The solar energy industry has grown rapidly even as fossil fuels remain the dominant source of global energy use. Solar industry companies come from multiple sectors, including utilities, industrial, and energy, and include popular stocks such as SolarEdge Technologies (SEDG) and SunRun Inc. (RUN). While some large utilities and energy companies have solar and renewable energy divisions, these businesses typically are not included in the industry’s listings because the parent’s primary focus is not solar.
Solar stocks, represented by the Invesco Solar ETF (TAN), have significantly underperformed the broader market over the past year. TAN has provided a total return of -6.3% over the last 12 months, well behind the Russell 1000’s total return of 26.6%. These market performance numbers and all statistics in the tables below are as of Dec. 14, 2021.
Here are the top three solar stocks with the best value, the fastest growth, and the most momentum.
These are the solar stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Solar Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Daqo New Energy Corp. (DQ)||41.93||3.1||4.7|
|ReneSola Ltd. (SOL)||5.92||0.4||5.1|
|SunPower Corp. (SPWR)||21.19||3.7||12.4|
- Daqo New Energy Corp.: Daqo New Energy is a China-based solar energy company that manufactures polysilicon for sale to manufacturers of solar cells and modules.
- ReneSola Ltd.: ReneSola is an international renewable energy company that builds and manages energy projects. The company primarily focuses on the development, construction management, and financing of solar power projects. The company reported results on Dec. 7 for Q3 2021, ended Sept. 30. Net income attributable to ReneSola fell by plummeted year-over-year (YOY) as net revenues rose sharply. The company attributed the revenue increase largely to the sale of solar projects in the U.S. and Poland.
- SunPower Corp.: SunPower is an integrated solar products, systems, and services company that sells primarily to residential and commercial customers worldwide. The company designs and manufactures solar panels and systems. On Dec. 8, SunPower launched SunPower Financial, a financial services institution focused on making renewable energy affordable to more American homeowners. SunPower Financial will offer a 0% interest Annual Percentage Rate (APR) product to certain customers. The U.S. residential solar market is expected to quadruple by 2030.
These are the top solar stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
|Fastest Growing Solar Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Daqo New Energy Corp. (DQ)||41.93||3.1||1,310||366.7|
|Azure Power Global Ltd. (AZRE)||18.85||0.9||1,730||16.4|
|Sunrun Inc. (RUN)||35.50||7.3||-60.7||109.2|
- Daqo New Energy Corp.: See above for company description.
- Azure Power Global Ltd.: Azure Power Global is an India-based independent solar power producer. It develops, builds, and operates utility scale, micro-grid, and other kinds of solar projects. The earnings figures above are as of Azure’s Q1 FY2022 earnings release.
- Sunrun Inc.: Sunrun is a home solar panel and battery company. It designs, develops, installs, and maintains residential solar energy systems throughout the U.S. For Q3 2021, ended Sept. 30, Sunrun reported widening net losses as total revenue more than doubled YOY. The company attributed the growth in revenue to improvement in its customer base and customer margins.
These are the solar stocks that had the highest total return over the last 12 months.
|Solar Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|GCL-Poly Energy Holdings Ltd. (GCPEF)||0.33||8.1||119.9|
|Enphase Energy Inc. (ENPH)||202.32||27.3||39.5|
|Atlantica Sustainable Infrastructure PLC (AY)||36.45||4.1||11.6|
|Invesco Solar ETF (TAN)||N/A||N/A||-6.3|
- GCL-Poly Energy Holdings Ltd.: GCL-Poly Energy is a Hong Kong-based solar photovoltaic company. It supplies photovoltaic materials, such as polysilicon and silicon wafers, and offers solar system solutions. The company also owns several large-scale solar farms globally.
- Enphase Energy Inc.: Enphase Energy is a global energy technology company that brings solar, batteries, and software together in one complete package. It supplies microinverter-based, solar-plus-storage systems. On Dec. 13, Enphase announced the launch of the Enphase Installer Network (EIN) in Mexico. EIN is a network of trusted installers provided with special digital components to improve the bottom line for Enphase product installers. The company says Mexico is key to its international growth strategy.
- Atlantica Sustainable Infrastructure PLC: Atlantica Sustainable Infrastructure is a U.K.-based company that sells solar power products. It operates transportation and transmission systems for a variety of power sources. Atlantica also owns and operates natural gas fields.
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