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Adrian Gray
Adrian Gray

Renewable Energy Stocks To Buy

Professor Parrish: Energy generated from natural resources that does not product pollution. Solar, wind, and geothermal are examples of green energy sources that are also renewable. There are a number of businesses and investment opportunities related to the renewable energy sector, from infrastructure to financing and workforce development.

renewable energy stocks to buy

We see successful investors bringing forward both operating experience in the energy, utilities, or infrastructure industries as well as a sound understanding of energy and commodity markets and policies.

Professor Parrish: Investing in secular growth trends that are tied to real societal needs provides a strong investment backdrop for long-term investors. However, in the past few years we have seen an influx of capital looking to invest in sustainability deals as there is growing awareness of the opportunity. Many of these investors are unsophisticated and can create market noise. For investors willing to invest in developing a deep knowledge of renewable technologies, markets and companies, I think it is an opportunity worth pursuing.

Professor Parrish: In addition to energy transition, we are optimistic about related opportunities in waste reduction, climate risk management in the supply chain, sustainable food and agriculture, and carbon capture.

One of the few industries that are headed for a certain path of growth all over the world is renewable energy, thanks to the climate change problem, rising costs of conventional energy and attractive subsidies and incentives the developed world is offering to the consumers of renewable energy products. However, the industry is not immune to the wider macroeconomic challenges that are slaughtering the financial markets.

For example, solar energy stocks have been wavering in 2023 amid rising interest rates and industry-wide headwinds. Storms and rains have also delayed the deployment of solar panels across the country. Another factor that affected the industry is the recent flurry of layoffs in the tech sector, as data suggests that tech workers are the biggest customers of renewable energy products.

Another challenge for the industry came recently when The California Public Utilities Commission passed a proposal that will cut the incentives on the use of rooftop solar panels. Analysts believe that this initiative by California, which is seen as a leader in renewable energy policies, could spill over to other states and affect companies like Tesla, SunPower and Sunnova, which provide solar energy solutions for domestic customers.

The Inflation Reduction Act is one of the biggest growth drivers for the renewable energy sector. Another important factor that adds to the growth of the renewable energy companies is the dramatic rise in utilities costs.

Canadian Solar Inc. (NASDAQ:CSIQ) sells solar PV modules. It ranks 12th in our list of the best renewable energy stocks to buy now. Canadian Solar Inc. (NASDAQ:CSIQ) recently announced preliminary Q4 results and also gave Q1 guidance. For the fourth quarter, Canadian Solar Inc. (NASDAQ:CSIQ) expects its revenue to come in at $1.97 billion, better than its guidance range of $1.8 billion to $1.9 billion. Analyst consensus estimate for this figure was $1.86 billion. For the first quarter of 2023, Canadian Solar Inc. (NASDAQ:CSIQ) expects its revenue to come in the range of $1.6 billion to $1.8 billion, which is below the analyst consensus estimate of $2.04 billion.

SunPower Corporation (NASDAQ:SPWR) makes photovoltaic solar energy generation systems and battery energy storage products, primarily for residential customers. In February, SunPower Corporation (NASDAQ:SPWR) posted strong Q4 results that crushed analyst estimates. Adjusted EPS in the quarter came in at $0.15, beating estimates by $0.01. Revenue in the quarter jumped about 43% YoY to reach $497.4 million, beating estimates by $16.4 million.

Clearway Energy, Inc. (NYSE:CWEN) has significant wind and solar energy operations across 26 states in the US. Clearway Energy, Inc. (NYSE:CWEN) has a PE ratio of 5.94 which makes it an attractive option for those looking for undervalued plays in the renewable energy space. In February, Clearway Energy, Inc. (NYSE:CWEN) declared a quarterly dividend of $0.3745 per share, which was a 2% increase from its previous dividend. Forward dividend yield at the time came in at 4.48%. The dividend is payable on March 15 to shareholders of record as of March 1.

Israel-based SolarEdge Technologies, Inc. (NASDAQ:SEDG) is having a good year so far, having gained about 15% through March 8. SolarEdge Technologies, Inc. (NASDAQ:SEDG) makes solar inverters widely used in the solar energy industry.

