By 2050, clean energy investments will total $10 trillion.
And one of our top renewable energy stocks to watch has gained 64% over the last six months. But, that’s just the beginning.
This industry still has much further to grow. It’s a bull market in the making.
That’s why I want to share our five best renewable energy stocks with you, again, before they really take off.
You see, most forecasts for renewable energy have just been too modest. Many estimates fail to take three crucial developments into account.
First, wind and solar power costs have finally dropped below the cost of coal-fired power plants across much of the United States.
Second, technology is advancing so rapidly in related areas, like batteries, to increase energy storage. This will increase the power and sustainability of renewable energy.
The combination of these three factors suggests a bullish outlook for renewables.
And it’s playing out right in front of us. Over time, we’ve written about how these five clean energy stocks will benefit from a global transition to renewables.
And they’ve only just begun to do that.
We’re about to name – not one, not two – but five renewable energy stocks poised to benefit from the rapid growth in clean energy.
But first, here’s why the renewable energy sector is ready for a boom.
Why to Invest in Renewable Energy
A recent presentation by NextEra Energy Inc. (NYSE: NEE), a clean energy stock we’ve talked up before, suggests that U.S. electricity consumption could be 50% renewable in just 11 years.
And NextEra is going to be providing a good portion of that.
You see, NextEra is a renewables stalwart in its own right. With nearly a century of history, and over 5 million customers, NEE knows electricity.
It’s the world’s largest generator of renewable energy from wind and sun. According to S&P Global Ratings, NEE gets a best-in-class ranking in its Environmental, Social, and Governance (ESG) Evaluation.
So, it stands to be a major winner in the budding clean energy market.
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It’s just a matter of waiting until the projections for the clean energy industry take form. And the outlook is still promising.
This year’s recent Bloomberg New Energy Outlook (NEO) said it expects solar, wind, and battery investments to attract a stunning $10 trillion into 2050.
2019’s NEO compares levelized costs of competing energy technologies. It found that for roughly two-thirds of the world, either wind or solar has become the cheapest option for additional power-generating capacity.
Their analysis also points to coal’s supply of global energy falling to 12% by 2050. It’s currently at 37%.
NEO 2019’s lead analyst, Matthias Kimmel, said the cost of clean energy materials – solar photovoltaic modules, wind turbines, and lithium-ion batteries – are expected to decrease by 28%, 14%, and 18%, respectively, for every time their global installations double.
And he says that will “undercut electricity generated by existing coal and gas plants almost everywhere.”
That means lowering production costs for solar power, which could exponentially grow demand for manufacturers.
Lightning advances in smart solar power systems will help efficiencies, which will bring costs further down and push demand much higher.
So, it’s time to watch these clean energy stocks, especially when all of them are leaders in this key industry…
4 More Renewable Energy Stocks to Watch
Money Morning recommended several solar and renewable energy plays since the start of the year.
I highlighted NextEra Energy back in April myself, and the stock is already up 10% since then.
We also told you about Vivint Solar Inc. (NYSE: VSLR) in January. Vivint owns and installs solar systems for residential, commercial, and industrial customers across the United States. The stock has nearly doubled since we wrote about it, going from just over $4 per share to $8 currently.
But that doesn’t mean you missed out just yet. One hundred percent of analysts covering Vivint still recommend it as a buy.
That means there’s a good chance this stock will get a bump very soon. So, it’s still a great buy. With a price/earnings (P/E) ratio of just 15 and a forward P/E of only 8.2, this stock is set to ride the solar wave ahead.
JKS is a China-based solar production company, making solar wafers and photovoltaic (PV) cells. It’s now the world’s third-largest PV cell maker.
Another solar company to consider is Sunrun Inc. (NASDAQ: RUN). Sunrun offers the Sunrun Brightbox, a solar storage battery that helps consumers maximize power savings through the company’s proprietary software. Of course, Brightbox steps in when the aging grid succumbs to power outages as well, keeping homes powered even as their neighbors are in the dark.
For those who don’t want or can’t afford to pay up front for their solar power system, Sunrun has a leasing program that lasts around 20 years. This may attract a lot of new business as users won’t have to pay the total cost up front.
SolarEdge Technologies Inc. (NASDAQ: SEDG), on the other hand, boasts a solid balance sheet. The stock has run up since the start of the year, pushing its P/E ratio to nearly 27. But its forward P/E remains a more palatable 17.
SEDG makes and sells solar equipment that improves panel efficiency, advanced inverters, storage batteries and smart monitoring platforms. Its systems have been installed in over 130 countries on five continents.
The company enjoys a return on equity of 19.4% and profit margins of 11.2%, while debt is very manageable at $59 million.
I recommended SEDG back in April, and the stock is up about 64% since then.
As this sector continues to heat up, look for SolarEdge to keep trending higher along with it, thanks to its leading solar technologies.
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