Top Solar Stocks for Q4 2022

DQ is top for value and growth and ENPH is top for momentum

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 an exchange-traded fund (ETF)—the Invesco Solar ETF (TAN)—have slightly outperformed the broader market over the past year. TAN has provided a total return of -1.7% over the last 12 months, ahead of the Russell 1000’s total return of -7.1%. These market performance numbers and all statistics in the tables below are as of Aug 6, 2022.

Inflation Reduction Act

The Inflation Reduction Act (IRA) of 2022, was signed by President Biden on Aug. 16, 2022. The legislation calls for a more-than-$300-billion investment in energy and climate reform. This would be the largest federal investment in clean energy in U.S. history. The bill provides for investment in renewable energy infrastructure, including additional wind turbines and the manufacture of solar panels. Individuals would receive tax credits on the purchase of electric vehicles and steps taken to make homes more energy efficient.

Here are the top three solar stocks with the best value, the fastest growth, and the most momentum.

Best Value Solar Stocks

These are the industrial 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 that you’re paying less for each dollar of profit generated.

Best Value Solar Stocks
  Price ($) Market Capitalization (Market Cap) ($B) 12-Month Trailing P/E Ratio
Daqo New Energy Corp. (DQ) 64.53 4.8 0.8
Hannon Armstrong Sustainable Infrastructure Capital Inc. (HASI) 40.00 3.5 29.0
Canadian Solar Inc. (CSIQ) 38.68 2.5 31.4

Source: YCharts

  • Daqo New Energy Corp.: The company announced its financial results for Q2 2022 on Aug 3. Net income attributable to shareholders grew nearly three times year-over-year (YOY).
  • Hannon Armstrong Sustainable Infrastructure Capital Inc.: Hannon Armstrong Sustainable Infrastructure Capital is a real estate investment trust (REIT) that invests in sustainable infrastructure. It focuses on investments in real estate used for climate solutions, renewable energy, and related projects. On Aug. 4, Hannon Armstrong announced a quarterly cash dividend of $0.375 per share of common stock. The dividend is payable on Oct. 11 to shareholders as of Aug 8, 2022.
  • Canadian Solar Inc.: Canadian Solar is a Canada-based solar product developer that designs, builds, and sells modules for residential, commercial, and industrial customers. The company's products include solar modules, inverters, and system kits.

Fastest Growing Solar Stocks

These are the top solar stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.

Fastest Growing Solar Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Daqo New Energy Corp. (DQ) 64.53 4.8 170.0 181.9
Enphase Energy Inc. (ENPH) 300.91 40.8 92.9 67.8
Sunnova Energy International Inc. (NOVA) 27.58 3.2 N/A see company description for details. 120.9

Source: YCharts

  • Daqo New Energy Corp.: See above for company description. The company announced its financial results for Q2 2022 on Aug 3. Net income attributable to shareholders grew nearly three times year-over-year (YOY).
  • Enphase Energy Inc.: Enphase Energy is a global energy technology company that brings solar, batteries, and software together in one complete package. It supplies microinverter-based, solar-plus-storage systems. The company reported Q2 2022 results on July 26. the company reported a record quarterly revenue of $530.2 million. 
  • Sunnova Energy International Inc.: Sunnova Energy International, Inc. operates as a residential energy service provider. It offers solar energy systems, electric vehicle chargers, and home solar protection. On July 27, Sunnova reported earnings for Q2 FY 2022. The company reported negative earnings per share (EPS) for the quarter. As a result, its percent change cannot be calculated and no number is included in the table above. Sunnova saw revenue increase to $147 million compared to $80.5 million in the same quarter a year ago.

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) 300.91 40.8 64.0
Array Technologies Inc. (ARRY) 17.66 2.7 28.5
Maxeon Solar Technologies Ltd. (MAXN) 18.88 0.8 25.3
Russell 1000 N/A N/A -7.1
Invesco Solar ETF (TAN) N/A N/A -1.7

Source: YCharts

  • Enphase Energy Inc.: See above for company description.
  • Array Technologies Inc.: Array Technologies manufactures ground-mounting systems used in solar energy projects. The company sells its products to engineering, procurement, and construction firms that build solar energy projects and to large solar developers, independent power producers, and utilities, master supply agreements, or multi-year procurement contracts.
  • Maxeon Solar Technologies Ltd.: Maxeon Solar Technologies manufacturers and markets premium solar power technology. Its products include Maxeon Line of IBC solar cells and panels, and the Performance Line of shingled solar cells and panels. 

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Article Sources
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  1. YCharts. “Financial Data.”

  2. Senate Democratic Leadership. "Summary of the Energy Security and Climate Change Investments in the Inflation Reduction Act of 2022."

  3. PR Newswire. "Daqo New Energy Announces Unaudited Second Quarter 2022 Results."

  4. Hannon Armstrong Sustainable Infrastructure Capital Inc. "Hannon Armstrong Announces Second Quarter 2022 Results and Declares Dividend."

  5. Daqo New Energy Corp. "Daqo New Energy Announces Unaudited Second Quarter 2022 Results."

  6. Enphase Energy Inc. "Enphase Energy Reports Financial Results for the Second Quarter of 2022," Pages 1-2.

  7. Sunnova Energy International Inc. "Sunnova Reports Second Quarter 2022 Financial Results."

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