Renewable energy is one of the most promising industries, with a market size valued at 1.09 trillion in 2023 and expected to reach 2.45 trillion by 2032. The increase in global consciousness of climate change hasn’t changed. Subsidies and tax incentives for renewable energy companies have more than doubled from 7.4 billion in FY 2016 to 15.6 billion in FY 2022. Currently, at 1.21 trillion in global market size in 2023, the industry is expected to grow at a compound annual growth rate (CAGR) of 17.2% between 2024 and 2030. Below are the three renewable energy stocks for long-term growth that could make your grandchildren rich.
NextEra Energy (NEE)
NextEra Energy (NYSE:NEE) is the single largest owner of renewable energy assets in the country. The company also owns Florida Power & Light Company (FPL), the largest electric utility in the nation.
For the next three years, NextEra Energy plans to invest $12 billion in developing solar energy systems and an additional $1.5 billion in projects involving battery storage. Its extensive and continued investments in new renewable energy projects will help NextEra Energy solidify itself as a leader in the industry.
Regarding financials, NextEra Energy showcased solid performance over the past year. In the first quarter of 2024, NextEra Energy reported a net income of $2.268 billion. This is a marginal increase from $2.086 billion in Q1 2023. FPL also had great financials, reporting $1.172 billion in net income instead of $1.070 billion from the prior year quarter. As the company expands with its projects, NextEra Energy can dominate the renewable energy industry down the road.
On Semiconductor (ON)
On Semiconductor (NASDAQ:ON) is an American semiconductor supplier specializing in products and services like power management and sensing solutions. These products play a critical role in renewable energy technologies, serving as a key component in their applications. From electric vehicles to solar inverters, On Semicondcutor’s products offer various applications in renewable energy sources.
One of the most exciting things about On Semiconductor is its silicon carbide (SiC) platform — this important player pieces into electric vehicles, charging and other renewable energy infrastructure. On Semiconductor built its first SiC production facility in 2022 and has rapidly produced the technology. The market size for SiC is anticipated to increase from $2 billion in 2021 to $6.5 billion by 2026. This is a great opportunity to expand within the relatively new renewable energy market.
Shoals (SHLS)
Shoals (NASDAQ:SHLS) is a leader in providing electrical balance of systems (EBOS) for solar, energy storage and eMobility. The company has over 62 gigawatts under its contract, making it the largest EBOS supplier in the nation. Its products are mainly used in solar-energy projects.
June 11, Shoals announced repurchasing of up to $150 million of its Class A common stock by the end of next year. The board of directors reveals great confidence in the company’s long-term outlook.
In addition, analysts seem to be bullish on Shoal’s future. Shoal stock’s current closed price is $6.55; however, the analyst price target is more than double that, at $13.22. Fifteen of 19 analysts recommended a strong buy or buy, and no analysts gave a sell rating.
On the date of publication, Andy Kim did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
