President Joe Biden has consistently reiterated his emphasis on renewable energy and the subsequent reduction of greenhouse gas emissions as effective measures to battle the onslaught of climate change. In fact, on his first day in office as the President on Jan 20, Biden had signed an executive order and the United States rejoined the Paris Agreement, which is aimed at strengthening the global response to fight climate change.
Moreover, Biden recently unveiled his proposal for $2.3 trillion infrastructure spending which focuses heavily on going green. The plan aims to fully decarbonize the U.S. energy sector by 2035 while offering a 10-year extension of tax credits for clean energy generation and storage, among others. Adding to that commitment, on Earth Day which was celebrated on Apr 22, Biden pledged to reduce U.S. greenhouse gas emissions by 50% to 52% by 2030.
On a positive note, the United States has already started taking steps in the right direction in terms of adopting clean energy. Notably, U.S. local governments bought more renewable energy than ever before in 2020, despite the challenges posed by the COVID-19 pandemic, as quoted in a
GreenBiz article
. The article mentioned that nearly 100 cities and counties across 33 states completed 143 deals in 2020, which added 3,683 megawatts of renewable energy capacity, marking an increase of 23% over 2019.
Wind and Solar Energy Powering the Clean Energy Drive
Both wind and solar energy have been popular forms of renewable energy generation and the United States has been adopting them quite rapidly. In fact, 2020 saw both wind and solar capacity installations record new highs. Markedly, the Energy Information Administration (“EIA”) stated that annual wind turbine capacity additions in the United States totaled a record 14.2 gigawatts (GW), which surpassed the previous record of 13.2 GW in 2012, as quoted in a
Renewable Energy World article
. Meanwhile, per a
report
by the Solar Energy Industries Association, the U.S. solar market installed a record 19.2 GWdc of solar capacity in 2020, witnessing an increase of 43% over 2019.
Notably, this increasing reliance on both wind and solar energy is expected to continue in the near future as well. Per the short-term energy outlook
report
published on Apr 6 by the EIA, the forecast is of 16.1 GW of new wind capacity addition in 2021 and 5.8 GW in 2022. Meanwhile, EIA expects utility-scale solar capacity additions to be 15.8 GW in 2021 and 14.9 GW in 2022.
Shift to Electric Vehicles Accelerating
Besides adopting clean energy sources for power generation, the United States is also set to adopt electric vehicles (EVs) at a rapid pace as the country looks to cut down on carbon emissions. In any case, 2020 saw U.S. EV registrations reaching a record market share of 1.8%, per the IHS Markit, as cited in a
Business Wire article
. The article further mentioned that EV sales are expected to surpass 3.5% nationally in 2021 and continue to increase to more than 10% in 2025.
5 Stocks to Keep an Eye On
The United States is witnessing rapid adoption of clean energy sources as the battle against climate change and reduction of greenhouse gas emissions continue. This makes it a good time to take a look at stocks that can benefit from this trend of going green. Notably, we have selected five such stocks that carry a Zacks Rank #2 (Buy) or 3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Enphase Energy, Inc.
ENPH
, together with its subsidiaries, designs, develops, manufactures and sells home energy solutions for the solar photovoltaic industry in the United States and internationally. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 2.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 51.8%.
Otter Tail Corporation
’s
OTTR
Electric segment generates electricity through coal, wind and hydro, and natural gas. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 2% over the past 60 days. The company’s expected earnings growth rate for the current year is 6.8%.
CMS Energy Corporation
CMS
operates as an energy company primarily in Michigan and its Electric Utility segment generates electricity through coal, wind, gas, renewable energy, oil, and nuclear sources. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 1.8% over the past 60 days. The company’s expected earnings growth rate for the current year is 8.6%.
NextEra Energy, Inc.
NEE
generates electricity through wind, solar, nuclear and fossil fuel, and develops, constructs, and operates long-term contracted assets with a focus on renewable generation facilities, electric transmission facilities, and battery storage projects. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its next-quarter earnings increased 4.2% over the past 60 days. The company’s expected earnings growth rate for the current year is 8.7%.
Tesla Inc.
TSLA
has maintained its focus on restoring a green environment and it has undertaken that initiative by launching electric vehicles. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 7.7% over the past 60 days. The company’s expected earnings growth rate for the current year is 92.4%.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>
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