The entire world is now moving towards cleaner sources of energy. More and more businesses are ditching fossil-based energy for renewable energy sources, brought about by the need to reduce the impact of climate change.
Using clean energy, otherwise known as green energy, has become a goal of most business leaders. A total global shift from fossil fuel to renewable energy is estimated to take about 3 decades and require trillions of dollars in investment (assuming everyone starts right now).
This has made energy storage stocks rise as investors are also looking for safer ways of getting returns.
Table of Contents
- What are Energy Storage Stocks?
- What We Considered When Choosing the Best Energy Storage Stocks for This Year
- Stock Value
- Growth Rate
- Return History
- Carbon Footprint
- Best Energy Storage Stocks to Buy
- 1. Tesla Motors
- 2. NextEra Energy
- 3. Brookfield Renewable
- 4. Enphase Energy
- 5. Albemarle
- 6. SolarEdge Technologies
- 7. Clearway Energy
- 8. ON Semiconductor Corporation
- 9. NIO
- 10. AES Corporation
- 11. ABB LTD
- 12. Stem
What are Energy Storage Stocks?
Energy storage stocks are companies that design and manufacture energy storage technologies. These include battery storage, capacitors, and flywheels.
For example, you get solar energy during the day, but you also need to use it at night when you can generate none. Wind power is equally unpredictable.
Then there’s the issue of creating more energy than required (for those lucky enough). for example, in particularly sunny areas, solar farms or household panels may harvest more energy from the sun’s rays than needs to be used – so you gotta store that energy lest it goes to waste.
There is a high demand for energy storage systems as the need for renewable energy rises. The renewable energy sector has many players involved at different stages of energy production. They include the following:
- Manufacturing of energy equipment and solar panels
- Installation of energy systems
- Operation of energy generating facilities.
But we will focus more on companies that offer energy storage solutions.
What We Considered When Choosing the Best Energy Storage Stocks for This Year
Identifying top energy storage stocks in an industry with many players can be challenging. However, we have done the bulk of the work for you. We have researched all possible options, considering the main factors that set energy storage stocks apart.
In our research, we considered the following:
Price-to-earnings ratio (P/E) is a primary factor that every investor should consider. We looked at different energy storage companies with low P/E. That means you will be paying less for every dollar of profit generated in these energy stocks.
The energy storage market is currently experiencing exponential growth, showing little signs of slowing. Any energy storage company worth investing in should keep up with this unprecedented growth. We used this factor to filter out some energy stocks that still lag behind or are not showing signs of growth.
We have to use the available data in the energy industry to know how various energy companies have performed. Revenue growth and returns were our main parameters when deciding which energy storage stock to list.
Every company, big and small, is trying to achieve carbon neutrality. We have considered the sustainability of different energy storage stocks before coming up with the list.
At least, they have a significant contribution to limiting carbon emissions.
Best Energy Storage Stocks to Buy
Finally, let us start the countdown of the best energy storage stocks to consider. From our research and hours of data analysis, we have come up with the following top energy companies:
1. Tesla Motors
Tesla may be known for its high-end vehicles, including its namesake electric cars. But it comes as the first energy storage stock on this list. Tesla is one of the biggest battery manufacturers globally – which may come as a bit of a surprise, right up until you remember all those cars need batteries.
Tesla relies on solar power to provide electricity to its many production facilities. It also uses rechargeable lithium-ion batteries to store excess solar energy and sell to homeowners and businesses.
Megapack is the revolutionary product that brought Tesla to the limelight. The demand for Tesla’s Megapack product is still rising exponentially, prompting the company to construct a new facility. This new plant only specializes in the manufacturing of Megapack to meet the demands.
Megapack is not the only energy storage product from Tesla but is by far the most successful. Tesla warrants its position as the best energy storage stock.
2. NextEra Energy
NextEra Energy is one of the big names to mention whenever you discuss clean energy. It is the largest operator of electric utilities in the United States. Florida & Light and NextEra Energy Resources are part of its family.
Overall, NextEra is one of the world’s leading renewable energy producers of solar and wind. It also has remarkable achievements in battery storage.
