Per the Annual Energy Outlook report published by the U.S. Energy Information Administration (EIA) in March 2022, U.S. power generation from renewable sources of energy is projected to increase from 21% in 2021 to 44% in 2050. Impressively, new wind and solar power will constitute the majority of this renewable energy increase, with total solar generation projected to surpass wind generation by the early 2030s.
Such an encouraging forecast brings the spotlight on prominent solar stocks like
Enphase Energy
ENPH
,
JinkoSolar
JKS
and SolarEdge Technologies
SEDG
.
Factors Shaping the Growth Trend
Growth in U.S. solar generation capacity is buoyed by extension of investment tax credit for both solar and solar plus storage installations, which helped reduce the cost of solar projects. Additionally, the sustained process of retirement of coal generators and the slow pace of growth in natural gas-fired generation are propelling demand for solar energy in the United States.
Also, as solar power fails to provide electricity 24×7, battery storage technology recorded a huge jump in demand in the United States. In 2021, the country recorded a solid 200% expansion in battery storage capacity, highlighting the increased adoption of storage solution technology. Per the latest EIA report, the United States is likely to witness a capacity addition of 10 gigawatts in battery storage in the next two years.
Undoubtedly, these factors will boost the solar generation capacity in the United States as the nation strives to increase the pace of transition toward a cleaner environment.
Stocks to Watch
In the light of the aforementioned factors, the solar stocks which investors should keep in their watchlist are:
Enphase Energy
:ENPH enjoys a solid position in the solar market and manufactures fully integrated solar-plus-storage solutions. Enphase strives to attain sustainable growth by continuously introducing innovative products and strategic acquisitions.
Enphase anticipates to ship between 110 and 120 megawatt-hours (MWh) of batteries in the first quarter of 2022, indicating growth of 15% from the fourth-quarter 2021 level. ENPH currently carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
JinkoSolar
: JKS is one of the largest and the most innovative solar module manufacturers in the world. One of every 10 solar modules installed worldwide was manufactured by JinkoSolar. JKS expects 2022 shipments of solar module, cell and wafer in the range of 35-40 gigawatts (GW) as compared to 25 GW shipped in 2021.
JinkoSolar currently carries a Zacks Rank of 3. JKS’s 2022 estimated earnings suggest growth of 49.4% from the prior-year figure.
SolarEdge Technologies
: SEDG’s optimized inverter solutions benefit a broad range of solar market segments. SolarEdge launched its residential battery the SolarEdge energy bank in 2021, a 10-kW single-phase battery that integrates with its SolarEdge energy hub family of inverters. SEDG plans to ship 100-120 MWh of residential batteries in the first quarter of 2022.
SolarEdge is currently Zacks #3 Ranked. SEDG boasts a long-term earnings growth rate of 23%.
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