Promising solar stocks in 2021
Renewables look set to have a big year for a number of reasons. In the United States, perhaps the most salient reason is the incoming Biden administration and its well-known attitudes towards renewable energy and the green economic transition. An extended tax subsidy, for instance, has provided both solar and wind companies with a significant boost for at least the next couple of years.
Solar stocks, and renewables in general, look set to have a good 2021. Below are some of the most promising solar stocks this year.
Canadian Solar Inc.
This Canadian-based company is a designer, manufacturer and seller of solar modules. While it posted an 83.9 percent drop in net income during 2020 because of rising costs and expenses, it also showed a net revenue growth of 20.3 percent in Q3 of last year. The company has indicated that the pandemic has posed some challenges to its operations, but the solid revenue growth last year has made Canadian Solar Inc. a much talked about value stock for solar investors.
First Solar Inc.
First Solar is another manufacturer of solar modules as well as solar power systems. Their proprietary technology makes use of a thin-film semiconductor that makes high-efficiency modules. The company reported net income growth for Q32020 of 403.6 percent on the back of net sales growth of nearly 70 percent. They managed this by lowering their operating expenses significantly from Q3 2019 and have indicated that the pandemic has not had a significant impact on their operations.
ReneSola Ltd.
ReneSola is based out of China and it is a well-known builder and manager of solar energy assets around the world. They are involved in the development, financing, construction and management of solar projects, lending their considerable expertise to a multitude of medium and large-scale solar endeavours. China is a leader in global solar, and particularly the manufacturing of cells, making companies like ReneSola ones to watch out for over 2021 and the coming years.
SunPower
SunPower looks poised to take advantage of all the major factors that will influence renewable growth over the next 12 months. These include the solar investment tax credit from the Biden administration, which provides companies with a 26 percent tax credit for storage and solar+ storage facilities. Additionally, the low interest rates and cost savings of on-site solar will continue to drive both commercial and residential adoption of this renewable. Both of these, combined with the company’s improved ability to use equity to raise funds for expansion and growth, put SunPower in a great position to turn an impressive profit for its investors this year.
Enphase Energy Inc.
Enphase Energy is another company set to take advantage of the rising tide in renewables right now. Enphase provides both cells and monitoring technology for distributors, original equipment manufacturers, large-scale installers, urban planners and homeowners. Despite a 0.9 percent drop in revenue, the company posted net income growth of 26.6 percent and many analysts are predicting that the current bull signal could see Enphase stock climb to new heights in the next several weeks.
Conclusion
The bottom line is that the world simply must move away from fossil fuels to renewable energy sources. Massive investments are being made in advanced countries to transition their economies and infrastructure towards renewables like solar and are incentivizing both businesses and citizens to join the switch. For the makers and manufacturers of solar equipment and those integral to the solar supply chain, tax cuts to make business easier and more profitable will also continue to drive market interest and expectations. The above five solar companies are ones that look well-positioned to take advantage of all of that.
