Can solar stocks still be invested in? Analysis of the leader in solar concept stocks in 2025.

Is it worth investing in solar concept stocks in 2025? This article will delve into the future potential of solar stocks, interpreting market trends and the driving factors behind them. We will select several leader solar companies from the US and Taiwan stock markets, which play a key role in the global energy transition process. We will analyze the investment prospects of these leader stocks for readers from both fundamental and technical perspectives.

As people become increasingly concerned about global warming and carbon emissions, the demand for green, clean, renewable energy continues to grow in various countries. Compared to other green energy sources such as wind energy, solar energy has the following advantages:

Solar energy resources are abundant and widely distributed. After installation, operational costs are low and maintenance is simple. From an industrial perspective, solar technology has made significant progress in recent years, with costs decreasing year by year, making it suitable for various scenarios, from households to large photovoltaic power stations.

However, the development of the solar energy industry also faces many challenges, including policy changes, intensified market competition, and rapid technological iteration.

Analysis of Leading Stocks in the US Solar Panel Sector

The solar energy market in the United States has shown significant growth in recent years. The U.S. Energy Information Administration (EIA) predicts that the cumulative installed capacity of solar photovoltaics across the country will reach 182 GW by 2026. Among them, Texas is expected to lead all states with an annual addition of 11.6 GW of installed capacity by 2025. The federal government’s Inflation Reduction Act has provided considerable tax incentives for businesses and households, further stimulating investment in solar systems. Against this backdrop, several companies have grown into industry leaders, which we will introduce one by one.

First Solar

First Solar was founded in 1999 and is headquartered in Arizona, one of the states in the United States with the longest sunshine hours. The company focuses on the production and sale of solar photovoltaic modules and components, known for its efficient thin-film photovoltaic technology. In 2006, First Solar went public on NASDAQ under the stock ticker FSLR. In recent years, the company has continued to expand its production capacity, reduce manufacturing costs, and advance large-scale photovoltaic power station projects globally.

First Solar's core advantage lies in its proprietary advanced thin-film module technology. Under non-ideal conditions such as low light and high temperatures, its module performance significantly outperforms traditional silicon-based modules. Their modules are larger, further reducing the cost per watt, making them an ideal choice for utility-scale solar projects.

As a leading solar panel manufacturer in the United States, First Solar not only enjoys the policy benefits of the Inflation Reduction Act ( IRA ), but also has signed long-term supply contracts with several American utility companies, while benefiting from government support for domestic manufacturing and tariff protection for imported photovoltaic components.

Analysts predict that under the baseline scenario, if the company's revenue remains stable or achieves an annual growth of about 5%, while the profit margin remains at the current level, earnings per share are expected to stabilize at around $8. Based on a price-to-earnings ratio of 22-25 times, the reasonable valuation range should be $175-200, indicating there is still room for price appreciation compared to the current stock price.

According to the 12-month price target forecasts from 26 Wall Street analysts over the past three months, the average target price for First Solar is $210.12. The highest forecast is $275.00, while the lowest forecast is $157.00. This average target price represents a potential upside of 26.31% compared to the current stock price of $166.35.

Nextracker

Nextracker focuses on providing smart tracking systems for utility-scale solar power plants. Its innovative solutions maximize solar energy capture by dynamically adjusting the orientation of photovoltaic panels, significantly enhancing power generation efficiency and optimizing project economic benefits.

Nextracker is one of the standout solar concept stocks in recent times. After the latest quarterly earnings report on May 15 significantly exceeded analysts' expectations, Nextracker's stock price surged nearly 12%, and it has maintained a high price since then.

The company attributes its strong performance in the first quarter to robust global demand for solar solutions and stated that it will continue to maintain this momentum. Founder and CEO Dan Shugar emphasized, “The current performance not only lays the foundation for the company's continued growth this year but also ensures ongoing investment in key strategic initiatives.”

According to the 12-month price target forecast from 18 Wall Street analysts over the past three months, Nextracker's average target price is $63.94, with the highest forecast reaching $71.00 and the lowest forecast at $52.00. This average target price has an upside potential of 12.33% compared to the current stock price of $56.92.

Enphase Energy

Enphase Energy was founded in 2006 and is headquartered in California, which has the second highest annual sunlight hours in the United States after Arizona. The company focuses on designing and manufacturing solar microinverter systems to enhance the conversion efficiency of solar panels.

In 2009, the company launched its first microinverter, quickly establishing a foothold in the market. In 2012, Enphase went public on NASDAQ under the ticker symbol ENPH. In recent years, Enphase's business has gradually expanded into the energy storage and management software sectors, aiming to provide comprehensive residential energy solutions.

Recently, affected by the China-US tariff war, Enphase's stock price performance has been relatively sluggish. Enphase's battery supply chain has long been highly dependent on China. According to the company's estimates, currently 95% of the lithium iron phosphate (LFP) battery cells come from Chinese suppliers.

In the short term, the company expects to absorb most of the tariff impact, passing on only a small amount of additional costs to customers. The gross margin is expected to be pressured by 200 basis points in the second quarter of 2025, and the impact will expand to 600-800 basis points by the third quarter.

