Top renewable energy stocks to watch
Rebecca Cattlin July 7, 2021 9:32 AM
As the fight for a cleaner future continues, renewable energy stocks are becoming the main battleground. New regulations, technological developments and ESG investors are all causing fluctuations in the price of renewable energy company shares. Find out what the top stocks to watch are.
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- Renewable energy stocks overview
- Top renewable energy stocks by trade volume
- US renewable energy stocks overview
- Canadian renewable energy stocks overview
- UK renewable energy stocks overview
Renewable energy stocks overview
Renewable energy stocks are the shares of companies involved in the shift toward sources of energy – be it fuel, electricity or water – that are more environmentally friendly. Many renewable energy stocks are receiving positive investment flows due to the optimism surrounding their expected growth as the world shifts toward a more sustainable future.
The best renewable energy stock for you to invest in or trade will depend on your chosen criteria. Typically, you’d either go for large cap stocks that have more stable operations, or small cap stocks that are singled out for having growth potential.
It’s important to note that the shares of renewable energy stocks can fall, as well as rise in price. For buy and hold investors, these fluctuations don’t present any opportunities. But for traders, these market movements create a whole new avenue to take advantage of.
Top renewable energy stocks
These are the top renewable energy producer stocks as determined by volume of trade from City Index client.1
- Enphase Energy Inc
- Solaredge Techologies Inc
- JinkoSolar Holding Co Ltd
- SunPower Corporation
- First Solar
- Sunrun Inc
- Canadian Solar Inc
- Xinyi Solar Holdings
- Vestas Wind Systems AS
- EDP Renovaveis
1. Enphase Energy Inc
Enphase Energy is one of the most popular energy stocks on the market, judging by its dramatic price rise from $26 in March 2020 to $185 in June 2021. Enphase is a solar home-energy solutions company, which creates microinverters.
During Covid-19, there was initially a fall in demand for solar systems, as the push toward upgrading homes to solar fell lower down consumers’ priority list. But things have started to pick up again. Enphase reported $306.8 million in Q1 2021, up 14% from the previous quarter and up from $205.5 million in Q1 2020.
2. SolarEdge Technologies Inc
SolarEdge Technologies is the company that developed the inverter that literally changed the way the solar industry harvests and converts electricity.
SolarEdge had a strong first quarter in 2021, rebounding from the dip many solar stocks experienced in mid-2020 due to the coronavirus crisis. The higher prices for steel and aluminium impacted the company’s profit margins throughout 2020, which caused a lot of movement in SolarEdge’s share price. Shares of SolarEdge started 2021 at an all-time high of over $356 but have since fallen.
In Q1 2021, SolarEdge reported revenues of $405.5 million – which despite being up 13% from $358.1 million in the prior quarter, were down 6% from $431.2 million in the same quarter last year.
3. JinkoSolar Holding Co Ltd
JinkoSolar has had a rough start to 2021, with its Q1 earnings showing a 15.7% decline in revenue to $1.21 billion and a net loss of $33.7 million per share.
Shares of JKS had fallen by 12.56% from the start of the year to July 1 2021. However, the report also indicated that based on the stabilisation of polysilicon prices – a key material in JinkoSolar’s production line – which should help demand and the company’s profitability going forward.
JinkoSolar also received attention in June 2021 after it announced it had applied for shares of its subsidiary Jiangxi Jinko to be listed on China’s STAR market. Proceeds of the IPO would be used to add additional production lines and build an R&D centre. The news caused JinkoSolar’s share price to rise, as expectations that it would bring in a new source of funding for the company.
4. SunPower Corporation
SunPower Corp is a solar energy company that designs and manufactures PV cells and solar panels. Since the sell-off in March 2020, shares of SPWR have risen by more than 484% – from $3 to $29 – thanks to the optimism around the future of the solar power industry and Joe Biden’s administration. This increase is significantly more than other stock benchmarks, such as the S&P 500, which only rose by 80% in the same period.
While SunPower has seen an increase in commercial and industrial installations up 30% year on year, its revenue was down from Q4 2020 – from $332 million to $304 million. The company reported $0.05 earnings per share (EPS) for the quarter, beating the analysts' consensus estimates of $0.02.
5. First Solar
First Solar manufactures solar panels, provides utility-scale PV power plants and offers services, such as financing, construction, maintenance and end-of-life panel recycling, to customers.
Like other companies in the industry, First Solar experienced reduced sales due to the pandemic. But over a year on from the March 2020 bottom, First Solar stock has risen from $33 to $90 thanks to rising demand – an increase of over 84%. This is more than the S&P benchmark, which increased by around 80% from its lows.
First Solar announced its Q1 2021 net sales were $803 million, up 51% year on year and its production capacity had increased. Its revenue jumped from $532 million in Q4 2020 to $803 million, but rising costs and operating expenses saw operating margins fall to 8.3% from 14.3%. This caused EPS to fall to $0.71 from $1.01.
6. Sunrun Inc
Shares of Sunrun Inc were up over 183% on July 1 2021 from the previous year. Over June 2021 alone, shares of the solar energy products distributor gained 29.25%, outpacing the Oils-Energy sector (3.34%) and the S&P 500 (2.16%). However, the stock has had a more muted YTD – falling 18% from the start of the year.
