We recently published a list of 10 Best Solar Energy Stocks To Buy Now. In this article, we are going to look at where Clearway Energy, Inc. (NYSE:CWEN) 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).
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.
Overall, CWEN ranks 8th on our list of best solar energy stocks to buy now. While we acknowledge the potential of CWEN 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 CWEN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.