We recently published a list of 10 Best Solar Energy Stocks To Buy Now. In this article, we are going to look at where NextEra Energy Inc. (NYSE:NEE) 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).
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.
Overall, NEE ranks 2nd on our list of best solar energy stocks to buy now. While we acknowledge the potential of NEE 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 NEE 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.
