8 Most Promising Clean Energy Stocks According to Hedge Funds

6. Enphase Energy (NASDAQ:ENPH)  

Number of Hedge Fund Holders: 42  

Enphase Energy (NASDAQ:ENPH) is a global energy technology company specializing in solar microinverters, energy storage solutions, and energy management devices. Its microinverters convert direct current (DC) from solar panels into alternating current (AC), playing a critical role in optimizing solar energy systems by enhancing efficiency and reliability, while also being easy to install. Enphase Energy (NASDAQ:ENPH) is a market leader in residential solar across the U.S., Europe, and emerging markets in Asia.

The company is strategically positioned to benefit from the U.S. Inflation Reduction Act (IRA), as its microinverters can help customers qualify for a 10% Investment Tax Credit (ITC) under the Domestic Content Bonus Credit provisions. This advantage is expected to boost sales and improve gross margins, particularly in Q4.

In Q2, Enphase Energy (NASDAQ:ENPH) reported revenue and earnings slightly below expectations due to lower sales in Europe, though it maintained a strong gross margin of 47.1%, surpassing forecasts. Despite competition, Enphase Energy’s (NASDAQ:ENPH) microinverter technology remains a top choice among consumers and continues to capture market share.

The new “Net Energy Metering 3.0” policy in California, which incentivizes homeowners to use their solar energy instead of selling it back to the grid, has led to a significant increase in demand for Enphase Energy’s (NASDAQ:ENPH) energy storage systems. The company saw a 32% increase in U.S. revenue in Q2 and has already secured 85% of its projected revenue for Q3.

Enphase Energy’s (NASDAQ:ENPH) suite of products, including micro-inverters, energy management software, and battery storage solutions, is expected to drive continued growth in the years ahead. Industry analysts are bullish on the company’s stock price and have a consensus Buy rating at a target price of $126.60, which implies a 22.52% increase from its current level.