During Joe Biden’s presidency, the U.S. solar industry experienced a significant boost, primarily driven by the Inflation Reduction Act (IRA). This $369 billion package, signed into law in 2022, has been a game-changer for the renewable energy sector. The IRA provided substantial incentives for renewable energy, including tax credits, grants, and investments in clean energy infrastructure. The IRA has also reduced the U.S. reliance on imported energy resources. The economic benefits of the IRA have been widely recognized, with bipartisan support from both Democratic and Republican leaders.
According to a report by the Solar Energy Industries Association (SEIA) published on December 4, the US solar market installed 8.6 GW of capacity in Q3, continuing the trend of record-setting quarterly volumes this year and marking a notable 21% increase compared to the same quarter in the prior year. The report also highlights significant growth in domestic solar module manufacturing capacity, which increased by over 9 GW in Q3, reaching nearly 40 GW. This marks a substantial rise from less than 7 GW at the end of Q2 2022, before the introduction of domestic manufacturing and procurement tax credits under the IRA. Additionally, the first US cell manufacturing facility opened in Q3 marking a significant milestone in reshoring cell production for the first time since 2019. Utility-scale solar remained the largest contributor, with 6.6 GW installed in Q3, which signifies a 44% increase year-over-year and marks the highest third-quarter performance on record for the segment.
Solar’s Future Under Trump
As Donald Trump prepares for a second term as president, the future of the U.S. solar industry is a topic of significant interest. Trump’s campaign rhetoric has signaled intentions to bolster the fossil fuel industry, repeal Biden-era policies such as the IRA, and increase trade tariffs.
In an interview with CNBC on November 9, John Berger, CEO of Sunnova, discussed the impact of a potential second Trump administration on the solar industry. Berger emphasized that the market is currently driven by wild speculation and emotional responses, but he believes that the fundamentals of the solar industry remain strong and the demand for energy is increasing, suggesting it could bring even more success and growth for the solar industry and his company.
Berger addressed the speculation about future policy changes, particularly regarding the Inflation Reduction Act (IRA). He stated that the IRA is unlikely to change significantly, noting its success and the bipartisan support for domestic manufacturing, especially in the production of solar panels, batteries, inverters, and electric vehicles. He also stated that 85% of the plants that manufacture solar panels and batteries are located in Republican districts. Berger concluded by praising the IRA, particularly the tax credit for manufacturing (45X), which has played an instrumental role in growing and building domestic manufacturing plants in the U.S.
Despite the potential for federal policy changes, the solar industry will undoubtedly play an increasingly vital role in global energy systems. With that in context, let’s take a look at the 10 best solar energy stocks to buy now.
An aerial view of a large building complex with solar panels on the roof, symbolizing the investments in the utilities sector.
Our Methodology
To compile our list of the 10 best solar energy stocks to buy now, we used Finviz and Yahoo stock screeners, clean energy ETFs, and online rankings to compile an initial list of 25 solar energy stocks. Then we used Insider Monkey’s Hedge Fund database to rank 10 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).
10 Best Solar Energy Stocks To Buy Now
10. Shoals Technologies Group, Inc. (NASDAQ:SHLS)
Number of Hedge Fund Investors: 27
Shoals Technologies Group, Inc. (NASDAQ:SHLS) specializes in electrical balance of systems (EBOS) solutions for solar energy projects. The company provides key components such as combiner boxes, inline fuses, and wire harnesses, which are essential for solar power generation systems. Shoals Technologies Group, Inc. (NASDAQ:SHLS) has established itself as a key player in the utility-scale solar market by offering a comprehensive range of products and services that enhance the efficiency, reliability, and cost-effectiveness of solar installations.
Recognizing the growing demand for solar solutions in the commercial, industrial, and institutional (CC&I) sectors, Shoals Technologies Group, Inc. (NASDAQ:SHLS) is making significant investments to address this market opportunity. The CC&I market, while smaller than the utility-scale solar market, is growing at an attractive pace and leverages many of the company’s existing strengths and capabilities. Shoals Technologies Group, Inc. (NASDAQ:SHLS) has built an experienced commercial and product development team dedicated to serving the CC&I market and has already begun shipping products to this segment. The company has also signed an agreement with one of the largest distributors in the space, further solidifying its position in the market.
