4 Solar Stocks That Might Beat the Market in 2025

Industry Overview - The global solar industry is projected to experience significant growth in 2024, despite a slowdown in demand in Europe, which held a 19% share of the global market in 2023 [1] - The industry reached a historic milestone of 2 terawatts (TW) of installed solar PV capacity in November 2024 [3] - However, the outlook for 2025 is less optimistic, with global installations expected to decline by 0.4% to 492 gigawatts [6] Challenges - The European solar market faces challenges such as oversupply of panels, competition from countries with cheaper solar products, and lower utility rates [1] - In 2025, installations in major countries like Brazil and India may suffer due to increased tariffs, grid connectivity delays, land acquisition issues, and domestic content requirement standards [5][13] - Limited grid capacity and the need to curtail solar generation are anticipated to negatively impact installations in China, which accounts for over 50% of global solar installations [13] Company Insights - First Solar (FSLR): The largest thin-film PV solar module manufacturer globally, with an expected annual manufacturing capacity exceeding 25 GW by the end of 2026. The consensus estimate for FSLR's 2025 sales is $5.53 billion, reflecting a 32.8% improvement from the prior year [7][16] - Enphase Energy (ENPH): A leading manufacturer of solar microinverters and batteries, with a long-term earnings growth rate of 3.6%. The consensus estimate for ENPH's 2025 sales is $1.70 billion, indicating a 27.7% increase from the previous year [8][9] - Nextracker (NXT): The number-one global market-share solar tracker company, with a market share of 30%. The consensus estimate for NXT's 2025 sales is $3.17 billion, an 11.1% improvement from the prior year, and earnings are expected to be $3.44 per share, up 5.7% [10][18] - Canadian Solar (CSIQ): A company that has delivered over 118 GW of solar modules globally, with a consensus estimate for 2025 sales at $7.59 billion, reflecting an 18.4% increase from the previous year [19][20] Investment Focus - Investors are encouraged to consider stocks from the Zacks solar industry, including First Solar, Enphase Energy, Nextracker, and Canadian Solar, due to their favorable growth prospects and strong market presence [11][15]