It’s predicted that RUN will report earnings of -$0.02 per share, which would represent year-over-year growth of 81.82%. While estimates for earnings are up 106.5% from the prior-year quarter, to $374.36 million.
7. Canadian Solar Inc
Canadian Solar is one of the largest solar technology and renewable energy companies in the world. It manufactures solar photovoltaic modules, builds battery storage and develops utility-scale storage solutions. It operates across 20 countries and is the largest operator in Japan.
Canadian Solar is headquartered in Ontario, Canada, but its manufacturing is largely based in China. This has led the company to start preparations for a Chinese IPO for its manufacturing division. The company expects the fundraising will help increase its module shipment capacity, expand its market share and keep manufacturing costs down.
8. Xinyi Solar Holdings
Xinyi Solar Holdings Limited is an investment holding company involved in the manufacture and sale of solar glass. Along with subsidiaries, the Company operates its business through three segments: sales of solar glass products, the operation of utility-scale ground mounted solar farms and the provision of Engineering Procurement and Construction (EPC) services to solar farms.
Xinyi Solar Holdings Limited (HKG:968) share price has risen by 597% in the last three years, a welcome return for long term shareholders - 18% of this was in June alone. However, as was noted in the company’s H1 2021 earnings, it’s likely volatility could play out in the short-term as solar glass product prices trend downward due to an unfavourable supply-demand balance.
9. Vestas Wind Systems AS
Vestas Wind Systems is a Danish manufacturer, seller, installer and services or wind turbines. The wind energy market is expected to hit $123 billion in 2025 and Vestas is expected to be a big benefactor of investment due to its existing operations. It currently has turbines across 84 countries and expects this number to increase.
At the beginning of May 2021, Vestas released Q1 financial figures of €1.96 billion in revenue, which was a decline of 12% YOY. The decrease from last year can be attributed to lower activity levels and supply chain constraints caused by the coronavirus pandemic. Like solar stocks, this caused Vestas shares to experience volatility throughout 2020. As of July 1 2021, Vestas stock was up over 78% from the previous year.
10. EDP Renewables (EDP Renovaveis)
EDP Renewables, or EDP Renovaveis in Spanish, is a Madrid-based company that designs, develops, manages and operates renewable energy power plants. It operates in 17 global markets, including most of Europe, the US, Canada, Vietnam and Brazil.
EDP Renewables total revenues decreased in Q1 2021 to €448 million, approximately -8% YoY. This was caused by lower production capacity by -€14 million YoY, lower selling prices, forex translation and other costs, which were not offset by higher wind resource (+€9m YoY).
US renewable energy stocks overview
Optimism surrounded the US renewable energy sector early in 2021 after the Joe Biden administration took over. Throughout his presidency campaign, Biden promised to prioritise renewable energy. This included re-joining the Paris Climate Accord, investing $2 trillion in clean energy, and fully decarbonising the power sector by 2035 in order to achieve a larger goal of net-zero carbon emissions by 2050.
However, Biden’s presidency thus far has also coincided with the S&P Oil & Gas Exploration & Production Index rising by about 35%. His executive orders to stop new fossil fuel leases is only effective on federal land, and most fossil fuel drilling occurs on private property. Despite making promises to the anti-fossil fuel movement, he also stated he wouldn’t prevent private fracking.
While the stocks we’ve looked at are renewable energy producers, it’s worth pointing out that it is fossil fuel companies that will likely be the largest winners in the renewable space. They’re best poised to transition to other fuel types as they already have the infrastructures in place and consumer bases.
Examples of US renewable stocks include Enphase Energy Inc and Solaredge Techologies Inc.
Canadian renewable energy stocks overview
Renewable energy makes up about 16.3% of Canada’s total energy supply, most of which comes from hydro power, biomass and growing wind power capacity. In fact, Canada ranks third in the world in terms of hydroelectric power generation.
The Toronto Exchange has 81 companies listed that are in the cleantech sector, with a combined market capitalisation of over $50.5 billion. Of these, 70 are headquartered in Canada.
The industry experienced growth over the five years to 2020, but profit took a hit during the coronavirus pandemic. However, forecasts predict that the industry will start growing again, due to population increases, greater demand for renewables and rising electricity prices.
The company has a fairly conservative strategy, which means its been able to see success where competitors haven’t in maintaining value in its supply chain. Canadian Solar beat Q1 2021 estimates, with revenues of $1.1 billion and gross margin up 18%. Shares of CSIQ were up 131.8% over the last year.
Examples of Canadian energy stocks include Canadian Solar and Brookfield Renewable Energy Partners.
UK renewable energy stocks overview
In the UK, the renewable energy market is projected to grow at approximately 9% a year from 2021 to 2026. This rate allows plenty of space for traders and investors to find opportunities.
Popular UK energy stocks include Greencoat UK and the Renewables Infrastructure Group Limited (TRIG).
How to trade renewable energy stocks
It’s always important to remember that the price of shares can fall as well as rise. When you trade shares with us, you’ll be able to go both long and short, taking advantage of companies that are entering periods of growth and those experiencing decline.
You can trade stocks with City Index with spreads from 0.1%. Follow these easy steps to start trading:
- Open a City Index account, or log in if you’re already a customer
- Search for the company you want to trade in our award-winning platform
- Choose your position and size, and your stop and limit levels
- Place the trade
1Client trade data taken on 24 June 2021
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