In this article, we will discuss 10 best wind power and solar stocks to buy. You can skip our detailed analysis of the wind and solar segments in the energy sector and go directly to 5 Best Wind Power and Solar Stocks To Buy.
Rallying oil prices, global warming, and the global transition toward electrification to achieve carbon neutrality are only a few factors to name that are causing the demand for alternative fuels to skyrocket. Consequently, investors are allocating sizeable portions of their investment portfolios to wind and solar stocks.
Renewable Energy Market Analysis: Size, Key Trends, Drivers, and Major Players
According to a market report by Allied Market Research, a leading market intelligence agency, the global renewable energy market was valued at $881.7 billion in 2020 and is expected to grow to $1.97 trillion by 2030, at a CAGR of 8.4% over the forecasted period. Precedence Research, another prominent market intelligence firm, reported that the global renewable energy market grew to $952.16 billion in 2021, and is on an upward trajectory to hit $1.99 trillion by 2030 at a CAGR of 8.6% from 2022 to 2030. Both reports identified that currently, renewable energy serves a mere 7% of the world’s energy demands, and as investments in solar, wind, and hydroelectric power infrastructure rise, the demand for renewable energy is expected to grow at an exponential rate in the foreseeable future.
By region, the Asia-Pacific dominated the renewable energy market share, having a share of approximately 35% in 2020 and 2021. It is forecasted that the North American market for renewable energy will grow significantly by 2030, in the wake of government regulations regarding clean fuel standards, biofuel production, tax incentives, and US green energy targets. Moreover, it was found that the costs for solar installations plummeted by 85% in the past decade, making it one of the most cost-effective energy sources. The innovations in solar energy storage and expansion of community solar projects in American markets are expected to further drive this growth.
Photo by Jason Blackeye on Unsplash
The major players in the wind and solar markets include Enphase Energy, Inc. (NASDAQ:ENPH), NextEra Energy, Inc. (NYSE:NEE), and General Electric Company (NYSE:GE).
Our Methodology
To come up with our list of the 10 best wind power and solar stocks to buy, we read multiple research reports published by accredited market intelligence agencies and identified the major players highlighted in them. We narrowed down our selection to 10 companies that were the most active in the renewable energy industry. We gauged “activeness” from the recent news that presented upcoming growth catalysts for each company.
Furthermore, we gave weight to the analyst and investor sentiment for each stock before naming it among the 10 best wind power and solar stocks to buy. We believe both hedge fund and analyst sentiment to be critical indicators of a stock’s performance, and believe these metrics can benefit our readership in making informed investment decisions.
Best Wind Power and Solar Stocks To Buy
10. Northland Power Inc. (OTC:NPIFF)
Number of Hedge Fund Holders: N/A
Northland Power Inc. (OTC:NPIFF) operates as an independent power producer and develops, builds, owns, and operates clean and green power projects in North America, Europe, Latin America, and Asia. The company produces electricity from renewable resources, such as wind, solar, or hydropower, as well as clean-burning natural gas and biomass. The company is piling into wind projects and announced a strategic collaboration with RWE Renewables in January 2022. Under the terms of the agreement, Northland Power Inc. (OTC:NPIFF) will co-develop multiple offshore wind projects in the German North Sea with a total gross capacity of 1.3GW.
On February 8, 2022, Northland Power Inc. (OTC:NPIFF) announced that it plans to complete roughly 366 MW of additional capacity in construction in 2022. The company also has almost 3 GW worth of projects that are scheduled for completion within the next two years. Northland Power Inc. (OTC:NPIFF) is on its way to increase its total gross capacity by two-folds to 6.5 GW by 2027, which makes it one of the best wind and solar stocks to buy now.
Analysts are becoming keen on Northland Power Inc.’s (OTC:NPIFF) long-term drivers and are recognizing the company’s already achieved milestones. In April 2022, National Bank analyst Rupert Merer raised his price target on Northland Power Inc. (OTC:NPIFF) to C$45 from C$44 and reiterated an Outperform rating on the shares.
