Solar stocks have had quite a solid year in the stock market so far. And it’s not difficult to see why. You see, the technology to develop these energy sources are getting cheaper. Due to environmental reasons, coal has become less important and oil has become less profitable than it was decades ago. Solar photovoltaic (PV) or panels have had an 88% decrease in cost over the last decade. The decline in price is also attributed to higher module efficiency and greater labor productivity. This incentivizes more people and businesses to power their buildings with solar energy. So the question here is, why bother with solar when oil is cheap?
Climate change is adding new urgency to the effort to move to green power. And this could be the reason why some of the top solar stocks are posting strong gains this year. We know there are numerous environmental benefits of adopting solar energy. The more obvious reason being is that they do not generate harmful emissions like traditional fuels. With such good prospects in the solar energy industry, even oil and gas companies have started investing in solar. Energy companies like BP (BP Stock Report) and Shell (RDSA Stock Report) have already started diversifying their energy portfolios. BP plans to develop 10 GW of solar projects by 2023. Shell has started investing in its solar platforms, Silicon Ranch and Cleantech Solar.
All things considered; the prospects of the solar energy industry present an interesting opportunity for investors. If you would like to have a pie in the future of renewable energy, solar is certainly worth adding to your portfolio. Could these 3 solar energy stocks bring you greenbacks in a green way?
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Sunrun Inc. (RUN Stock Report) develops and sells residential solar electricity as its main source of revenue. Recently, the company announced a partnership with the French fashion company Chanel. The deal is to install 30 MW of solar capacity for low-income multifamily homes in California. Upon completion, the project will be able to provide solar power to about 30,000 low-income residents. Following the announcement, Sunrun shares have been on the uptrend, gaining 10% since Monday.
This solar stock has enjoyed a year-to-date increase of 413% and shows no signs of stopping. Sunrun’s Q2 2020 financial report pointed to net earning assets of $1.6 billion, an increase of 14% year-over-year. Their customers have also increased by 21% year-to-year, supporting the fact that more people are turning to solar energy.
Sunrun is acquiring Vivint Solar (VSLR Stock Report), another provider of residential solar electricity, for $3.2 billion. The acquisition is expected to be completed by Q4 2020. Vivint, with its direct sales channel and healthy margins, offers Sunrun an expanded market. It will also give Sunrun the opportunity to capitalize on Vivint’s higher storage attachments and grid services. Through this acquisition, Sunrun’s CEO states that it is a transformational opportunity to generate consumer and shareholder value. Despite the run-up, today, will you consider adding RUN stock to your portfolio?Solar Energy Stocks To Buy [Or Sell] Right Now: Enphase Energy
Shares of Enphase Energy (ENPH Stock Report) have also been on an uptrend, with ENPH stocks up around 10% this week. The company is a pioneer of solar microinverters. Solar microinverters help convert the direct current of solar panels into alternating current for home-usage. The company offers a one-stop solution, which includes the panels and storage in a single system. This standardization makes their installation packages attractive and efficient.
Enphase saw a 175% increase in share value year-to-date, closing at $80.80 yesterday. This is due to the company’s strong fundamentals. Despite the global economic downturn, investors were happy with the company’s performance. The company has shipped 2.1 million microinverters in Q4 2019 compared to 820,000 in Q4 2018. The surge in production has led to a jump in investors’ expectations, with a price-to-sales ratio of 12.7x. Despite the volatility, Enphase will rely on its fundamentals to weather through this market.
Enphase is certainly not resting on its laurels. It is expanding its product portfolio by partnering with SunPower, Panasonic, Solaria, and Q-Cells to develop leading AC modules. With so many good things happening for Enphase, this makes the company a potential solar stock to buy.Solar Energy Stocks To Buy [Or Sell] Right Now: Brookfield Renewable Partners
Another solar energy stock to look out for is Brookfield Renewable Partners (BEP Stock Report). BEP operates one of the largest publicly traded renewable power platforms in the world. The company’s investment objective is to deliver long-term annualized returns of 12% – 15%. Despite having a rocky year due to the COVID-19 pandemic, the stock has enjoyed a 38% price appreciation year-to-date.
This solar energy stock has shown consistent growth by continuing to deliver its long-term returns to equity holders year after year. BEP has invested over $580 million of equity, including an acquisition of a 1,200 MW solar development project in Brazil. The company’s liquidity remains at a robust $3.4 billion. Through its recent merger with TerraForm Power, BEP simplifies its corporate structure and strengthens its businesses in North America and Europe.
As one of the world’s largest investors in solar energy, BEP utilizes its fully integrated operating and in-house expertise to maintain facilities. It organically adds value and efficiently integrates new assets. With stable cash flows and long-term power contracts, this solar energy stock is an investor’s favorite. If you are looking for a defensive solar stock, BEP might just be what you are looking for.
Climate change is making renewable energy sources more important than ever before. That said, solar power is one of the most promising technologies in this regard. The market for solar energy is going to be huge in the long run. That’s because, despite years of growth, residential solar only represents about 3% of the electricity generated in the US. The solar energy space is akin to a technology company in its nascent stage, with tremendous room for growth.
Bear in mind that solar is not terribly difficult to install, not to mention modular. And that means that solar installations could enjoy strong growth in this coming decade. For this reason, it seems the sun will be shining on solar stocks for the years to come.