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5 Clean-Energy Stocks to Watch Amid US Renewables Revolution
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Thanks to the rapid expansion of the U.S. renewable energy sector, the country is progressing steadily on its path of clean energy revolution. Though the COVID-19 pandemic dealt a blow to the nation’s renewable sector last year, the impact was not long-lasting and the sector has picked up a smooth growth pace.
Per data published by the U.S. Energy Information Administration (EIA), in 2020, renewable energy sources generated a record 834 billion kilowatt-hours (kWh) of electricity, thereby surpassing both nuclear and coal for the first time on record. We expect similar renewable growth in 2022 as well, which should benefit industry players like Enphase Energy (ENPH - Free Report) , First Solar (FSLR - Free Report) , Evergy (EVRG - Free Report) , Chesapeake Energy (CHK - Free Report) and Ameresco (AMRC - Free Report) .
What’s Driving U.S. Renewables Growth?
Quite a few favorable factors have been driving the recent growth trajectory that America’s renewable energy sector has been witnessing. The primary catalyst driving the rise of renewables is the growing demand for clean energy to avoid environmental hazards arising from carbon emissions that are a byproduct of electricity generated through fossil fuels like coal.
Rapidly plummeting cost of generating electricity from clean energy like solar and wind, when compared to traditional resources, has been another growth driver for the renewable sector. Per a report by the International Renewable Energy Agency (IRENA), published in mid-2020, since 2010, utility-scale solar PV power has shown the sharpest cost decline at 82%, followed by onshore wind at 39% and offshore wind at 29%.
Government policies such as an extended federal Investment Tax Credit for offshore wind energy along with the extension of production tax credit have been boosting overall renewable capacity additions lately.
Another factor instilling growth in the U.S. renewable energy sector is the emergence and rapid adoption of electrified transportation, better known as electric vehicles (EV). The U.S. EV market is expected to reach 6.9-million unit sales by 2025, reflecting a significant improvement from the 1.4 million unit sales forecast for 2020, as estimated by Frost & Sullivan’s analysis. Such an impressive outlook bolsters the growth prospects of clean energy stocks.
Stocks to Watch
Considering the aforementioned factors, investors can tap the booming U.S. renewables market by keeping track of the following stocks.
Chesapeake Energy: Based in Oklahoma City, OK, Chesapeake is an exploration and production company engaged in the acquisition, exploration and development of properties to produce oil, natural gas and NGLs from underground reservoirs. In November 2021, Chesapeake completed the acquisition of Vine, an energy company focused on the development of natural gas properties in the over-pressured stacked Haynesville and Mid-Bossier shale plays in Northwest Louisiana, for $2.2 billion.
The Zacks Consensus Estimate for Chesapeake’s 2021 earnings has improved 16.1% in the past 60 days. The company delivered an average earnings surprise of 23.05% in the last four quarters. Chesapeake currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Evergy: Based in Kansas City, MO, this company provides clean, safe and reliable energy to 1.6 million customers in Kansas and Missouri. In December 2021, Evergy proposed a suite of energy efficiency programs to the Kansas Corporation Commission, which aims to provide Kansas residential and business customers with $42 million in anticipated net bill savings. Such proposals, if approved, will benefit Evergy’s existing customers along with attracting new customers.
The Zacks Consensus Estimate for Evergy’s 2021 earnings has improved 3.9% in the past 60 days. The company delivered an average earnings surprise of 22.44% in the last four quarters. Evergy currently carries a Zacks Rank #2 (Buy).
Ameresco: Based in Farmingham, MA, Ameresco is a leading renewable energy asset developer, owner and operator. Its comprehensive portfolio includes energy efficiency, infrastructure upgrades, asset sustainability and renewable energy solutions. Earlier in December, the company announced its partnership with Merthyr Tydfil Council on an energy conservation project, a deal projected to expand Ameresco’s presence in the United Kingdom.
The Zacks Consensus Estimate for Ameresco’s 2021 earnings has moved up 11.7% in the past 60 days. The company delivered an average earnings surprise of 64.51% in the last four quarters. Ameresco currently holds a Zacks Rank #2.
Enphase Energy: Based in Fermont, CA, Enphase enjoys a strong position as a leading U.S. manufacturer of microinverter. Apart from microinverters, the company also designs, develops, manufactures and sells home energy solutions, which connect energy generation, energy storage and control and communications management on one intelligent platform. At the onset of fourth-quarter 2021, Enphase introduced its all-in-one Enphase Energy System with IQ8 solar microinverters for customers in North America.
The Zacks Consensus Estimate for Enphase’s 2021 earnings has moved up 17.1% in the past 60 days. The company delivered an average earnings surprise of 29.49% in the last four quarters. Enphase Energy currently carries a Zacks Rank #3 (Hold).
First Solar: Based in Tempe, AZ, First Solar is a leading global provider of comprehensive PV solar energy solutions and specializes in designing, manufacturing, and selling solar electric power modules using proprietary thin-film semiconductor technology. As of Sep 30, 2021, First Solar had almost 7.9 GWdc of total installed Series 6 nameplate production capacity across all its facilities, which it projects to double to 16 GWdc in 2024.
Such production ramp-up expectations indicated that First Solar should be able to maintain its position as the largest U.S. solar module manufacturer. FSLR stock boasts a long-term earnings growth rate of 10.8%. The company delivered an average earnings surprise of 19.01% in the last four quarters. First Solar carries a Zacks Rank #3.