Northland Power Inc. (OTC:NPIFF) is a prominent name in the wind and solar industry. Other stocks that are dedicated to driving shareholder returns include Enphase Energy, Inc. (NASDAQ:ENPH), NextEra Energy, Inc. (NYSE:NEE), and General Electric Company (NYSE:GE).
9. SunPower Corporation (NASDAQ:SPWR)
Number of Hedge Fund Holders: 20
SunPower Corporation (NASDAQ:SPWR) is a solar technology and energy services provider that offers solar, storage, and home energy solutions to customers in the United States and Canada. This May, the company announced a partnership with leading furniture designer, IKEA U.S., to allow customers of IKEA to purchase home solar solutions and generate and store their own renewable energy. SunPower Corporation (NASDAQ:SPWR) is making strides in the renewables sector and is becoming a prominent name, which makes it the ninth-best wind power and solar stock to buy.
On May 5, SunPower Corporation (NASDAQ:SPWR) reported its earnings for the fiscal first quarter of 2022 in which the company outperformed revenue estimates by $32.72 million. According to the company’s report, SunPower Corporation (NASDAQ:SPWR) registered an EPS of $0.02 and generated revenues of $350.28 million, up 14.32% year over year from $306.40 million.
Investment Bank Piper Sandler is watching SunPower Corporation (NASDAQ:SPWR) closely. On April 21, analyst Kashy Harrison raised her price target on SunPower Corporation (NASDAQ:SPWR) to $24 from $20 and maintained a Neutral rating on the shares.
By the end of the fourth quarter of 2021, 20 hedge funds were long SunPower Corporation (NASDAQ:SPWR). The total stakes of these funds were valued at roughly $118 million. Of these, D E Shaw was the most prominent stakeholder in the company, having stakes of $67.41 million at the end of December 2021.
8. TPI Composites, Inc. (NASDAQ:TPIC)
Number of Hedge Fund Holders: 21
TPI Composites, Inc. (NASDAQ:TPIC) is a leading manufacturer of wind blades, and related precision molding and assembly systems for the wind energy market. The company has made over 75,000 wind blades as of 2001 and boasts an excellent field performance record, which makes it rank among the best wind power and solar stocks to buy now.
Roth Capital analyst Justin Clare recently raised his price target on TPI Composites, Inc. (NASDAQ:TPIC) to $16 from $11 and also upgraded the stock Buy from Neutral. Clare raised his profitability forecasts for 2022 and 2023 and told investors that he sees potential for the TPI Composites, Inc. (NASDAQ:TPIC) to benefit from positive policy developments in Europe and the U.S. which will drive demand for its products over the medium and long term.
TPI Composites, Inc. (NASDAQ:TPIC) is rising in popularity among elite hedge funds. Insider Monkey found 21 hedge funds that held stakes in the company at the close of Q4 2021. The total value of these stakes came in at $40.09 million.
As of March 31, 2022, Sustainable Insight Capital Management is the leading stakeholder in TPI Composites, Inc. (NASDAQ:TPIC). The investment covers 0.11% of the fund’s 13F portfolio.
Investment management firm Saturna Capital recently published its “Amana Funds” fourth-quarter 2021 investor letter in which it shared its insights on TPI Composites, Inc (NASDAQ:TPIC). Here is what the firm said:
“For both the fourth quarter and the full year, the Fund’s largest detractors were not concentrated to any singular industry or area. The dispersion of these detractors across geographies shows how investing in emerging markets can be idiosyncratic. TPI Composites was the Fund’s largest detractor in the fourth quarter and for the full year. A maker of wind turbine blades, TPI was particularly hard-hit by commodity inflation and challenged supply chains, leading the company to recapitalize in the fourth quarter. While the company continues to face near-term headwinds, this recapitalization should support the company’s longterm position as a leading supplier to the world’s largest wind turbine manufacturers.”
7. Brookfield Renewable Partners L.P. (NYSE:BEP)
Number of Hedge Fund Holders: 21
Brookfield Renewable Partners L.P. (NYSE:BEP) owns a 21,000 MW portfolio of renewable power generating facilities that spans over North America, Colombia, Brazil, Europe, India, and China. The company generates electricity through hydroelectric, wind, solar, distributed generation, pumped storage, cogeneration, and biomass sources. The company’s strong portfolio with a hefty gross capacity makes it a leader in the renewables space.
