3 Overlooked Solar Stocks to Buy Before They Surge

Industry Overview - Solar stocks have faced challenges due to macroeconomic headwinds, industry competition, and overcapacity fears, particularly in China, leading to decreased investor interest [1] - Despite these challenges, the renewable energy sector, particularly solar, is expected to create significant value as it navigates near-term headwinds, with renewable energy capacity increasing by 50% in 2023, and solar PV accounting for three-quarters of this growth [1] Renewable Energy Targets - To meet the 1.5 C Paris Agreement climate warming ceiling, renewable energy power generation capacity must expand three-fold to 11,174 GW by the end of the decade, with solar PV capacity needing to reach at least 5,400 GW by 2030, indicating substantial upcoming investments [2] First Solar (FSLR) - First Solar has maintained a sideways stock performance after a significant correction, presenting an opportunity for accumulation, with a forward price-earnings ratio of 12.4 [3] - As of Q4 2023, First Solar reported a backlog of 80.1 GW and net bookings of 28.3 GW, with potential booking opportunities of 66.5 GW, providing clear revenue visibility [3] - The company exited 2023 with a nameplate capacity of 16.6 GW and expects to increase this to 25.2 GW by the end of 2026, with 14.1 GW in the United States, indicating a positive growth outlook [3] Canadian Solar (CSIQ) - Canadian Solar's stock has experienced a correction of over 50% in the last 12 months, trading at a forward price-earnings ratio of 6.1, suggesting it is deeply undervalued [5] - The company anticipates a solar module capacity of 61 GW by December 2024 and has a battery energy storage capacity of 20 GWh as of December 2023, with operations in over 20 countries [5] - Canadian Solar has a 27 GW solar project pipeline and a total battery storage pipeline of 55 GWh, providing clear revenue upside visibility [5] Enphase Energy (ENPH) - Enphase Energy's stock has stabilized after a correction in early 2023, with expectations for upward trends due to positive business developments [7] - The company specializes in microinverter-based solar-plus-storage systems and has over 400 granted patents globally, with more than 73 million microinverters shipped [7] - Enphase reported an operating cash flow of $696.8 million in 2023 and cash and equivalents of $1.7 billion, providing flexibility for product innovation and growth potential in the EV market with its IQ EV Charger [8]