares of the company worth $116.66 million. Overall, 15 hedge funds were bullish on the stock in Q3, up from 10 funds in the preceding quarter.
7. Brookfield Renewable Partners L.P. (NYSE:BEP)
Number of Hedge Fund Holders: 17
Headquartered in Toronto, Brookfield Renewable Partners L.P. (NYSE:BEP) owns and operates renewable power assets. The company is backed by Brookfield Asset Management Inc. (NYSE:BAM). Brookfield Renewable Partners L.P. (NYSE:BEP)’s portfolio of assets consists of hydroelectric, wind, solar, and storage facilities in North America, South America, Europe, and Asia.
On December 9, Brookfield Renewable Partners L.P. (NYSE:BEP) was upgraded to Overweight from Neutral by JPMorgan analyst Mark Strouse, with a $46 price target. The analyst believes that Brookfield Renewable Partners L.P. (NYSE:BEP) is “best in class” in the development and ownership of renewable projects, offering “high-quality cash yield and good visibility into growth”.
The stock should appeal to investors seeking exposure to ESG, energy, and technology, as well as value investors seeking long-term exposure to the renewable energy sector.
Robert Joseph Caruso’s Select Equity Group recently added Brookfield Renewable Partners L.P. (NYSE:BEP) to its Q3 portfolio, and is the leading company stakeholder, with a $2.67 million position. Overall, 17 hedge funds were long Brookfield Renewable Partners L.P. (NYSE:BEP) in the third quarter, with total stakes valued at $145.1 million.
Clearbridge Investments mentioned Brookfield Renewable Partners L.P. (NYSE:BEP) in its Q1 2021 investor letter. Here is what the firm said:
“U.S. renewables utility Brookfield Renewable was another detractor. Brookfield Renewable is a pure-play renewables operator and developer headquartered in Canada and domiciled in the U.S., 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. Its development pipeline stands at 18,000 megawatts, providing confidence the company can meet its targeted double-digit cash flow growth through to 2025. Shares moderated amid expectations of rising bond yields, and a cool-off on the green trade.”
6. Daqo New Energy Corp. (NYSE:DQ)
Number of Hedge Fund Holders: 18
Daqo New Energy Corp. (NYSE:DQ) made it to our list of the best energy stocks for 2022, announcing solid Q3 results on October 28. The company posted an EPS of $3.84, beating estimates by $1.19. Revenue over the period jumped 366.65% to $585.78 million, exceeding estimates by $37.55 million.
Daqo New Energy Corp. (NYSE:DQ) is a Chinese company specializing in the development and distribution of monocrystalline silicon and high-purity polysilicon, primarily for the global solar photovoltaic industry.
On November 1, Roth Capital analyst Philip Shen raised the price target on Daqo New Energy Corp. (NYSE:DQ) to $79 from $52 and kept a Neutral rating on the shares after the company’s Q3 earnings beat, and reiterated 2021 production guidance. According to the analyst, Daqo New Energy Corp. (NYSE:DQ) will experience higher earnings in 2022 as a result of the upward trend in poly average selling prices.
Of the 18 hedge funds that were bullish on Daqo New Energy Corp. (NYSE:DQ) in the third quarter, Steve Cohen’s Point72 Asset Management is one of the leading stakeholders of the company, owning 421,479 shares worth $24 million.
In addition to First Solar, Inc. (NASDAQ:FSLR), Sunnova Energy International Inc. (NYSE:NOVA), Sunrun Inc. (NASDAQ:RUN), and Enphase Energy, Inc. (NASDAQ:ENPH), Daqo New Energy Corp. (NYSE:DQ) is a notable solar energy stock.
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Disclosure: None. 10 Best Solar Energy Stocks to Buy for 2022 is originally published on Insider Monkey.