NextEra manages a vast network of wind, solar, and battery storage. These are all projected to expand more in the coming years. We expect to see these high investments to see the company grow to achieve its short and long-term goals.
The investment in NextEra will ensure continuous growth in dividends, as has already been seen this year. It is one of the fastest-growing energy storage stocks with a 10% growth figure, which is only expected to continue climbing in the coming years.
NextEra Energy, in itself, is a stable business with millions of shares in different U.S. exchange-traded funds. If you are looking for a future-proof energy storage stock, consider NextEra.
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3. Brookfield Renewable
Brookfield is an all-in-one producer of renewable energy, tapping power from all sources. According to the 2021 data, its total energy came from hydropower. It also operates successful onshore and offshore wind power and utility-scale and rooftop solar. Its specialization in energy storage is also worth mentioning.
Brookfield sells most generated energy under a long-term power purchase agreement (PPA). This ensures a predictable cash flow.
Brookfield has an estimated annual return of about 20%. The company has invested heavily in its growth and developmental projects. These steps have resulted in a compounded annual growth in dividends payment of 6% since 2012.
Brookfield is projected to be one of the leading companies with the highest revenue growth by 2025. The value is estimated to rise by 20%, while dividends will hike to 9%. These are attractive figures that should attract the attention of any investor.
By considering all development projects and milestones, Brookfield is one of the most lucrative energy storage stocks. You can consider investing in.
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4. Enphase Energy
Enphase Energy offers renewable energy storage solutions to homeowners and companies. It is one of the world’s leading manufacturers of micro-converters-based solar storage systems. Enphase Energy’s technology combines solar generation, storage, and energy management into one intelligent system.
Its contribution to clean energy production and storage is immense. Enphase Energy recently partnered with Semper Solaris, an industry leader in home solar and battery storage systems.
The joint venture between the two giant companies is set to revolutionize the clean energy supply in California. A proper procedure is underway to introduce IQ Microinverters and IQ Batteries.
These are the efforts of Enphase Energy to expand its micro-inverter solar and battery market in the United States. One such late development is the installation of home energy systems in Arizona. These bold steps will see the company doubling its deployment in the coming years.
The investments and developments by Enphase have significantly improved its stock market value. It is currently on the radar of different investors as a potential future-proof energy storage stock.
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Albemarle is a global leader in lithium-ion energy storage batteries. We have it on this list because of the tremendous increase in the use of electric vehicles worldwide.
There has been a retarded growth in the past decade because the right technology for electrical power storage was in its infancy. Today, Albemarle is determined to change the story.
Albemarle has reported tremendous revenue growth and earnings in its fourth quarter. However, it has also experienced a setback in stock that does not conform with the projections. This can be a prime opportunity to buy the best clean energy storage stocks.
Albemarle is a future-proof energy storage stock because it shifts with the advancement of technology. People are moving away from flooded gel energy storage batteries.
Lithium-based batteries have high energy storage capacities and keep the overall weight low. In fact, they are many times lighter than others. That makes them the best choice for EVs and will soon be driving the automotive industry.
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6. SolarEdge Technologies
SolarEdge introduced a new technology that enhances power conversion efficiency and reduces the cost of renewable energy equipment. The company manufactures optimizers and inverters for converting DC solar power to AC. These are used for feeding into the grid.
Solar project developers worldwide focus on cost minimization for their projects. That is the area that SolarEdge has tapped. With its cost-effective and highly efficient systems, SolarEdge will continue to increase its customers’ portfolio.
The company has invested in manufacturing products that meet the needs of clients. By using this opportunity, SolarEdge will significantly increase its revenue.
SolarEdge has also found a way of staying ahead of its competitors. It boasts financial flexibility that allows the company to invest in expanding its production facilities to meet the ever-growing demand.
The newest acquisitions of SolarEdge cover energy storage, EV charging, storage batteries, UPS systems, etc. The ever-expanding SolarEdge activities allow you to invest in a clean energy storage stock.
