Best solar stocks to buy in 2022
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Solar energy is the fastest growing source of power in the world. On this page we pick out the best five companies to invest in to get exposure to this rapidly expanding industry, and explain more about what makes solar stocks so appealing.
What are the top solar stocks to buy?
The table below ranks the best five solar stocks to invest in right now. These companies have been chosen by our team of experts, and you can find their most up to date price information by following the links, or sign up to a broker in order to invest straight away. Otherwise, you can scroll down to learn more about why each company has been picked.
|#||Stock symbol||Company name||Trade now|
|2||NOVA||Sunnova Energy International|
1. SunPower Corporation (NASDAQ: SPWR)
SunPower is an American company that provides solar panels and energy storage for residential and commercial buildings. It’s one of the oldest solar companies around, having been formed all the way back in 1985, and also one of the largest, featuring in the top in the world by revenue.
As will become a theme with companies in this list, SunPower’s stock price has been quite volatile over the course of its history. Renewable stocks have often been priced on hype as much as their results, and so they can fluctuate dramatically on small fragments of news. SunPower went above $50 per share in 2020, its highest for more than a decade, after trading below $5 earlier in the year.
Part of the reason for that shift, and its subsequent fall in value, is that SunPower has undergone a transition to focus on a specific area of the market: residential and commercial, to the extent that it spun off its manufacturing arm. Although it prompted some short term hiccups, the company is now well-set to take advantage as more people introduce solar energy to their homes.
2. Sunnover Energy International (NYSE: NOVA)
Sunnover is another American company that focuses on residential solar panels. It’s much younger than SunPower, having only been formed in 2012, and it makes most of its money through leasing out the panels rather than selling them.
That approach helped Sunnover fly out of the blocks as a public company, and its share price doubled in the first year of trading (2019-2020). It then doubled again over the next year. So the broader trend has been excellent, even accounting for some trials and tribulations along the way.
Sunnover’s real attraction lies in the fact that it can attract new customers cheaply, lease out solar systems, and then develop that relationship to sell products to them in the future. That can cost more in the short run but lead to big wins in the future when customers’ loyalty to the brand pays off.
3. Sunrun (NASDAQ: RUN)
Sunrun is yet another provider of residential solar panels. Formed in 2007 and public since 2015, it was already the largest rooftop solar provider in the US before merging with its closest competitor, Vivant Energy, in 2020.
Joining forces with Vivant gave Sunrun access to more of the biggest markets for Solar in the US and helped inspire a huge stock market surge in 2021. The price was up more than 300% at one stage, and soared well past its previous all time highs. Installations were up more than 30% on the year as well as demand for solar energy continued to rise.
Both Sunrun and Vivant had already overtaken Tesla – a perhaps surprising player in the solar energy game – before they merged. Now, Sunrun’s leasing model means solar panels are more affordable to more of the public, and there’s a huge market available; just a small fraction of homes have panels right now. Which means lots of potential customers for Sunrun to target.
4. Enphase Energy (NASDAQ: ENPH)
Enphase is based in California and produces solar software and storage for residential buildings around the world. Most notably, it produces solar microinverters, which convert raw solar energy into the sort that can actually be used to power a home.
That has made Enphase one of the most popular solar energy companies on the stock market. Its stock has been on a tear over the last few years as investors flocked to get in during the early stages of its expansion. At its peak in 2021, around $180, the share price was up over 3,000% compared to 2019.
That shows what investors think of the company. There is still a way to go for the bottom line to catch up with the hype but batteries, software, and solar energy storage in general are all going to play crucial roles in the energy revolution. Enphase offers all three, which puts it in a great place to capitalise on the rapid growth of the industry as a whole.
5. Canadian Solar (NASDAQ: CSIQ)
Canadian Solar is different from the other stocks on this list because it is involved in much larger scale solar energy projects. It manufactures the panels and infrastructure to support solar energy and helps develop large scale installations, such as power plants and solar farms.
The company has been around since 2001 and has gone through many waves of popularity over the years. In the aftermath of the 2020 US Presidential Election, which prompted widespread investment in solar energy stocks, it hit its all time high price above $60 a share.
That price is based on the fact that Canadian Solar is one of the largest solar manufacturers around. It supplies panels to more than 150 countries around the world and is such a large developer that it has a major advantage over its competition. As demand for solar grows over the next few years, it’s likely that Canadian Solar will be building the panels to meet it.
Where to buy the best solar shares
To invest in any solar stock you need to sign up with an online broker first. Use the links in the table below to head straight to one of the best brokers available and you can sign up in just a few minutes. Then you’re ready to get your first share.
What is a solar stock?
It’s any company that’s involved in providing solar energy. That can be companies that are involved in research and development, manufacturing the solar panels, or selling them to consumers.
Are solar shares a good investment?
In the long run the solar industry as a whole is likely to be, although there is an element of risk involved in picking which stocks are going to succeed. The industry is still quite volatile because it’s so young and there’s likely to be some consolidation as the solar market grows.
It’s almost undeniable that it is going to grow, however, so investing in solar or some other forms of renewable energy is a way of future-proofing your portfolio. You can use the ebbs and flows of the market to your advantage in order to buy your favourite stocks at a relatively low price.
If you’re ready to dive in and invest in solar stocks now, pick a broker from the list above to get started. Otherwise, take some more time to research individual companies in order to pick your favourite. Our solar news and analysis section is a good place to start.
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