On May 6, Brookfield Renewable Partners L.P. (NYSE:BEP) released earnings for the fiscal fiscal first quarter of 2022. The company saw revenue growth of 11.37% year over year and reported quarterly revenues of $1.14 billion, outperforming market consensus by $58.29 million.
Investment bank TD Securities expressed its bullish sentiment towards Brookfield Renewable Partners L.P. (NYSE:BEP) post the company’s robust Q1 results. Analyst Sean Steuart upgraded the stock to Buy from Hold and reiterated his $41 price target on the shares. Steuart contended that he sees the company well-positioned to withstand near-term sector headwinds and gain from long-term tailwinds such as the rising adoption of clean power and hefty investments in global decarbonization efforts.
Hedge funds are upping their stakes in Brookfield Renewable Partners L.P. (NYSE:BEP). At the end of the fourth quarter, 21 hedge funds held long positions in Brookfield Renewable Partners L.P. (NYSE:BEP) which were worth $234.36 million. This is compared to 17 positions in the preceding quarter with stakes worth $145.16 million. The hedge fund sentiment for the stock is positive.
As of March 31, 2022, Quaero Capital is the dominating shareholder in Brookfield Renewable Partners L.P. (NYSE:BEP). The fund’s stakes totaled $1.25 million which represents 0.78% of its investment portfolio.
Here is what ClearBridge Investments had to say about Brookfield Renewable Partners L.P. (NYSE:BEP) in its “Global Infrastructure Income Strategy” first-quarter 2022 investor letter:
“Brookfield Renewable is a pure-play renewables operator and developer headquartered in Canada, 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. Brookfield’s development pipeline stands at 18,000 MWs, providing confidence the company can meet its targeted double- digit cash flow growth through to 2025. The market narrative around the energy transition and energy security, along with increasing fossil fuels prices which have driven greater focus on switching to renewables, helped Brookfield shares in the quarter.”
6. Sunrun Inc. (NASDAQ:RUN)
Number of Hedge Fund Holders: 31
Sunrun Inc. (NASDAQ:RUN) is a leading American provider of residential solar panels and battery storage solutions. On May 5, the company raised its fiscal year 2022 view of installed solar energy capacity to 25%, up from the company’s prior view of 20%, which implies at least 990 MW worth of installments. By the end of Q2 2022, Sunrun Inc. (NASDAQ:RUN) expects installations to range between 235 MW and 245 MW.
Morgan Stanley analyst Stephen Byrd shared his views on the recent announcement made by Sunrun Inc. (NASDAQ:RUN) and said it was a “significant positive surprise to the investment community”. The analyst noted that the company’s newly issued guidance exceeds consensus and his estimate of about 950 MW, and reiterated an Overweight rating and $89 price target on the stock.
On May 4, 2022, Sunrun Inc. (NASDAQ:RUN) announced that its quarterly revenues grew 48.09% year over year in the fiscal first quarter of 2022. The company reported revenues of $495.78 million and beat estimates by $94.18 million. The company is experiencing strengthening demand for its products even amidst global sector headwinds.
Insider Monkey found that 31 hedge funds held stakes in the company at the close of Q4 2021. The total value of these stakes amounted to $1.02 billion.
Quaero Capital is the top shareholder in Sunrun Inc. (NASDAQ:RUN) as of the end of March 2022. The fund’s stakes were valued at $2.95 million, up 11% from its Q4 2021 stakes.
Sunrun Inc. (NASDAQ:RUN) is becoming a compelling stock option for elite hedge fund investors. Other stocks that investors are bullish on are Enphase Energy, Inc. (NASDAQ:ENPH), NextEra Energy, Inc. (NYSE:NEE), and General Electric Company (NYSE:GE).
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Disclose. None. 10 Best Wind Power and Solar Stocks To Buy is originally published on Insider Monkey.
