15 Best Solar Energy Stocks To Buy in 2022

Solar panel installations are surging as the world tries to stop relying on fossil fuels. And yet, beset by supply chain challenges and cost inflation, solar stocks have had a challenging 2021 and 2022. But the longer-term trend of more renewables is still good, so now could be a good time to invest. Here is a list of the top 15 solar energy stocks.

SustainFi   Updated June 8th, 2022

Why invest in solar energy?

The U.S., the European Union, and Japan have pledged to be carbon neutral by 2050, and the shift to renewable sources of energy like solar is a must. Solar energy emits no greenhouse gases, and sunshine is plentiful in many places, making solar the cheapest form of electricity globally, even without subsidies.

The fastest-growing renewable technology, solar energy provides only 3% of global electricity. So there is clearly room for growth. Helped by dropping costs, solar installations are booming. Solar energy is also benefiting from government regulations, tax credits, and corporate commitments to get to net-zero carbon. In 2021 alone, 183 GW of capacity was added globally; 2022 additions are expected to exceed 200 GW.

The main issue with solar is that the sun doesn’t shine all the time, so it can only generate electricity during the day. However, even this challenge is being solved with developments like better lithium-ion battery storage. Dropping battery costs would let customers bank solar power during the day and use it at night or even release it back into the grid.

In spite of these positive trends, solar stocks are volatile. The Invesco Solar ETF (TAN), the largest solar stock ETF, declined by 25% in 2021. Like many other industries, solar panel manufacturers are struggling with cost inflation and supply chain issues. The prices of key metals like steel and aluminum have gone up. There have been semiconductor shortages.

Some China-based manufacturers have also been hit when the U.S. government blocked solar panel shipments, alleging human rights abuses in the Xinjiang region, the heart of the Chinese solar industry.

However, these near-term challenges could mean it’s a good time to invest in the long-term trend.

The best solar energy stocks

There are several ways you can invest in solar:

1. Solar panel and component manufacturers

Photovoltaic cells in solar panels convert sunlight into energy. Companies like First Solar in the U.S. and JinkoSolar in China make the panels. Enphase Energy and SolarEdge design inverters, the “brains” of the solar panels. Xinyi Solar and Flat Glass Group make solar glass. And Daqo New Energy produces polysilicon, a material used to make solar wafers. However, most of the top solar panel manufacturers and component makers are based in China, and the stocks that are only listed in mainland China may be difficult for U.S.-based investors to access.

2. Solar panel installers

Residential or rooftop solar in the U.S. generates about 19 GW of power each year. Companies like SunnovaSunrun, and SunPower lease and sell solar panel systems and even provide battery storage. Demand for installations has increased in the aftermath of the wildfires in California and winter storms in Texas. 

3. Solar farms

Although anyone can install a solar panel on their roof and generate electricity, utilities build huge facilities, also known as solar farms. In the U.S., these utility-scale installations generate almost 17 GW of power. Although major renewable energy players like NextEra Energy operate solar farms, most of them are also big in wind, hydro, or natural gas. However, smaller companies like Atlantica Sustainable Infrastructure Plc are mostly tied to solar farms.

🔔 Learn how to invest in solar farms.

Solar energy stocks list

Here is a list of 15 solar energy stocks:

  • First Solar (FSLR)
  • SolarEdge (SEDG)
  • Enphase Energy (ENPH)
  • JinkoSolar Holding Co (JKS)
  • Daqo New Energy (DQ)
  • Xinyi Solar Holdings (XNYIF)
  • Flat Glass Group Co Ltd (FGSGF)
  • Canadian Solar (CSIQ)
  • Sunrun (RUN)
  • SunPower Corp (SPWR)
  • Sunnova (NOVA)
  • Maxeon Solar Technologies (MAXN)
  • Atlantica Sustainable Infrastructure Plc (AY)
  • Shoals Technologies Group (SHLS)
  • Array Technologies Inc (ARRY)

1. First Solar (FSLR)

  • Market capitalization: $7.7 billion

Founded in 1999, Arizona-based First Solar is one of the biggest solar panel manufacturers and solar project developers in the world. It is also the top U.S. solar manufacturer, specializing in panels for large-scale installations.