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5 Clean-Energy Stocks to Watch Amid US Renewables Revolution
Thanks to the rapid expansion of the U.S. renewable energy sector, the country is progressing steadily on its path of clean energy revolution. Though the COVID-19 pandemic dealt a blow to the nation’s renewable sector last year, the impact was not long-lasting and the sector has picked up a smooth growth pace.
Per data published by the U.S. Energy Information Administration (EIA), in 2020, renewable energy sources generated a record 834 billion kilowatt-hours (kWh) of electricity, thereby surpassing both nuclear and coal for the first time on record. We expect similar renewable growth in 2022 as well, which should benefit industry players like Enphase Energy (ENPH - Free Report) , First Solar (FSLR - Free Report) , Evergy (EVRG - Free Report) , Chesapeake Energy (CHK - Free Report) and Ameresco (AMRC - Free Report) .
What’s Driving U.S. Renewables Growth?
Quite a few favorable factors have been driving the recent growth trajectory that America’s renewable energy sector has been witnessing. The primary catalyst driving the rise of renewables is the growing demand for clean energy to avoid environmental hazards arising from carbon emissions that are a byproduct of electricity generated through fossil fuels like coal.
Rapidly plummeting cost of generating electricity from clean energy like solar and wind, when compared to traditional resources, has been another growth driver for the renewable sector. Per a report by the International Renewable Energy Agency (IRENA), published in mid-2020, since 2010, utility-scale solar PV power has shown the sharpest cost decline at 82%, followed by onshore wind at 39% and offshore wind at 29%.
Government policies such as an extended federal Investment Tax Credit for offshore wind energy along with the extension of production tax credit have been boosting overall renewable capacity additions lately.
Another factor instilling growth in the U.S. renewable energy sector is the emergence and rapid adoption of electrified transportation, better known as electric vehicles (EV). The U.S. EV market is expected to reach 6.9-million unit sales by 2025, reflecting a significant improvement from the 1.4 million unit sales forecast for 2020, as estimated by Frost & Sullivan’s analysis. Such an impressive outlook bolsters the growth prospects of clean energy stocks.
Stocks to Watch
Considering the aforementioned factors, investors can tap the booming U.S. renewables market by keeping track of the following stocks.
Chesapeake Energy: Based in Oklahoma City, OK, Chesapeake is an exploration and production company engaged in the acquisition, exploration and development of properties to produce oil, natural gas and NGLs from underground reservoirs. In November 2021, Chesapeake completed the acquisition of Vine, an energy company focused on the development of natural gas properties in the over-pressured stacked Haynesville and Mid-Bossier shale plays in Northwest Louisiana, for $2.2 billion.
The Zacks Consensus Estimate for Chesapeake’s 2021 earnings has improved 16.1% in the past 60 days. The company delivered an average earnings surprise of 23.05% in the last four quarters. Chesapeake currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Evergy: Based in Kansas City, MO, this company provides clean, safe and reliable energy to 1.6 million customers in Kansas and Missouri. In December 2021, Evergy proposed a suite of energy efficiency programs to the Kansas Corporation Commission, which aims to provide Kansas residential and business customers with $42 million in anticipated net bill savings. Such proposals, if approved, will benefit Evergy’s existing customers along with attracting new customers.
The Zacks Consensus Estimate for Evergy’s 2021 earnings has improved 3.9% in the past 60 days. The company delivered an average earnings surprise of 22.44% in the last four quarters. Evergy currently carries a Zacks Rank #2 (Buy).
Ameresco: Based in Farmingham, MA, Ameresco is a leading renewable energy asset developer, owner and operator. Its comprehensive portfolio includes energy efficiency, infrastructure upgrades, asset sustainability and renewable energy solutions. Earlier in December, the company announced its partnership with Merthyr Tydfil Council on an energy conservation project, a deal projected to expand Ameresco’s presence in the United Kingdom.
The Zacks Consensus Estimate for Ameresco’s 2021 earnings has moved up 11.7% in the past 60 days. The company delivered an average earnings surprise of 64.51% in the last four quarters. Ameresco currently holds a Zacks Rank #2.
Enphase Energy: Based in Fermont, CA, Enphase enjoys a strong position as a leading U.S. manufacturer of microinverter. Apart from microinverters, the company also designs, develops, manufactures and sells home energy solutions, which connect energy generation, energy storage and control and communications management on one intelligent platform. At the onset of fourth-quarter 2021, Enphase introduced its all-in-one Enphase Energy System with IQ8 solar microinverters for customers in North America.
The Zacks Consensus Estimate for Enphase’s 2021 earnings has moved up 17.1% in the past 60 days. The company delivered an average earnings surprise of 29.49% in the last four quarters. Enphase Energy currently carries a Zacks Rank #3 (Hold).
First Solar: Based in Tempe, AZ, First Solar is a leading global provider of comprehensive PV solar energy solutions and specializes in designing, manufacturing, and selling solar electric power modules using proprietary thin-film semiconductor technology. As of Sep 30, 2021, First Solar had almost 7.9 GWdc of total installed Series 6 nameplate production capacity across all its facilities, which it projects to double to 16 GWdc in 2024.
Such production ramp-up expectations indicated that First Solar should be able to maintain its position as the largest U.S. solar module manufacturer. FSLR stock boasts a long-term earnings growth rate of 10.8%. The company delivered an average earnings surprise of 19.01% in the last four quarters. First Solar carries a Zacks Rank #3.