Solar

The solar energy industry has grown rapidly even as fossil fuels remain the dominant source of global energy use. Solar industry companies come from multiple sectors, including utilities, industrial, and energy, and include popular stocks such as SolarEdge Technologies (SEDG) and SunRun Inc. (RUN). While some large utilities and energy companies have solar and renewable energy divisions, these businesses typically are not included in the industry’s listings because the parent’s primary focus is not solar.

Solar stocks, represented by the Invesco Solar ETF (TAN), have dramatically outperformed the broader market over the past year. TAN has provided a total return of 199.9% over the last 12 months, well above the Russell 1000’s total return of 20.7%, as of December 1, 2020.1 All statistics in the tables below are as of December 2.

Best Value Solar Stocks

These are the solar stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.

• • Canadian Solar Inc.: Canadian Solar is based in Canada and designs, manufactures, and sells solar module products that convert sunlight into electricity. The company posted an 83.9% decline in net income despite net revenue growth of 20.3% in Q3 2020, which ended September 30, 2020. Costs and expenses rose faster than revenue, helping to drive the decline in net income. Canadian Solar said that the COVID-19 pandemic was creating some uncertainties to its business operations.2
  • JinkoSolar Holding Co. Ltd.: China-based JinkoSolar manufactures solar products including silicon wafers, solar cells, and solar modules. The company also offers solar system integration services. JinkoSolar announced in late November the appointment of Dr. Jiun-Hua Allen Guo to the role of Chief Operating Officer (COO), replacing Zhiqun Xu, who is resigning.3
  • Hannon Armstrong Sustainable Infrastructure Capital Inc.: Hannon Armstrong provides debt and equity financing to the energy efficiency and renewable energy markets.

Solar Stocks with the Most Momentum

These are the solar stocks that had the highest total return over the last 12 months.

• Enphase Energy Inc.: Enphase Energy provides solar energy cells and monitoring equipment for distributors, large installers, original equipment manufacturers, strategic partners, and homeowners. The company posted net income growth of 26.6% despite a 0.9% decline in revenue. Net income was boosted by significantly lower cost of revenue compared to the year-ago quarter.5
• ReneSola Ltd.: ReneSola is a China-based renewable energy company that builds and manages energy projects. The company primarily focuses on the development, construction management, and financing of solar power projects.
• Daqo New Energy Corp.: See above for company description.