With
global energy demand continuously on the rise, fossil fuels
alone will not be sufficient to meet the demand. Alternative energy, which is defined as any energy source other than fossil fuels, is gaining interest.
This segment addresses a lot of concerns linked to fossil fuel usage, including
carbon-dioxide emissions, climate change, and other harmful effects on the
environment. Companies operating in the alternate energy space include business
operations in products, services, and research associated with alternative
energy, and in production and supply of alternative energy. As development in
technology continues amid high fluctuations in oil prices, this sector is
expected to see high volatility.
This
article discusses the top alternate energy stocks that look promising for 2015.
The list is in alphabetical order with market capitalization, revenue, relative
past performance for last one year, a brief description of primary business
streams, and future prospects. Sun and wind rule the popularity list, while
others forms of energy like biomass, geothermal, hydroelectricity are limited
due to operational constraints and less efficiency. (See related: Why You
Should Invest in Green Energy Right Now)
1.
Canadian Solar Inc. (CSIQ): Founded in 2001 and headquartered in West Guelph,
Canada, Canadian Solar is in the business of designing, developing, and
producing solar cells, solar wafers, solar modules, and solar power products.
It operates globally with a presence in Canada, the US, China, Germany, India,
and Japan. Its market cap is around $1.9 billion and revenues are $914.38
million. Investors looking for investments in a global solar energy business
will find this company a good fit.
2.
Enphase (ENPH): Founded in 2006 and headquartered in Petaluma, California,
Enphase Energy, Inc. is in the business of developing and designing of
microinverter systems for the solar photovoltaic industry internationally.
Associated businesses include the Enlighten software portal that acquires,
processes, and relays information that helps customers to monitor and manage
their solar power systems. Enphase has a market cap of $537 million and
revenues of $105.21 million.
3.
First Solar (FSLR): Founded in 1985 and headquartered in Tempe, Arizona, First
Solar, Inc. is in the business of designing, manufacturing, and selling
photovoltaic solar equipment and solar power systems through its two segments:
components and systems. It has a market cap of $5.98 billion and revenues of $1
billion. It operates globally, serving commercial and industrial clients.
4.
NextEra Energy (NEE): Founded in 1984 and headquartered in Juno Beach, Florida,
NextEra is in the business of renewable energy generation from sun and wind. It
operates in the US and Canada through two subsidiaries: Florida Power &
Light Company and NextEra Energy Resources, LLC. The company offers wholesale
and retail electrical service to almost five million customers and owns
generation, transmission, and distribution facilities to support its services.
Its market cap is around $46.43 billion and revenues are $4.664 billion.
Investors looking for a company with operations in both wind and solar space
will find this company a good fit.
5.
Plug Power Inc. (PLUG): Founded in 1997 and headquartered in Latham, NY, Plug
Power provides technology for the alternative energy sector. Its business
operations are in “design, development, commercialization, and manufacture of
fuel cell systems for the industrial off-road market.” Its market cap is around
$454.32 million and revenues are $21.45 million. Although ranking lower in
terms of market cap compared to the other stocks mentioned, Plug Power is a
leader in fuel-cell technology and one of the pure technology players in the
alternate energy space.
1.
SolarCity Corp (SCTY): Founded in 2006 and headquartered in San Mateo,
California, SolarCity is designs, installs, and sells and leases solar systems
for commercial and residential customers. It also operates the sale of
electricity that is generated by solar systems. Other businesses include energy
storage, charging services for electrical vehicles, home energy evaluations,
and energy efficiency upgrades. The company’s market cap is around $4.81
billion and revenues are $71.81 million. With a wide variety of businesses
based on solar energy, this company is firmly placed in the list of top
alternative energy stocks.
2.
SunEdison, Inc. (SUNE): Founded in 1984 and headquartered in Maryland Heights,
Missouri, SunEdison Inc. is into renewable and solar energy. Through its three
segments (solar energy, semiconductor materials, and TerraForm Power), it is in
the business of developing, manufacturing and sales of silicon wafers,
photovoltaic cells, and other energy solutions. It has a market cap of $6.47
billion and revenues of $610.5 million.
3.
SunPower Corp. (SPWR): Founded in 1985 and headquartered in San Jose,
California, SunPower Corp. is an energy services and technology company. Its
customer base is spread across residential, industrial, and utility segments
with operations in North and South America, Europe, the Middle East, and Asia
Pacific. Its product range includes ground mounted and rooftop solar systems,
panels, and inverters. Its market cap is $41.7 billion and revenues are $1.17
billion. This company offers a good investment option with business serving a
diversified customer base globally.
4.
TerraForm Power (TERP): Founded in 2014 and headquartered in Bethesda,
Maryland, TerraForm Power Inc., owns and operates the contracted clean power
generation assets of SunEdison, Inc. and other entities. It is a wholly-owned
subsidiary of SunEdison. The company operates wind and solar power plants in
Canada, Chile, the UK, and the US. It plans to expand further into wind,
geothermal, natural gas, hydroelectricity, and hybrid-energy solutions, which
can make it a good long-term good investment option. Its market cap is $4.47
billion and revenues are $42.57 billion.
5.
Viviant Solar, Inc. (VSLR): Founded in 2011 and headquartered in Lehi, Utah, Viviant
Solar follows the distributed model for selling electricity generated by a
solar energy system installed at customers’ locations to other residential
energy customers, based on contract pricing. It operates in Arizona,
California, Hawai’i, Maryland, Massachusetts, New Jersey, New York, and Utah.
Viviant also offers photovoltaic installation software products and equipment.
It has a market cap of $1.3 billion and revenues of $6.86 billion. Investors
looking for a US-focused solar energy company might find this a good fit.
The
Bottom Line
The
alternative energy sector has seen a few challenges in last few years and
growth has not met expectations. For example, the US Department of Energy’s
loan program to fund solar industries had initial failures with companies like
Solyndra and Abound Solar going bankrupt. However, the program was reported to
break even in December 2014, showing signs of success and justifying the claims
that supporters of alternative energy will benefit in the long-term. Moreover,
the sector continues to evolve and is expected to see good growth in the mid-
to long-term. (A good number of companies listed above are less than a decade
old.) One can also explore alternate energy ETFs as an investment option.
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