Even though most of the world’s energy is still generated by fossil fuels, solar energy has continued to grow over the past several years. The companies supplying the surge in demand range from manufacturing components and panels, installing solar panels and infrastructure, and operating solar energy generating facilities. As the solar energy market expands, so will the investment opportunities in the companies leading the charge.
Although some large energy and utility companies have renewable energy divisions, they aren’t listed in the solar energy industry listings because the parent company’s primary sector isn’t renewable energy.
Investors looking to diversify their portfolio in a more eco-friendly way will benefit financially as well. After lagging behind the market for several years, solar energy stocks are making a comeback. Over the past year, solar energy stocks have outperformed the broader market. The Invesco Solar ETF (TAN) has returned investors 112 percent over the past year, while the S&P 500 gained just over 31 percent.
This trend will likely continue as more energy-conscious homeowners look to clean up their home’s energy sources. According to the Solar Energy Industries Association, solar panel installations were up 23 percent in 2019 from the previous year. While the COVID-19 pandemic slowed the growth in 2020, the installations in 2021 are projected to reach 20.4 GW, which is almost double the amount in 2019.
With a bullish outlook on solar panel energy, here are the best solar energy stocks for investors in 2021.
Canadian Solar Inc. (CSIQ)
The Ontario-based solar power company, Canadian Solar Inc, designs, manufactures, and sells solar module products. Serving customers in over 150 countries, Canadian Solar is a world leader in delivering utility-scale solar capabilities.
CSIQ has a current price of $39.90 and a market cap of about $2.4 billion. Although down YTD, shares of Canadian Solar have earned investors over 100 percent in the past year. With a peak 2021 price of $64.15 on January 21, it has lost 22 percent this year. If the 2021 outlook for the sector as a whole comes true, investors who climb aboard now might be rewarded handsomely.
First Solar Inc. (FSLR)
Like Canadian Solar, First Solar Inc. designs, manufactures, and sells solar power systems and solar modules. First Solar’s product features a thin film semiconductor technology to manufacture its solar modules. Also, First Solar provides operational and maintenance services to its customers.
FLSR is currently trading at $80.40—up 51 percent over the past year. However, shares of First Solar are down nearly 19 percent YTD after a peak price of $107.72. FLSR has a market cap of $8.5 billion. So, it will likely play well with investors in 2021 to buy shares at a discount.
SunPower Corp. (SPWR)
One of the oldest companies in the solar energy sector, SunPower Corp., was founded in California in 1985. SunPower manufacturers solar cells and modules. Despite the COVID-19 pandemic created slow-down, SunPower actually posted a profit in 2020. This profitability has continued into 2021, with the company announcing first-quarter sales 16 percent higher YoY.