Shoals Technologies Group, Inc. (NASDAQ:SHLS) is at the forefront of technological advancement in the solar industry, with a strong focus on product innovation. One of the key areas of development is the transition to 2kV electrical systems, which are designed to increase the voltage in solar projects to 2,000 volts. This advancement is expected to significantly improve the efficiency, sustainability, and cost-effectiveness of solar installations. The company has initiated pilot programs of this technology with industry leaders such as GE Vernova.
9. Fluence Energy, Inc. (NASDAQ:FLNC)
Number of Hedge Fund Investors: 27
Fluence Energy (NASDAQ:FLNC) is a global leader in energy storage technology, specializing in battery-based energy storage solutions. The company designs, manufactures, and delivers energy storage systems for solar energy along with software that enhances the efficiency, reliability, and sustainability of energy networks. The company’s products play a key role in improving grid stability, integrating renewable energy sources, and managing energy costs effectively.
Fluence Energy (NASDAQ:FLNC) is actively working to build a resilient and localized supply chain in the United States. The company has established six production facilities across the US, including a dedicated battery module production line in Utah and two battery cell production lines in Tennessee. These facilities utilize advanced robotics and automation technology to improve production efficiency and ensure high product quality. By localizing its supply chain, Fluence Energy (NASDAQ:FLNC) aims to reduce dependence on Chinese imports, minimize exposure to potential tariff hikes, and take advantage of incentives provided by the Inflation Reduction Act (IRA).
Fluence Energy (NASDAQ:FLNC) is also broadening its market reach by expanding its geographic presence and growing its project pipeline. The company is actively pursuing opportunities in the US, Germany, Australia, Canada, and Chile. Furthermore, Fluence Energy (NASDAQ:FLNC) is prioritizing recurring services and digital business offerings to drive long-term growth and stability.
8. Clearway Energy, Inc. (NYSE:CWEN)
Number of Hedge Fund Investors: 29
Clearway Energy, Inc. (NYSE:CWEN) is a renewable energy company that develops, owns, and operates renewable energy generation facilities. The company’s portfolio comprises 11.4 GW of gross generating capacity in 26 states, including 9 GW of wind, solar, and battery energy storage assets.
Clearway Energy, Inc. (NYSE:CWEN) is making significant strides in expanding its solar business, as evidenced by its recent investment in the Pine Forest Solar and Storage Project. This project is located in the fast-growing ERCOT (Electric Reliability Council of Texas) power market and represents a strategic addition to the company’s portfolio. The solar capacity of the Pine Forest project is fully contracted for an average of approximately 20 years, with the majority of the contracts secured with leading information technology companies.
These long-term agreements ensure stable and predictable revenue streams, which are crucial for the company’s financial health and growth. Furthermore, the project’s battery storage capabilities will complement Clearway Energy, Inc.’s (NYSE:CWEN) existing assets in ERCOT and enhance the company’s ability to manage energy supply and demand efficiently.
7. Nextracker Inc. (NASDAQ:NXT)
Number of Hedge Fund Investors: 32
Nextracker Inc. (NASDAQ:NXT) is a leading provider of solar tracker and software solutions used in utility-scale and ground-mounted solar power plants. The company’s smart tracking systems optimize solar panel positioning to maximize energy output throughout the day. Nextracker Inc. (NASDAQ:NXT) caters to large-scale solar energy developers and independent power producers.
Nextracker Inc. (NASDAQ:NXT) has accelerated the availability of its 100% domestically manufactured tracker, which allows customers to achieve a higher score on domestic content and capture a 10% bonus investment tax credit (ITC). This capability provides substantial financial benefits to U.S. customers and makes the company’s products highly attractive.
Nextracker Inc. (NASDAQ:NXT) is investing heavily in R&D and is committed to continuous innovation and product development to stay ahead in the highly competitive solar market. The company has recently launched several new products, including the NX Horizon, NXTR 1.5, NX Horizon Low Carbon Tracker, NX Hail Pro-75, and two new NX Foundation technologies. These products have been successfully deployed in the field and enable quicker, safer, and more efficient solar project development on a wide range of soil types. The company has also released new features such as Zonal Diffuse and Split Boost for TrueCapture, which increases energy generation.
Nextracker Inc. (NASDAQ:NXT) has also established three global design facilities, including the recently inaugurated Nextracker Center of Solar Excellence in Hyderabad, India, which serves as a state-of-the-art laboratory for developing and commercializing PV technologies tailored to regional needs. This global network enables the company to serve projects in over 40 countries, ensuring that its products are optimized for local conditions and customer requirements.
