3 Top Green Energy Stocks Under Biden’s Environmental Push

energy stocks3 Sizzling Solar Stocks for Biden’s New Green Plan

When President Donald Trump pulled the U.S. out of the Paris Agreement, everyone thought the future of green energy was dead in America. That may have been the perception, but the reality was the world continued to accelerate its move toward making the world a less toxic place.

The push for green energy paused under Trump, but then the idea of the Green New Deal was suddenly promoted by the progressives in the Democratic Party and it formed a major talking point in the Democratic presidential primaries.

Now, with President-elect Joe Biden set to take the helm, and with the Democrats winning back control of the Senate for at least two years, there’s renewed optimism that green energy will become critical policy.

The uncertainty surrounding the Green New Deal is about the scale. I highly doubt the entirety of the green energy plan will be achievable in one term.

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My thinking is that the drive toward alternative energy sources such as solar, wind, hydrogen, lithium, and water may be significant, but at the same time, I doubt fossil fuels such as oil and coal will totally disappear.

The current tailwinds for green energy and the solar segment are bullish.

Given the rapid drop in the cost of solar photovoltaic (PV) modules over the past decade, and the fact that many countries provide tax credits for using solar energy, the outlook is positive. I wouldn’t be surprised if Biden expands tax credits for alternative energy in order to drive job growth and his green agenda.

During the Democratic presidential primary debates, Biden talked about creating millions of good-paying jobs in the green energy space. Should this strategy become reality, green energy stocks will likely vault much higher.

Simply take a look at the massive run-up in solar stocks since the election.

Invesco Solar ETF (NYSE:TAN) was drifting around $70.00 on November 3, rallying from $21.14 during its March 2020 low.

After the election win by Biden, the market turned extremely bullish on green energy. Invesco Solar ETF rallied another 74% in the subsequent two months, trading at a 52-week high of $123.66 on January 7.

Chart courtesy of StockCharts.com

The upward explosion in the solar energy sector led to euphoric moves by the majority of solar stocks to new 52-week highs.

Technically, the price acceleration is likely not sustainable. It will depend on what Biden actually does in the green energy space, and if companies can execute their strategies. There are uncertainties, but overall, I’m more bullish on solar stocks than before.

3 Go-To Green Energy Stocks

I’ve decided to highlight U.S. solar stocks, since that’s the sector Biden will focus on to create American green energy jobs. The president-elect wants to generate millions of new jobs in that sector. This implies he’ll try to bring back (or develop new) domestic production in the U.S.

This, clearly, will help the three major domestic green energy stocks listed below.

Note that the three solar stocks are different as far as their businesses go, so there’s no major overlap.

First Solar, Inc: The King of Solar Panels

First Solar, Inc. (NASDAQ:FSLR) has been one of my top solar stocks for years. The company designs and manufactures PV solar energy solutions that use a proprietary thin-film semiconductor technology.

With $11.0 billion in market cap after reaching a 52-week high of $109.62 on January 8, First Solar stock is one of the biggest players in the U.S. solar sector.

Even with its recent moves, FSLR stock is well below its record $175.45 achieved in February 2011.

Chart courtesy of StockCharts.com

First Solar, Inc. has strengthened its balance sheet by cutting its debt, and it has built a significant cash reserve, which will allow the company to expand.

Aiming to be a low-cost PV producer, First Solar has what it takes to benefit from not only the renewed green energy focus in the U.S., but worldwide.

Sunrun Inc: A Giant in Residential Solar Energy

Sunrun Inc (NASDAQ:RUN) is one of the two biggest solar plays, with a market cap of more than $19.0 billion. RUN stock traded at a new record high of $97.50 on January 8 and is, as of this writing, up by a staggering 547% over the past year.

Chart courtesy of StockCharts.com

Sunrun Inc focuses on providing complete solar energy systems to the residential housing market.

The major increase in value of RUN stock was triggered by the company’s acquisition of residential solar installation company Vivint Solar, Inc. in 2020. The merger has created a giant in the home solar energy market.

If Biden expands the tax credits for home solar energy, Sunrun Inc could see its revenues take off.

SolarEdge Technologies Inc: Developing the “Guts” for Solar Power Conversion

SolarEdge Technologies Inc (NASDAQ:SEDG) has been one of the top performers since trading at $11.35 in November 2016, just after President Trump won the election.

Despite the absence of major federal support for green energy during the subsequent four years, SolarEdge rallied 3,300% during the Trump term to a record $377.00 on January 8.

Chart courtesy of StockCharts.com

With a market cap of more than $18.0 billion, SolarEdge Technologies Inc doesn’t produce solar panels like First Solar, nor install home solar energy systems like Sunrun.

The company develops the critical hardware and software used to convert DC energy from solar power to usable AC power.

All solar energy systems—residential, commercial, and small utilities—require the technologies provided by SolarEdge Technologies Inc. The company’s products are sold in more than 100 countries. That bodes well for SEDG stock.