4 Solar Stocks to Shine on Green Energy Initiatives

Despite being ravaged by the coronavirus pandemic, solar stocks boomed in 2020. Solar stocks had made triple-digit gains with a constant shift to clean energy as the outbreak devastated the global oil industry. Looking ahead, solar energy capacity additions are a prime focus of the federal government and are poised to accelerate over the coming years.

Solar stocks have rallied since the election of President Joe Biden, his green energy initiatives being a big part of the election campaign. Let’s discuss the factors that will drive renewable energy growth, especially solar, in 2021 —

Environmental Infrastructure Boom

Biden’s clean energy agenda will help the clean energy space boom in the coming year. Immediately after the inaugural festivities, he signed a series of day-one executive orders that include a commitment that the United States would rejoin the Paris climate agreement.

Extension of solar tax credits by two years, which gives a 26% tax credit for both solar and solar plus storage installations, have helped reduce the cost of solar projects.This in turn pushed shares of solar equipment makers like Enphase Energy to record or multi-year highs.

Biden also canceled the permit for the construction of the Keystone XL pipeline from Canada and called for “immediate review” of the Trump administration’s actions that have ignored environmental protections. Additionally, his clean energy plan calls for making the U.S. power sector carbon-neutral by 2035.

The clean energy plan plays a critical role in boosting solar stocks considering that 63% of the electricity generated in America came from fossil fuels in 2019, according to

the U.S. Energy Information Administration

.These rafts of executive orders to combat climate change include spending of a $400 billion on federal procurement of renewables, batteries and electric vehicles, reorienting government’s energy purchases, ending fossil fuel leasing and easing renewable energy development on federally-owned lands.

Both residential and commercial solar will eventually grow as consumers and businesseswitness that on-site energy production offers value that they can’t decline. Additionally, tax credits and a low-rate environment will help in financing those projects. What’s more? According to a

BloombergNEF report

, lithium-ion battery pack prices have fallen 89% in real terms to $137 per kilowatt-hour in 2020, which were above $1100/kWh in 2010. And by 2023, the average prices will be close to $100/kW. This dramatic decline in costs has also boosted the space, putting solar on track for the lowest-cost source of bulk power in the coming years.

IPO Boosting Space

On Jan 27, Shoals Technologies Group plans to raise $1.6 billion in an initial public offering and will trade on the Nasdaq under the ticker SHLS. This solar equipment supplier plans to offer more than 70 million shares at a price of $25. Per the filing report, as of Sep 30, Shoals has reported revenues of $136.7 million, up 28% from the same period a year ago and net income of $29.5 million compared with$17.3 million a year ago.

4 Stocks to Buy

The prospects for solar stocks are high at present, hence we have shortlisted four stocks that are poised to grow.


SolarEdge Technologies, Inc.


SEDG

designs, develops and sells direct optimized inverter systems for solar photovoltaic installations. The company that belongs to the Zacks

Solar

industry has an expected earnings growth rate of 14.8% for the current year.

The Zacks Consensus Estimate for the company’s current-year earnings has been revised 4.8% upward over the past 60 days. SolarEdge holds a Zacks Rank #1 (Strong Buy). You can see


the complete list of today’s Zacks #1 Rank stocks here



.


Array Technologies, Inc.


ARRY

provides solar tracking solutions and services for utility-scale projects. The company that belongs to the Zacks Solar industry has an expected earnings growth rate of 5.8% for the current year. The Zacks Consensus Estimate for its current-year earnings has been revised 4.6% upward over the past 60 days. Array Technologies holds a Zacks Rank #2 (Buy).


Canadian Solar Inc.


CSIQ

provides solar tracking solutions and services for utility-scale projects. The Zacks Rank #2 company that belongs to the Zacks Solar industry has an expected earnings growth rate of 36.4% for the current year. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 4.7% upward over the past 60 days.


ReneSola Ltd


SOL

develops, builds, operates and sells solar power projects. The company that belongs to the Zacks Solar industry has an expected earnings growth rate of more than 100% in the current year. The Zacks Consensus Estimate for its current-year earnings has been revised more than 100% upward over the past 60 days. ReneSola holds a Zacks Rank #2.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?

Last year’s 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.



Access Zacks Top 10 Stocks for 2021 today >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.

Click to get this free report


To read this article on Zacks.com click here.


Zacks Investment Research