FSLR has six manufacturing facilities across Ohio, Malaysia, and Vietnam, with 8 GW of manufacturing capacity. FSLR is one of the few U.S. solar panel makers to survive Chinese competition over the past decade. FSLR reported over $2.9 billion in 2021 revenue, and it has $1.5 billion in cash on its balance sheet, a bonus in a volatile sector like solar.

However, the company has struggled with supply chain issues and high steel costs, and now they have to compete with duty-free imports from Southeast Asia.

2. SolarEdge (SEDG)

  • Market capitalization: $16.5 billion

Established in 2006 and headquartered in Israel, SolarEdge is the market leader in inverters for solar panels. An inverter is the “brains” of the solar panel, transforming the direct current (DC) power into alternating current (AC). SolarEdge’s innovative inverter business has grown twice as fast as the industry over the past five years. It has shipped over 28 GW since 2010, generating almost $2 billion in 2021 sales.

3. Enphase Energy (ENPH)

  • Market capitalization: $27.6 billion

Fremont, California-based Enphase Energy makes microinverters for solar panels and backup energy storage. The microinverter-based solar and battery systems let homeowners harness and sell their own power and control it with a mobile app. Enphase continues to see strong customer demand, although the supply chain has been constrained. The company made $1.4 billion in 2021 sales, a nearly 80% increase over the prior year.

4. JinkoSolar Holding Co (JKS)

  • Market capitalization: $3.3 billion

Chinese solar panel-maker JinkoSolar is one of the largest solar panel manufacturers in the world. Backed by the Chinese government, Chinese manufacturers have been cost-competitive, dominating the solar market over the past decade.

JinkoSolar has nine global production facilities, and its products are shipped to over 160 countries. The company reported over $6 billion in 2021 sales but has more recently struggled with high production costs and logistical delays.

5. Daqo New Energy (DQ)

  • Market capitalization: $4.8 billion

Daqo New Energy is a Chinese company making polysilicon and polysilicon wafers. One of the top polysilicon manufacturers worldwide, Daqo buys silicon powder and turns it into high-quality polysilicon, used to make polysilicon wafers. (Most of the world’s polysilicon is produced in China.) In turn, polysilicon wafers are sold to solar panel manufacturers who use them to make the panels.

Daqo has a lot of cash, and its profitability has been increasing throughout the year with higher polysilicon prices. It is running its production facilities at full capacity to meet demand. Daqo is, in essence, a commodity manufacturer; its fortunes are tied to polysilicon prices.

6. Xinyi Solar Holdings (XNYIF)

  • Market capitalization: 126 billion HKD

China-based Xinyi Solar is a leading global manufacturer of solar glass, used for solar panels. With a daily manufacturing capacity of 9,800 tons, Xinyi can meet about one-third of the global demand for solar glass products. With over $2 billion in sales, Xinyi is solidly profitable. Xinyi Solar is listed on the Hong Kong Stock Exchange and it trades over-the-counter in the U.S.

7. Flat Glass Group Co Ltd (FGSGF)

  • Market capitalization: 104 billion HKD

Another major manufacturer of solar glass, Flat Glass Group produces and sells photovoltaic glass, architectural glass, household glass, and more. Flat Glass Group serves customers in China and Hong Kong. With about $1.3 billion in sales, Flat Glass Group has partnerships with major solar panel makers like JinkoSolar.

8. Canadian Solar (CSIQ)

  • Market capitalization: $2.2 billion

Founded in 2001 in Canada, Canadian Solar makes solar panels and battery storage and develops utility-scale solar farms. They’ve shipped over 63 GW of solar panels to customers worldwide and developed a further 6 GW. They are currently focused on building out the battery storage business. With over $5 billion in revenue, Canadian Solar is profitable.

