Turn Solar Power into Profit Power with These 2 Green-Zone Picks

By TradeSmith Research Team

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TradeSmith Senior Analyst Mike Burnick spent one of his summers in the 1980s at a solar company earning extra cash for college.

Back then, he didn’t feel like he was part of something big or revolutionary.

The solar panel technology of the era was awful, expensive, and downright inefficient.

But ask Mike how he feels about solar power today, and his view couldn’t be more different.

The technology is more advanced than ever, costs have gone down, and solar panels efficiently power residential and commercial properties the world over.

Solar powered roughly 4% of homes in the United States last year, while a new solar project was installed every 60 seconds across the country.

And by now, there’s a good chance a few homes in your own neighborhood are adorned with rooftop solar panels like the ones pictured below:

Source: popularmechanics.com

These rooftop panels are known as PV (photovoltaic) systems, and as many as one in seven U.S. homes are expected to have one by 2030.

All those new systems will generate big bucks – enough to grow the value of the global solar power market 86.90% over the next eight years, from an estimated $197.23 billion in 2021 to $368.63 billion by 2030. To help you claim your share of those solar profits, we’re bringing you two potential moneymaking opportunities that you can invest in today.

Our Top 2 Green-Zone Solar Energy Picks

You’re always going to make more money by buying individual stocks over ETFs (exchange-traded funds). An ETF is a basket of securities. With individual stocks, you own shares in a specific company.

But for risk-averse investors who are just looking to dip their toes into the water with solar investments, an ETF may be a suitable option.

The right solar ETF can give you broad exposure to the solar industry and typically with much less volatile price swings than you’d get by owning an individual stock.

In our Green Zone right now is the Invesco Solar ETF (TAN), which holds some of the best solar companies in the industry.

Its top three holdings, Enphase Energy Inc. (ENPH), First Solar Inc. (FSLR), and SolarEdge Technologies Inc. (SEDG), are all stocks in our Green Zone.

In other words, by investing in TAN, you’re getting exposure to three Green Zone stocks at once. But we also believe one of those holdings, First Solar, deserves its own spot on your solar watchlist.

Because the FSLR stock just received a massive upgrade from a Goldman Sachs analyst, who more than doubled his price target from $60 to $172. As of this writing, that would be a 25% premium from FSLR’s current price of $137.14.

One of the reasons analysts are so bullish on FSLR is the recently passed Inflation Reduction Act, which will provide $370 billion in funding to clean energy initiatives.

But how does FSLR stack up against TAN, according to TradeSmith tools?

When we look at the Health Indicator and the Volatility Quotient (VQ) for both, the investment opportunities look similar. Both are considered high risk, with TAN having a slightly lower VQ level as of this writing.

Ultimately, it’s up to you to decide what’s best for your individual situation.

But FSLR and TAN are two great options for capitalizing on the push for solar energy.

We hope this has put new investment ideas on your radar that will help you navigate making money in this choppy market.

Speaking of knowing what to do in this market, make sure to check out the special note below before heading out.