Renewables increased by 12% to generate 22% of the nation's electricity, while coal dropped 8% to make up 20% of the mix, according to estimates from research firm Rhodium Group. Utilities retired coal-fired generators, railroad disruptions hampered coal deliveries to power plants, and the price of coal for electricity generation rose 19%, all of which helped renewables and natural gas surpass coal.

And it's not just in the U.S. where clean energy is on the rise. The International Energy Agency forecasts renewables will become the largest source of global electricity generation by 2025. Wind and solar generation will more than double over the next five years to provide almost 20% of global power generation by 2027. The European Union will be one of the major drivers of this expansion, as it seeks to end its reliance on Russian fossil fuels by 2027.

"The ongoing land war in Europe has really been a boon for the renewable energy market, given that the energy crisis sparked by an over-reliance on Russian (liquefied natural gas) forced governments to get more creative and speed up their existing target dates for renewable projects," says Modulus CEO Richard Gardner.

Before the market downturn, renewable energy stocks had strong rallies, leaving many stocks vulnerable to the sell-off that came with higher interest rates and a compression in valuation multiples, says Kendall Dilley, portfolio manager at investment management company Vineyard Global Advisors.

"At this point, these stocks are increasingly becoming attractively priced," he says. "Coupled with the tail winds of government and private investment in the industry in the coming years, enticing opportunities are starting to present themselves."

One of Dilley's top renewable energy stock picks is Eaton Corp., a power management company that provides energy-efficient solutions for electrical, hydraulic and mechanical power. One of its business segments designs, manufactures, markets and supplies electrical and electronic components and systems that improve the power management and performance of both on-road and off-road vehicles.

Lithium is also critical to the batteries in utility-scale renewable energy projects, making the lightest metal on Earth indispensable to the global energy transition away from fossil fuels. It's also used in batteries for personal electronics.

"Lithium demand will only continue to grow as automobile manufacturers build out their electric vehicle lineups," he says. "There is also a tremendous opportunity as we build out our utility-scale energy storage networks."

"Demand for the metal should continue to rise alongside continued adoption of renewable energy, benefiting copper mining and producing companies like Southern Copper and Freeport-McMoRan," Dilley says.

NextEra Energy is the world's largest renewable energy company. Its regulated utility segment engages primarily in the generation, transmission, distribution and sale of electric energy in Florida. Another segment produces electricity from clean and renewable sources, including wind and solar.

"Hydrogen is a key piece of the renewable energy transition due to its use in decarbonizing industrial areas that account for significant amounts of current carbon emissions," Dilley says. "NextEra Energy has invested heavily in hydrogen applications, with expectations for the hydrogen market to grow toward $60 billion annually by 2050."

"Brookfield is a leading renewable energy developer with projects across the board from wind to solar, hydro to storage," Krull says. "The company continues to add to its portfolio with a development pipeline of over 120 gigawatts. This should keep the company growing for the foreseeable future."

All these processes are harmful to the environment because they emit greenhouse gasses that contribute significantly to air pollution and climate change. That's why a global energy transition seems to be taking place.

Renewable energy sources are certainly more beneficial than fossil fuel sources; however, it is not yet a perfect science. The hydroelectric sources used to produce renewable energy often negatively affect some environments, like fisheries and specific land use.

Green power is a term that is a part of renewable energy but takes it one step further. Green energy uses the same energy sources as renewable energy to produce power. However, for a resource to qualify as green power, it must be power generated in a surplus.

This means that for something to be green power, it must exceed renewable energy's mandates and requirements. Green power helps to reduce energy production's carbon footprint and maintains a zero-emissions profile.

Green energy has already become a more valuable investment, as it has grown from under $50 billion per year in 2004 to $300 billion per year in 2018. If there was a time to follow the money, this could very well be it.

For more information on how to make headwinds with clean energy, critical elements of the stock market and more, visit

According to Deloitte's "2023 renewable energy industry outlook (opens in new tab)," the IRA extends wind and solar tax credits for projects that started construction before 2025 and tech-neutral credits through at least 2032. 041b061a72


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