9. Sunrun (RUN)

  • Market capitalization: $5.8 billion

Fueled by devastating weather events which led to power losses, interest in residential solar installations has been growing in major U.S. markets like California and Texas. Yet fewer than 4% of U.S. houses have solar power, so there is plenty of room for growth.

San-Francisco, California-headquartered Sunrun is the largest U.S. residential solar company after buying its competitor Vivint Solar in 2020. Sunrun installs rooftop solar and battery storage, letting most customers save 5-45% in year one. Sunrun sells services in 22 states plus Puerto Rico and boasts over 600,000 customers. However, the company is being impacted by proposed cuts to solar subsidies in California, which will make residential solar less attractive to prospective customers.

10. SunPower Corp (SPWR)

  • Market capitalization: $3.3 billion

The second largest solar installer in the U.S., SunPower offers solar panels and battery storage to go with them. Although initially, SunPower targeted both commercial and residential markets, it is now focused on the more profitable residential market, having offloaded its commercial and industrial businesses in early 2022. With over $1.3 billion in 2021 sales and over $3 billion in market cap, SunPower will benefit as solar penetrates more U.S. homes.

11. Sunnova (NOVA)

  • Market capitalization: $2.6 billion

Houston, Texas-based Sunnova is another leading U.S. residential solar provider, offering rooftop solar panel installations and maintenance. Their offerings integrate solar, battery storage, electric vehicle charging, and energy management technologies. But, although Sunnova keeps adding customers and growing revenue, it is not yet very profitable.

12. Maxeon Solar Technologies (MAXN)

  • Market capitalization: $636 million

Formerly a part of SunPower, Maxeon Solar is now an independent solar panel manufacturer. Headquartered in Singapore and with factories in Malaysia, the Philippines, Mexico, France, and China, Maxeon continues to supply SunPower with panels. In 2021, Maxeon reported $783 million in sales. The company’s largest shareholders – TotalEnergies SE and Tianjin Zhonghuan Semiconductor Co – own nearly 50% of the stock.

13. Atlantica Sustainable Infrastructure Plc (AY)

  • Market capitalization: $3.9 billion

Based in London, U.K., Atlantica owns a portfolio of renewable energy assets along with storage and water desalination infrastructure. The portfolio includes 36 assets with 2 GW in installed capacity, 71% of which is solar. Assets are located in the U.S., South America, and Europe, so the business is diversified geographically. Atlantica sells energy under long-term contracts, with an average remaining term of 16 years. So it’s one of the less risky stocks on this list. AY generates over $1 billion in sales and has a market cap exceeding $3.5 billion.

14. Shoals Technologies Group (SHLS)

  • Market capitalization: $3.1 billion

U.S.-based Shoals Technologies Group provides electrical balance of system or “EBOS” solutions for U.S. solar energy projects. EBOS includes all the components that carry the electric current from the solar panel to the inverter and eventually the power grid. These mission-critical components include cable assemblies, inline fuses, combiners, disconnects, recombiners, wireless monitoring systems, junction boxes, transition enclosures, and splice boxes. The company reported $213 million in 2021 sales. Shoals is exposed to utility-scale solar and is a big beneficiary of Biden’s tariff suspension on Southeast Asian solar panel imports.

15. Array Technologies Inc (ARRY)

  • Market capitalization: $2 billion

Albuquerque, New Mexico-based Array Technologies is an American company making utility-scale solar trackers, which maximize solar panels output by letting them follow the sun’s path. The company’s 2021 deal to acquire Spain’s Soluciones Tecnicas Integrales Norland for about $650 million will make it the world’s largest producer of solar trackers. Soluciones Tecnicas Integrales Norland is a leading supplier of solar trackers in Brazil and Latin America. Array generated $853 million in 2021 sales and has a market cap in excess of $2 billion.

🔔 Want to invest in ETFs instead of stocks? Check out the list of solar power ETFs.

NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.

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