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7. Clearway Energy
You cannot mention renewable energy storage stocks without recognizing Clearway Energy. Clearway Energy is a leading company in the generation of renewable energy in the United States. Its facilities use wind, solar, and natural gas to ensure a steady supply of clean energy.
Clearway Energy sells some of its power through PPAs, bringing steady cash to the company. That has made it easy to expand and invest in other sectors. Over the years, Clearway Energy has created shareholder value.
The company has delivered a total annual return of about 10%. In fact, the figures have doubled since the new administration took over back in 2018.
The advantage of that is a constant investment opportunity on the way. If you want to invest in green energy, Clearway is undoubtedly worth considering.
Clearway Energy expanded its portfolio, cash flow, and dividend over a short period. And when others are predicting the growth to level, the company has kept rising exponentially. It currently targets a dividend growth of about 8% in the near future.
8. ON Semiconductor Corporation
ON Semiconductor Corporation is among the fortune 100 companies in the U.S. The company is famous in the energy industry as an unrivaled supplier of solar strings, industrial power, and storage systems. ON Semiconductor Corporation uses its technologies to provide intelligent power solutions.
Products that ON Semiconductor Corporation supplies have different applications in various industries. You can find them in the communication, automotive, computing, medical, and military sectors.
ON Semiconductor Corporation is an unparalleled chipmaker set to take the stock market by storm. It currently experiences high growth, considered abnormally high by most analysts. The company achieved a 28% revenue growth in 2021 compared to the previous year.
The stage is set, and momentum is high for ON Semiconductor Corporation. The company continues to soar high with a projected return in the next 10 years to have increased five times its current figure. It is one of the names to reckon with in the sustainable energy industry.
ON Semiconductor Corporation is worth considering as a very safe energy storage stock.
NIO is by no means a big name in the stock market but in the leading position if you narrow it down to the sustainable energy sector. This Chinese automobile company specializes in the design and manufacture of EVs. At the same, NIO wants to establish itself as the go-to company for luxury, battery-powered cars worldwide.
NIO is also expanding its operations by establishing a solar panel manufacturing facility. This will see its position rise with the company’s aim of making NIO a one-stop-shop renewable energy solution provider.
NIO is a relatively new player in the industry, but the stakes are high that it will be one of the big names on the international stage in the coming years.
The company estimates that they will get over 100,000 orders on their premium-grade EVs, which will see their shares taking an exponential rise. With the global market at its disposal, NIO will be a safe energy storage stock worth buying.
10. AES Corporation
AES Corporation comes near the bottom of our list but arguably should have taken the top spot. The company has been around for 30 years, is headquartered in Virginia, and operates in 15 countries globally.
AES Corporation provides energy storage systems to homeowners and business leaders worldwide. As one of the companies in the leading position, the company meets customer demands. By analyzing the performance of this AES over 12 months, it is likely to get a 25% increase in its operations.
AES has also expanded its portfolio by partnering with energy storage tech providers, Fluence as well as Google. This diverse portfolio makes it the right company if you are looking for energy storage stock to buy.
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11. ABB LTD
ABB LTD is among the top 50 companies known for reliable energy storage. You may not know this but ABB LTD is the largest electrical engineering corporation in the world. It operates in more than 100 countries globally.
ABB LTD offers automation technologies, robotics, and power grids. With this extensive product line, ABB tops the list of the most versatile energy storage stocks.
The market cap of ABB LTD totals about 68 billion dollars, but it has a high potential for high revenue growth. The demand for its products increased by about 18% YoY, which shows its potential that is yet to be unlocked.
Despite a few challenges in its operation, ABB LTD still managed a 5% growth in revenue. That was more than what was projected.
Stem offers AI-driven renewable energy storage solutions. The company designs, manufactures, and supplies smart batteries. These are needed for building more resilient energy grids. That is all it takes to reduce carbon footprint and negative environmental impact.
Stem’s newest development is the acquisition of AlsoEnergy, making it an all-in-one clean energy solution provider. Even before that, Stem had remarkable growth. Stem may seem like a new player in the industry, but it is one of the best energy storage stocks to include here.