The U.S. is investing billions into clean-energy innovations, and five key players stick out to possibly become profitable in clean energy, which can be good investment choices.
- Clean-energy sources, including wind, solar, and hydroelectric power, currently supply around 20% of the electricity generated by the power sector.
- Last year’s Inflation Reduction Act pegged $370 billion in clean-energy initiatives. To date, there have been 76 new announcements of clean-energy projects, with 40 specifying exact dollar amounts totaling $77 billion, according to Credit Suisse.
- Despite the billions in funding rapidly increasing, it is difficult to make money on clean-energy stocks, but five stand out as good contenders to invest in and profit from in the future.
- The five stocks taking off in the clean-energy sector, according to info from Barron’s…
- Glass and solar-material maker Corning
- Solar-equipment company Enphase Energy
- Biofuels producer Neste
- Energy-efficiency company Schneider Electric
- Battery maker Freyr Battery
why it’s news
The U.S. has been rapidly investing billions into clean-energy initiatives to decarbonize the country, but despite the billions flooding the sector many investors have found it challenging to make a profit off clean energy stocks.
Many investors view clean energy as suitable long-term investments as they are not making money immediately, but expect to in the future as the stocks continue to grow and increase funding.
Information from Barron’s has listed five clean-energy stocks that have specified certain clean energy areas that could help turn a profit and be a good investment, despite the growing pressure of the sector.
Corning, which makes glass for TVs and cars, has also been growing into a solar powerhouse. The company creates polysilicon at a Michigan factory with a majority stake.
Polysilicon has been scarce in production in the U.S., and since the company began producing the product again last year, it has seen a heavy increase in orders for the product making the company a good investment.
Enphase Energy is another company that would make good investments as the company creates high-tech solar components known as inverters and sells batteries to residential solar customers.
In an industry with little differentiation and low margins, Enphase stands out for solid profitability and 40%-plus gross margins, according to Barron’s. Enphase is building factories in the U.S. to boost internal production, and profits look to only go up from there.
“Our installers have been asking for Made in America products,” says Enphase CEO Badri Kothandaraman. “They would like to sell a Made in America product to the homeowners who don’t want to buy something that is made in China.”
Neste is a company that has found its spot on the list with an impressive feat—renewable diesel. The Finnish company has found a way to take animal fats and vegetable oils and turn them into renewable diesel that can be used in the typical diesel engine.
The company has also created sustainable jet fuel, which can be added to jet fuel to help save energy and emit less carbon.
Schneider Electric makes standard electrical equipment but has recently been creating products to manage electric grids, which is important as the U.S. continues to shift toward electric products.
The last company listed is Freyr battery, which focuses on energy storage, allowing energy companies with solar and wind to store their energy when the sun is not out, and the wind is not blowing.
Energy storage is not a popular topic, but as more businesses switch to renewable resources, energy storage will be a greater need, and many investors think Freyr’s stock will see an increase in the future.
As money continues to be invested into clean energy through the Inflation Reduction Act, more renewable energy businesses will see a boom in investment, and clean energy will continue to rise.