Knowing More About Renewable Energy Stocks

By Solar Energy Last updated Oct 16, 2021

The current government is showing little enthusiasm for green causes and opposes tax credits for things like electric cars and the use of renewable energy. The introduction of higher tariffs on solar panels, steel, and aluminum has also brought additional costs to renewable energy companies. ^{Sources: 1}

Renewable energy shares are in high demand on the stock exchange due to political changes and increasing acceptance. After years of continued use of solar, wind, hydro, and other energy sources, investing in the underlying companies can be a turbulent ride. ^{Sources: 4, 8}

Places such as Iceland and Norway all generate their electricity from renewable sources, and many other countries have set themselves the goal of producing 100% renewable energy in the future. The national renewable energy markets are forecast to continue to grow over the coming decades. ^{Sources: 2}

According to the International Energy Agency (IEA), solar photovoltaics and onshore wind are the cheapest way to add new power generation in most countries. The IEA expects installed wind and solar capacity to overtake natural gas by 2023 and coal by 2024. In addition to electrification, renewables are also more efficient, leading to a significant reduction in the primary energy demand, as most renewables do not have a steam cycle that has higher losses than fossil fuels (losses of up to 40%). Approximately 65% of renewable energy systems are becoming more efficient and cheaper, and their share of total energy consumption is increasing. ^{Sources: 2, 8}

Read on as we look at seven green energy stocks expected to see further positive developments in 2021 and beyond. These companies are responsible for the production of renewable energies, play a role in key extraction technologies, and appear to have high potential in the new year. ^{Sources: 8}

In this article, we take a look at the top 10 wind and renewable energy stocks to buy in 2021. You can skip our comprehensive analysis of these green energy stocks and go directly to 5 of them. ^{Sources: 6}

Global Market Insights, a Delaware-based research firm, predicts that increased electricity demand will lead to an annual growth rate of more than 1% for the largest wind farms by 2027. The wind energy market is estimated to be worth more than $180 billion over the next six years. It is expected to exceed 120 gigawatts of installed capacity when investing in renewable energy increases and government policies to reduce carbon emissions move away from fossil fuels. By 2050, 50% of the world’s energy production will come from wind and solar energy. ^{Sources: 6, 7}

The Energy Information Institute predicts that clean natural gas will provide a larger share of the nation’s electricity in the coming years due to the increased use of wind and solar power and declining coal consumption. Other energy sources such as biomass, geothermal energy, hydropower, and tidal power are also showing increasingly promising results. ^{Sources: 1}

Shell spent $2 billion on renewable energy investments in 2016 alone. Combined with President Joe Biden’s plan to invest $400 billion in clean-energy innovation over the next decade, the long-term outlook for the industry looks rosy. ^{Sources: 4, 7}

Investors pay little attention to these two renewable energy sources. They are developed in places with suitable geography and large rivers such as hydropower, volcanic activity, and geothermal energy, and many projects are state-run. ^{Sources: 5}

The alternative energy sector consists of companies engaged in the production, distribution, and sale of renewable and clean energy products and services. Wind turbines are the best-known symbol of renewable energy, and wind energy is one of the fastest-growing sources. Compared to other renewable energies, wind energy is an unsaturated industry. ^{Sources: 3, 5}

MSCI calculates that by its metrics, the shares are overcrowded, accounting for more than 8 percent of the renewable energy sector’s weight at the end of March, more than the next-largest sector at 3 percent. Clean-energy stocks are only a fraction as full as they were before the dotcom crash of 2000 when the technology-heavy Nasdaq Composite Index plunged 78% over the next two-and-a-half years. The MSCI model predicts that, with strong economic headwinds, such as an outbreak of stagflation, the scale of displacement would mean that the renewable-energy sector would decline by 42%, compared to a 31% decline in growth stocks and a 20% decline in the global market in general. ^{Sources: 9}

By that standard, NextEra could one day become the first aristocrat to pay a green dividend. The green electricity giant could also be banking on something else. ^{Sources: 5}

One problem with wind and solar power, which green-energy naysayers are quick to point out, is that they are unreliable. Solar panels don’t do much on a cloudy day, and wind turbines are useless without wind. ^{Sources: 5}

If we want to run our electricity grid from renewable energy sources such as wind and solar, we need a way of extracting the excess electricity produced on sunny or windy days and storing it for use on cloudy days. The transition from fossil fuels to clean energy will take trillions of dollars and many decades. ^{Sources: 0, 5}

Eversource Energy (ES) shares have gained more than 9% in value over the last twelve months. It has a strong balance sheet, one of the highest investment-grade bonds in the renewable energy sector, and a lot of cash liquidity and available credit to finance growth. Eversource ranks seventh on our list of the 10 best wind and renewable energy stocks to buy in 2021. ^{Sources: 0, 6}

It sees its financial capacity to invest between $800 million and $1 billion a year to expand its portfolio by 2025, with a focus on developing new solar energy. This investment will boost annual cash flow growth and share growth of between 11% and 16%, which will support an annual dividend increase of 5% to 9%. ^{Sources: 0}

Last week Enphase announced an expanded collaboration with Palomar Solar, a leading solar energy company. The company will integrate the storage of emphases into its full range of customer services. ^{Sources: 4}

These changes in the energy sector have created many short- and long-term opportunities. Batteries and a wide range of other long-life battery applications promise to make the power grid more efficient and allow for wider use of alternative energy sources such as wind and solar.

Knowing More About Renewable Energy Stocks

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