- Investors should know the same information about solar stocks as they know about any stock they are interested in.
- The industry outlook for 2017 and beyond is robust because of rapidly expanding capacity and price parity with fossil fuels.
- The Guggenheim Solar ETF tracks the top 25 stocks in the solar industry, so is a proxy for the sector.
- Energy and Oil Investor believes that First Solar Inc. (Nasdaq: FSLR), SunPower Corp. (Nasdaq: SPWR), and 8Point3 Energy Partners LP (Nasdaq: CAFD) are currently the best solar stocks to purchase.
Investors should know the same information about solar stocks as they know about any stock they are interested in. They need to know the earnings, the company’s plans, and the industry outlook.
The industry outlook for 2017 and beyond is robust. Solar energy is a rapidly growing field whose worldwide capacity rose by nearly half in 2016, according to SolarPower Europe. It is also expected to keep rising in capacity, from 300 gigawatts at year-end 2016 to a projected 700 gigawatts by 2020.
Importantly, it has also reached an inflection point where it has grid parity with fossil fuels like coal and natural gas. Grid parity means that its cost of generation is equal to or lower than these energy providers. In a word, solar energy is now competitive on costs.
Throughout part of 2015 and all of 2016, the price of solar stocks plunged downward, for two reasons. The first was a drop in fossil fuel prices like oil, which made those sources more attractive (at least temporarily).
The second was uncertainty about the government’s stance. Investment in solar is often facilitated by government subsidies for the purchase of panels and related equipment, but legislation on these subsidies has not always been clear. In 2016, Congress voted to extend consumer subsidies.
In addition, although the Trump administration in the U.S. is not expected to be favorable toward solar power, Dr. Kent Moors believes that solar will continue to grow because of its capacity, grid parity, and concerns about climate change across the world.
Where can I see a list of solar stocks?
A broadly based exchange-traded fund (ETF) can often serve as a proxy for a sector. The Guggenheim Solar ETF tracks the top 25 stocks in the solar industry. It trades on the New York Stock Exchange under the symbol TAN.
What are the best solar stocks?
Each specializes in a different segment of the industry. First Solar Inc. (Nasdaq: FSLR) manufactures a thin-film panel used in larger arrays of solar panels. Next year, it will introduce a Series 6 panel, with advanced technology 40% cheaper than current capacity.
SunPower Corp. (Nasdaq: SPWR) is a premier U.S.-based solar installer. It has the No. 1 market position in businesses and No. 2 market position in residential. It is also rolling out a P-series panel next year. It is projected to be cheaper than current models.
The other two partners recover capital via CAFD. CAFD runs the products and passes on profit to unitholders, just as MLPs do in the oil industry. CAFD’s current yield is a steady and robust 8.2%.
What are the top solar stocks to invest in?
One of the best ways to measure a top stock is to look at its expected stock price appreciation. For First Solar, FactSet estimates a 12-month price target range of between $34 and $40. It trades near the low end now, but the high end of the range is a robust 17%+ increase from current prices.
SunPower Corp. (Nasdaq: SPWR) currently trades at $6.91. FactSet projects a one-year average price target of $8.26, an almost 20% climb.
8Point3 Energy Partners LP (Nasdaq: CAFD) expected one-year price target is $16.81, close to a one-third gain. In addition, of course, CAFD investors will enjoy a steady income of more than 8% via the dividend yield.
What are the solar stocks for 2017?
It’s an excellent idea to buy solar stocks in 2017 to position a portfolio. Oil and Energy Investor expects truly significant gains in both FSLR and SPWR to be made in 2018, due to their expected new product rollouts.
What are the best solar energy stocks to buy?
The best solar energy stocks to buy? Oil and Energy Investor believes they are First Solar Inc. (Nasdaq: FSLR), SunPower Corp. (Nasdaq: SPWR), and 8Point3 Energy Partners LP (Nasdaq: CAFD). The reasons are their strong and expanded product offerings, expected share price appreciation, and, in the case of 8Point3, steady dividend yield.
Are solar energy stocks in India a good investment?
As solar capacity is growing throughout the world, it is planned to increase in capacity in India particularly. The electrical grid in India is inadequate, and the government plans to replace it with solar power. They are forecasting an advance to 100 gigawatts of solar by 2022, compared to the current capacity of 4 gigawatts.
In addition, much of India sees sun 300 days in a year, which makes it a strong candidate for solar power.
Dr. Kent Moors feels that the best way to invest in the sharp rise in solar worldwide is to avoid smaller, risky companies and buy ETFs that are invested globally. He advises two that are invested both in solar and other renewable energy sources, such as wind.
The first is iShares Global Clean Energy ETF (ICLN). Its holdings are in clean power, utilities, and suppliers worldwide.
A different approach is taken by the First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (NASDAQ: GRID). It invests in stocks engaged in power infrastructure: grids, networks, meters, storage, and software.
Energy investing is specialized and the field is evolving. To manage your portfolio optimally, click here to get access to our Special Reports.