We recently published a list of 10 Best Solar Energy Stocks To Buy Now. In this article, we are going to look at where Nextracker Inc. (NASDAQ:NXT) stands against other best solar energy stocks to buy now.
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.
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).
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.
Overall, NXT ranks 7th on our list of best solar energy stocks to buy now. While we acknowledge the potential of NXT to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NXT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