6. Array Technologies, Inc. (NASDAQ:ARRY)
Number of Hedge Fund Investors: 36
Array Technologies, Inc. (NASDAQ:ARRY) specializes in solar tracking systems that increase the efficiency of solar energy projects. The company’s primary product, the DuraTrack system, allows solar panels to follow the sun’s path for maximum energy capture. Array Technologies, Inc. (NASDAQ:ARRY) earns revenue from hardware sales and post-installation services. The company’s clients include utility-scale solar developers and independent power producers.
Array Technologies, Inc. (NASDAQ:ARRY) is continuously investing in product innovation to stay ahead of market demands and address the evolving needs of its customers. One of the most notable recent developments is the introduction of the 77-degree tracker, which offers the steepest stow angle in the industry. This advancement is particularly significant in regions prone to extreme weather events, such as hail storms, where the higher stow angle can significantly reduce the risk of damage to solar modules. Additionally, the company has launched SkyLink, an eight-row string-powered solution featuring DC motors and ZigBee wireless communications.
Array Technologies, Inc. (NASDAQ:ARRY) is focusing on expanding its presence in international markets, where the demand for utility-scale solar solutions is growing. In Brazil, the company has achieved a leading market share for distributed generation. In Europe, despite modest overall market demand, Array Technologies, Inc. (NASDAQ:ARRY) is confident in its targeted customer activities and expects to see share growth in the coming quarters. The company is also investing in sales and marketing talent to further penetrate these markets and drive additional business.
5. Enphase Energy, Inc. (NASDAQ:ENPH)
Number of Hedge Fund Investors: 38
Enphase Energy, Inc. (NASDAQ:ENPH) is a global energy technology company known for its microinsolar microinverter systems, which convert solar energy into usable electricity. The company also offers energy storage systems and monitoring software for residential and commercial solar installations. The company generates revenue through product sales and subscription-based services.
Enphase Energy, Inc. (NASDAQ:ENPH) is actively expanding its market reach both domestically and internationally. While the U.S. remains its primary market, the company is making significant inroads into other regions, particularly Europe and Australia, where the adoption of residential solar energy is on the rise. Enphase Energy, Inc. (NASDAQ:ENPH) has established strategic partnerships with local distributors and installers to enhance its presence in these markets. Additionally, the company is exploring opportunities in emerging markets such as India and Southeast Asia, where the demand for sustainable energy solutions is growing rapidly. By diversifying its customer base and entering new markets, Enphase Energy, Inc. (NASDAQ:ENPH) aims to mitigate the impact of regional headwinds and ensure sustained growth.
Enphase Energy, Inc.’s (NASDAQ:ENPH) supply chain relies heavily on Chinese suppliers, making it vulnerable to disruptions in the U.S.-China trade relationship. To mitigate this risk, the company is diversifying its supply chain and exploring alternative sourcing options. Additionally, the company is closely monitoring the Federal Reserve’s monetary policy and adjusting its business strategies accordingly.
4. Sunrun Inc. (NASDAQ:RUN)
Number of Hedge Fund Investors: 43
Sunrun Inc. (NASDAQ:RUN) is one of the largest residential solar and battery storage companies in the United States. The company provides solar panel installations, energy storage systems, and energy services through long-term subscription-based leases, power purchase agreements (PPAs), and direct sales. Sunrun Inc. (NASDAQ:RUN) sells solar power to residential customers and offers financing solutions.
Sunrun Inc. (NASDAQ:RUN) is transitioning into a multi-product company and is focusing on upselling and cross-selling to expand its revenue. The company is actively testing and scaling new products and services for new customers and is offering storage solutions for its existing customer base. Approximately 87% of its one million customers are not yet equipped with the company’s storage systems, which presents a large untapped potential for the company to increase its revenue streams. This strategic focus on storage is not only enhancing the customer value proposition by providing backup power but is also a part of the company’s higher margin strategy. Sunrun Inc. (NASDAQ:RUN) is leveraging its app to facilitate these sales, making it easy and cost-effective for customers to sign up for additional products.
Sunrun Inc. (NASDAQ:RUN) is also partnering with leading home builders to integrate solar and storage solutions into new homes. The company is currently working with 9 of the top 10 new home builders in California and over half of the top 20 home builders in the U.S. These partnerships are crucial in expanding the company’s market reach and ensuring that new homeowners have access to clean, affordable, and resilient energy from the start.
