We recently published a list of the 11 Best Renewable Energy Stocks To Buy Now. In this article, we are going to take a look at where First Solar, Inc. (NASDAQ:FSLR) stands against the other best renewable energy stocks to buy now.
The future of President Joe Biden’s landmark climate legislation, the Inflation Reduction Act (IRA) plays a significant role in promoting renewable energy by offering a wide range of tax incentives and funding mechanisms to encourage investment in clean energy technologies, including solar, wind, and geothermal power, hangs in the balance as the incoming Republican-controlled White House, Senate, and House of Representatives prepare to take office in 2025.
However, an area of concern is the future of the Department of Energy’s Loan Programs Office (LPO), which provides financing for green energy projects. The LPO has been instrumental in funding large-scale renewable energy projects and it expanded significantly under the IRA. However, Trump’s appointees, particularly Wright, who has expressed skepticism about the climate crisis, may be inclined to scale back or dismantle this program entirely, which could have a significant impact on the green energy sector.
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Renewables as the Key to Meeting Rising Demand
In an interview with Bloomberg on December 23, Tom Steyer, Co-Founder of Galvanize Climate Solutions, a climate-focused global investment firm, discussed the role of renewable energy in the United States. Steyer emphasized that while the year 2025 is often discussed in the context of climate regulations, it is more accurately about meeting the growing energy demand. He argued that renewable energy should be at the center of any energy bill, regardless of political persuasion. Steyer highlighted that market costs are the primary drivers of the energy transition to renewables. He cited the fact that in 2023, 86% of new electricity generation was predominantly from renewable sources, driven by economic rather than purely environmental considerations.
Steyer pointed out that the phrase “drill, baby, drill” might still be part of the political conversation, but the cost differential between renewable and fossil fuels drives the reality. He noted that renewables are now cheaper than fossil fuels and are becoming increasingly cost-effective. For instance, the cost of natural gas in the U.S. has risen to nearly double its previous levels, while in Europe, it is even higher. However, the cheapest electricity is increasingly coming from renewable sources, both in the U.S. and globally. This economic reality is driving business decisions, international competitiveness, and national security by industries such as tech, that require large amounts of electricity and are increasingly turning to renewables to meet their energy needs.
When asked about the potential impact of deregulation in the energy sector, Steyer suggested that deregulation could help accelerate the adoption of renewables if it includes faster permitting and lower oversight for all energy projects, including renewables. He noted that the Trump administration’s push for faster permits and reduced oversight for oil and gas drilling could extended to renewables, and will lead to a significant expansion of low-cost, abundant renewable energy.
Regarding nuclear energy, Steyer acknowledged its potential but noted the challenges associated with cost, safety, and public perception. He pointed out that nuclear energy has historically been expensive, with the last nuclear plant in Georgia costing at least four times its original estimate. While nuclear energy could provide a stable baseload power source, the high costs and safety concerns have made it a less attractive option compared to renewables.
As the United States enters 2025, the future of the Inflation Reduction Act (IRA) remains uncertain under a Republican government. However, the cost-effectiveness of renewable energy compared to fossil fuels makes it increasingly dominant in the global energy mix.
A solar panel farm with an orange sky illuminating the vast landscape.
Our Methodology
To compile our list of the 11 best renewable energy stocks to buy now, we used clean energy ETFs plus online rankings to compile an initial list of 25 renewable energy stocks. We then used Insider Monkey’s Hedge Fund database to rank 11 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
First Solar, Inc. (NASDAQ:FSLR)
Number of Hedge Fund Investors: 59
First Solar, Inc. (NASDAQ:FSLR) is a leading manufacturer of thin-film solar modules, primarily designed for utility-scale solar projects. The company’s advanced photovoltaic technology offers high energy efficiency and exceptional durability. First Solar, Inc. (NASDAQ:FSLR) generates revenue through the sale of solar modules, the development of solar power plants, and the provision of operations and maintenance services. Its customer base includes utility-scale project developers, power plant owners, and government organizations.
First Solar, Inc. (NASDAQ:FSLR) is taking proactive steps to protect its intellectual property and differentiate itself in a highly competitive market. The company possesses a robust TOPCon patent portfolio, which it has begun to leverage through outreach to various solar manufacturers, notifying them of potential infringement issues and reserving its rights. By securing and enforcing its intellectual property rights, First Solar, Inc. (NASDAQ:FSLR) aims to safeguard its competitive advantage and ensure that its unique value proposition is recognized and respected by all market participants.
First Solar, Inc. (NASDAQ:FSLR) is also focusing on expanding its technological capabilities and manufacturing capacity to achieve its goal of surpassing 14 gigawatts of annual U.S. capacity and over 25 gigawatts of global capacity by 2026. The company is advancing its perovskite technology through a new development line in Perrysburg, Ohio. This initiative aims to replicate in-line manufacturing conditions and expedite the commercialization of this innovative technology. First Solar, Inc. (NASDAQ:FSLR) recently opened its $1.1 billion Alabama facility, which will contribute an additional 3.5 gigawatts of vertically integrated solar manufacturing capacity once fully operational. Furthermore, the company remains on schedule to launch operations at its Louisiana facility in the second half of 2025.
Overall, FSLR ranks 4th on our list of best renewable energy stocks to buy according to buy now. While we acknowledge the potential of FSLR to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than FSLR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.