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. All statistics in the tables below are as of December 2.
Here are the top 3 solar stocks with the best value, the fastest growth, and the most momentum.
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.
|Best Value Solar Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Canadian Solar Inc. ( CSIQ )||41.98||2.5||12.2|
|JinkoSolar Holding Co. Ltd. ( JKS )||64.60||2.9||22.1|
|Hannon Armstrong Sustainable Infrastructure Capital Inc. ( HASI )||54.22||4.1||37.4|
- 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.
- 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.
- Hannon Armstrong Sustainable Infrastructure Capital Inc.: Hannon Armstrong provides debt and equity financing to the energy efficiency and renewable energy markets.
Fastest Growing Solar Stocks
These are the solar stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Solar Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|First Solar Inc. ( FSLR )||91.06||9.7||400.0|
|JinkoSolar Holding Co. Ltd. (JKS )||64.60||2.9||393.1|
|Daqo New Energy Corp. ( DQ )||40.32||2.8||285.7|
- First Solar Inc.: First Solar designs and manufactures solar power systems and solar modules. The company utilizes a thin film semiconductor technology to manufacture electricity-producing solar modules. First Solar reported net income growth of 406.3% on net sales growth of 69.6% in Q3 2020, which ended September 30, 2020. Net income was boosted by lower operating expenses than the year-ago quarter. The company said that its financial results have not been materially impacted by the pandemic.
- JinkoSolar Holding Co. Ltd.: See above for company description.
- Daqo New Energy Corp.: Daqo New Energy is a China-based solar energy company that manufactures polysilicon for distribution to manufacturers of solar technology products.
Solar Stocks with the Most Momentum
These are the solar stocks that had the highest total return over the last 12 months.
|Solar Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
Enphase Energy Inc. (ENPH)
|ReneSola Ltd. ( SOL )||7.89||0.4||443.1|
|Daqo New Energy Corp. (DQ)||40.32||2.8||429.4|
|Invesco Solar ETF (TAN)||N/A||N/A||199.9|
- 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.
- 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.
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YCharts. "Financial Data." Accessed Dec. 2, 2020.
Canadian Solar Inc. "CANADIAN SOLAR REPORTS THIRD QUARTER 2020 RESULTS." Accessed Dec. 2, 2020.
JinkoSolar Holding Co. Ltd. "JinkoSolar Announces New Chief Operating Officer." Accessed Dec. 2, 2020.
First Solar Inc. "First Solar, Inc. Announces Third Quarter 2020 Financial Results." Accessed Dec. 2, 2020.
Enphase Energy Inc. "Enphase Energy Reports Financial Results for the Third Quarter of 2020." Accessed Dec. 2, 2020.