Finder may earn compensation from partners, but editorial opinions are our own. Advertiser Disclosure

Investing in solar stocks

Solar energy is on the rise, but upfront consumer costs may hamper profitability.

Key stocks and ETFs
Pick a platform and trade
Avatar
Shannon Terrell
Updated
Fact checked

As global attitudes toward fossil fuels continue to shift, the renewable energy sector becomes an increasingly attractive portfolio addition. But until technology costs come down, solar energy may remain a luxury in the eyes of most consumers.

What are solar stocks?

Solar stocks are stocks from companies involved in the generation of solar energy and the manufacturing of solar energy technology.

Solar energy is one of several forms of renewable energy — an emerging market category that continues to gain traction as we pivot from oil reliance to more sustainable energy technologies, including solar, wind, hydro, tidal and geothermal energy.

There are numerous companies in the solar energy space. These companies produce the technology that allows us to capture energy from the sun and convert it into electricity. The types of companies that fall within the solar energy category:

  • Manufacture solar modules and cells
  • Manufacture power optimizers and inverters
  • Install solar panels
  • Design solar power systems
  • Operate solar energy generators

Why invest in solar stocks?

Energy fuels our world. It’s a global resource we rely on and the way we produce and consume energy is changing. In light of growing environmental concerns, there has been a global shift from traditional energy stocks toward renewable energy. And solar power is a massive component of the renewable energy market.

According to Allied Market Research, the global solar energy market was worth $52.5 billion in 2018. And that figure is projected to rise to $223.3 billion by 2026. The market is changing. The demand for oil is dropping. And solar stocks present a potentially lucrative long-term growth opportunity.

Investing in renewable energy also gives you the opportunity to add assets to your portfolio that impact the environment in a positive way. Solar energy can help reduce carbon dioxide emissions and lessen our impact on the environment. If you’re looking to add some socially conscious investments to your portfolio, solar stocks fit the bill.

Risks of investing in solar energy

Two major concerns for investors interested in solar energy are expenses and manufacturing.

Right now, solar energy is expensive. It’s expensive to manufacture, it’s expensive to install and it’s expensive to maintain. And while the high cost of solar energy means higher profits for solar companies, it also acts as a deterrent for consumers. To outfit a residential home with solar panels, consumers can expect to pay about $3 per watt — which shakes out to about $15,000 to $30,000 for the installation, all told.

Solar energy is less of a novelty than it once was, which means it’s becoming more affordable as the technology advances. But it still has a ways to go before it’s as accessible and mainstream as fossil fuel.

Another concern for investors is how solar cells and modules are manufactured. Some of the components of solar technology require rare earth metals that are acquired as a byproduct of other mining processes. Should the demand increase, the supply chain could be threatened. Other solar materials make use of the same hazardous materials as electronics, which presents disposal challenges.

Before you buy in, investigate the companies you’re interested in backing to find out more about their manufacturing processes and protocols.

Solar stocks

There are a variety of companies in the solar energy category, including module developers, cell manufacturers, renewable energy generators and more. Select a company to learn more about what they do and how their stock performs, including market capitalization, the price-to-earnings (P/E) ratio, price/earnings-to-growth (PEG) ratio and dividend yield. While this list includes a selection of the most well-known and popular stocks, it doesn't include every stock available.

What ETFs track the solar energy category?

There’s only one exchange-traded fund solely focused on the solar energy category: the Invesco Solar ETF (TAN).

Outside this, you can invest in renewable energy ETFs that contain solar stocks, but be aware that these ETFs also track a number of other companies in the renewable energy category, including wind and hydroelectric energy.

  • ALPS Clean Energy ETF (ACES)
  • First Trust ISE Global Wind Energy Index Fund (FAN)
  • First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID)
  • Global X YieldCo & Renewable Energy Income ETF (YLCO)
  • Invesco Cleantech ETF (PZD)
  • Invesco Global Clean Energy ETF (PBD)
  • Invesco Solar ETF (TAN)
  • iShares Global Clean Energy ETF (ICLN)
  • SPDR S&P Kensho Clean Power ETF (CNRG)

Compare trading platforms

To invest in solar energy, you’ll need a brokerage account. Review your options below.

Name Product Asset types Option trade fee Annual fee Signup bonus
Robinhood
Robinhood
Stocks, Options, ETFs, Cryptocurrency
$0
0%
Free stock (chosen randomly with a value anywhere between $2.50 and $200)
Sign up using the "go to site" link
Make unlimited commission-free trades in stocks, funds, and options with Robinhood Financial.
Go to site
More Info
J.P. Morgan Self-Directed Investing
J.P. Morgan Self-Directed Investing
Stocks, Bonds, Options, Mutual funds, ETFs
$0 + $0.65/contract
0%
N/A
INVESTMENT AND INSURANCE PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
Go to site
More Info
Sofi Invest
Sofi Invest
Stocks, ETFs, Cryptocurrency
N/A
0%
Get one free stock worth up to $1,000
Open an account
A free way to invest in stocks, ETFs and crypto.
Go to site
More Info
Vanguard Personal Advisor
Vanguard Personal Advisor
Stocks, Options, Mutual funds, ETFs
N/A
$20 per year
N/A
Financial advice powered by relationships, not commissions.
Go to site
More Info
TradeStation
TradeStation
Stocks, Bonds, Options, Mutual funds, ETFs, Cryptocurrency
$0 + $0.50/contract
$0 per month
$50
Deposit qualifying assets of $5,000+
A platform built for all kinds of traders and all styles of trading
Go to site
More Info
Moomoo
Moomoo
Stocks
$0
$0 per year
Get a free stock valued up to $350
Open your Futu brokerage account via Moomoo
Trade stocks on the US, Hong Kong, Shanghai and Shenzhen markets.
Go to site
More Info
loading

Compare up to 4 providers

*Signup bonus information updated weekly.

Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.

Bottom line

Solar energy offers investors a socially conscious investment opportunity with long-term growth potential. But until the technology becomes more widespread, the high cost to consumers may impede profitability.

Explore your brokerage account options with multiple platforms to find the account best suited to your investment needs.

Frequently asked questions

More guides on Finder

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and finder.com Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site