3. First Solar, Inc. (NASDAQ:FSLR)
Number of Hedge Fund Investors: 59
First Solar, Inc. (NASDAQ:FSLR) is a leading manufacturer of thin-film solar modules, primarily used in utility-scale solar projects. The company’s advanced photovoltaic technology delivers high energy efficiency and durability. First Solar, Inc. (NASDAQ:FSLR) generates revenue from selling solar modules, developing solar power plants, and offering operations and maintenance services. The company’s customers include utility-scale project developers, power plant owners, and government organizations.
First Solar, Inc. (NASDAQ:FSLR) has made significant strides in expanding its manufacturing capacity and technological capabilities. The company recently inaugurated its new $1.1 billion Alabama facility, which will add 3.5 gigawatts of vertically integrated solar manufacturing capacity when fully scaled. Additionally, the company is on track to begin operations at its Louisiana facility in the second half of 2025, contributing to its goal of achieving over 14 gigawatts of annual U.S. nameplate capacity and over 25 gigawatts of global nameplate capacity by 2026.
Furthermore, First Solar, Inc. (NASDAQ:FSLR) continues to lead in the development of next-generation thin-film photovoltaic technologies. The company is launching CuRe production at its Ohio facility, with plans to produce and sell approximately 0.4 gigawatts of CuRe product by Q1 of 2025. The company is also advancing its perovskite technology through a new development line in Perrysburg, Ohio, which will simulate in-line manufacturing conditions and accelerate the development of this breakthrough technology.
2. NextEra Energy Inc. (NYSE:NEE)
Number of Hedge Fund Investors: 69
NextEra Energy Inc. (NYSE:NEE) is a global leader in renewable energy, specializing in wind and solar power generation. The company operates through its subsidiaries, including Florida Power & Light and NextEra Energy Resources. NextEra Energy Inc. (NYSE:NEE) is recognized for its massive investments in clean energy infrastructure and commitment to a sustainable future.
NextEra Energy Inc. (NYSE:NEE) is expanding its renewable energy portfolio by partnering with Phillips 66 to power its refinery in Rodeo, California with a new solar facility. This 30.2-megawatt solar plant, set to begin operations in January 2025, will be built on 88 acres of land adjacent to Phillips 66’s facility in the San Francisco Bay Area. The facility, consisting of more than 70,000 solar modules, is expected to generate around 60,000 megawatt hours of electricity annually. By reducing the refinery’s grid power demand by half and lowering carbon dioxide emissions by approximately 33,000 metric tons per year, the solar plant will play a crucial role in Phillips 66’s transition to more sustainable and renewable energy sources.
NextEra Energy Inc.’s (NYSE:NEE) expertise in developing and operating large-scale solar projects positions it as a leader in the industry. The company is investing heavily in the development of new solar projects, with a focus on low-cost and battery storage. NextEra Energy Inc. (NYSE:NEE) has also announced incremental framework agreements with two Fortune 50 customers for the potential development of renewables and storage projects, totaling up to 10.5 gigawatts till 2030.
1. Constellation Energy Corporation (NASDAQ:CEG)
Number of Hedge Fund Investors: 78
Constellation Energy Corporation (NASDAQ:CEG) is a leading energy provider in the United States, specializing in power generation, wholesale energy sales, and retail energy supply. The company operates a diverse energy portfolio, including nuclear, solar, wind, and natural gas facilities. Constellation Energy Corporation (NASDAQ:CEG) owns and operates one of the largest solar power facilities in the United States, which can generate a total capacity of 242 megawatts (MW).
Constellation Energy Corporation (NASDAQ:CEG) is focusing on long-term agreements to provide renewable energy solutions to companies, ensuring a consistent revenue stream while helping these companies achieve their carbon reduction goals. Through its Constellation Offsite Renewables (CORe) product, the company offers offsite renewable energy projects. This approach also supports the development of new renewable assets. For example, the company recently announced an agreement with W. L. Gore & Associates on a 55-megawatt (MW) renewable energy project. Through a 20-year agreement, W. L. Gore & Associates will procure approximately 110,000 MWh hours of energy per year and will receive energy and renewable energy certificates (RECs) from Constellation Energy Corporation’s (NASDAQ:CEG) Glover Creek Solar Project in Metcalfe County, Kentucky.
Constellation Energy Corporation (NASDAQ:CEG) is also forging strategic partnerships and collaborations to accelerate the development and deployment of solar energy projects with utilities, state governments, and other companies. The company’s focus on solar energy is part of its broader strategy to provide innovative and flexible energy solutions that can be tailored to the specific needs of its customers.
While we acknowledge the potential of Constellation Energy Corporation (NASDAQ:CEG) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CEG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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