Across political lines in the US and internationally the move towards renewable energy is becoming more mainstream. Rising concern about climate change, advocacy for green energy, government subsidies, and stimulus packages offered to green energy projects are set to prop up the solar energy sector.
Despite the rising costs of materials globally, the renewable energy trend seems assured; by 2026, global renewable electricity capacity is set to grow 60% compared to 2020 levels, as reported by the International Energy Agency. This growth spurt will result in 4,800 GW of renewable energy power or the total current global capacity of fossil fuel and nuclear energy sources.
With such lofty investment goals and ensured growth, ESG investments should have their place in a shrewd investor’s portfolio. The following three stocks have a lot of potential in this wave of renewable growth.
Cream of the crop
Finbold reported on three promising solar stocks earlier, with the performance of all three being stellar. Now, we’ll look at an additional set of stocks that look promising in light of increased investments in the sector.
1. Brookfield Renewable Partners (NYSE: BEP)
Companies will need to invest serious capital to move away from fossil fuels and switch to renewables; likewise, growth stocks in the sector will have to follow suit. Brookfield seems unstoppable, gobbling up renewable projects whenever an opportunity arises. Recently, they acquired a US-based clean energy producer, Urban Grid, for $650 million.
With this new acquisition, Brookfield said that their renewable capacity would stand at 31,000 MW capacity in the US alone. Such a strong portfolio of renewable projects creates a competitive moat around Brookfield that will be hard to beat. The stock currently stands at $40.98.
Moreover, the stock is currently trading with ample volume, and chart analysis shows us that the momentum is above 20-50-200 day Simple Moving Averages (SMAs). Bing power seems sustainable, and the stock is in line with predictions enjoying short-term strength.
The consensus on the stock is a ‘Moderate Buy‘ based on the views of 11 experts who made a prediction for BEP stock in the past three months.
2. First Solar (NASDAQ: FSLR)
With its headquarters in Arizona, First Solar is an American company providing utility-scale photovoltaic power plants, solar panels, and support services.
Solar manufacturers will have a generous handout in light of the Biden administration’s $1.9 trillion Build Back Better legislation. Taxpayers will subsidize 50% of 6 GW solar capacity production annually.
Chart analysis shows us that the stock moved above 20-50-200 SMAs and has broken out of the lower channels. With potential long-term headwinds and higher trading volume, the stock seems to be poised for a breakout.
Analysts have a combined Hold rating on the stock at the average price of $81.13. More bullish analysts see a lot of upside to $120.00, which may coincide with Biden’s plan.
3. Enphase Energy Inc. (NASDAQ: ENPH)
On Tuesday, March 22nd, Enphase received bullish coverage by Wells Fargo (NYSE: WFC) analysts, stating that long-term tailwinds are favorable for the stock, with their technology and investments being second to none.
The price target placed on the stock by analysts from Wells Fargo stands at $313 a share; currently, the stock has been trading in a channel with a recent breakout to $190 a share.
Charts show a move above 20-50-200 SMAs with a breakout on the way. Analysts are also in agreement with this stock, with 17 out of 21 analysts giving the stock a resounding Buy.
Headwinds for solar stocks
With such strong growth poised to lift all solar stocks and global scramble to transition from fossil fuels to more renewable sources, the sector seems to be booming.
Not all solar stocks are created equal – some are simply propped up by various subsidies, others have poor technology. The ones above represent the cream of the crop that readers would be well advised to have on their watchlist.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.