However, this impact will be temporary. Enphase is actively promoting the diversification of battery cell supply, and it is expected that by the second quarter of 2026, the vast majority of its battery supply will shift to non-China sources.

According to the 12-month price target forecasts given by 25 Wall Street analysts for Enphase Energy(ENPH) over the past three months, the average target price is $50.82. Among these, the highest forecast reaches $84.00, while the lowest is $31.11. This average target price indicates a potential upside of 23.41% compared to the current stock price of $41.18.

Analysis of the Leader Stocks in the Taiwan Solar Panel Sector

Delta Electronics

Delta Electronics' 2024 operational performance is solid, with a consolidated revenue of NT$421.1 billion for the year, a year-on-year increase of 5%; profitability remains impressive, with a gross margin maintaining a high level of 32.4%, net income after tax of NT$35.2 billion, a net profit margin of 8.4%, earnings per share (EPS) at NT$13.56, maintaining positive growth rate, and return on equity (ROE) remaining excellently at 16.4%. All financial indicators show a stable growth trend.

Recently, Morgan Stanley released a research report, significantly raising Delta Electronics' target price from NT$440 to NT$485, while maintaining an “overweight” rating, with a focus on the company's technological breakthroughs in AI data centers and industrial areas with 800V high voltage direct current (HVDC) power solutions.

Morgan Stanley stated that as global demand for high-end power supplies continues to heat up across various industries, Delta Electronics will continue to benefit, with growth momentum expected to extend until 2027.

Zhongxing Electric

In 2024, the performance of Zhongxing Electric has attracted the attention of investors, with a net profit after tax reaching NT$3.623 billion for the year, a significant increase of 128% compared to the same period last year, setting a historical high, and an EPS of NT$7.33 also breaking records.

In the first quarter of 2025, benefiting from the continued release of orders from the Taipower resilient grid project, ZTE's revenue reached 6.448 billion yuan, setting a new high for the same period. However, due to the increased proportion of the engineering business with lower gross margins, EPS fell from 1.93 yuan in the same period last year to 1.78 yuan, still setting the second-highest record for the same period.

According to the latest survey by FactSet, the median target price valuation set by six analysts for ZTE has been upgraded from 182.5 yuan to 195.5 yuan, an increase of 7.12%. The highest valuation is 211 yuan, and the lowest valuation is 167 yuan.

Review of the Development History of the Solar Energy Industry

The origin of the solar energy industry can be traced back to France in the 19th century, when Edmond Becquerel first discovered the photovoltaic effect in 1839, laying the theoretical foundation for solar power generation.

It wasn't until 1954 that Bell Labs developed the first practical silicon-based photovoltaic cell, marking the true entry of solar technology into the practical stage. This type of cell had a conversion efficiency of only 6%, far less than today's photovoltaic cells, but it signified the beginning of solar technology's actual application era.

In the 1960s, the rapid advancement of the American space program promoted the swift development of solar energy technology. The National Aeronautics and Space Administration ( NASA ) used solar cells as a key component for powering satellites.

In the 1970s, geopolitical conflicts that triggered energy crises indirectly spurred a surge in global demand for alternative energy, leading to increased attention and investment in the solar energy sector. However, at that time, the cost of photovoltaic cells remained very high, and it wasn't until the 1990s, with technological advancements and expanded production scales, that the cost of photovoltaic cells began to gradually decline.

After entering the 21st century, the solar energy industry has experienced explosive growth. China has become the world's largest producer and consumer of solar energy, with large-scale capital investment and policy support leading to a significant drop in the cost of solar technology. By 2021, according to data from the International Energy Agency (IEA), renewable energy sources such as solar and wind energy have become the most economical sources of electricity in many regions around the world, with a broad outlook for the renewable energy market.

Historical Trend Review of Solar Energy Concept Stocks

The historical fluctuations in stock prices of the solar energy industry reflect the development opportunities and challenges faced by the entire renewable energy market at different stages. The Invesco Solar ETF ( code: TAN ), as one of the most representative solar-themed ETFs, its price changes precisely illustrate the changes experienced by the solar sector over the past decade.

2008 to 2009

The timing of TAN's launch coincides with the peak of the investment boom in the solar energy industry. There is a general consensus in the market to reduce reliance on fossil fuels, and governments around the world have introduced industry support policies, including subsidies and incentives for renewable energy. Many renewable energy companies have emerged, attracting substantial investments. However, with the outbreak of the 2008 financial crisis, the global economy fell into recession, and China's photovoltaic industry began exporting photovoltaic components to the international market at highly competitive prices, leading to the bursting of the industry bubble and a significant drop in the stock prices of major companies.

2010s

Significant advancements have been made in solar technology, particularly with improvements in photovoltaic cell efficiency and reductions in production costs, making solar power generation more economical. However, at this stage, the market faces challenges such as frequent policy changes and intensified competition. For example, in 2011, due to severe overcapacity in China's photovoltaic production, the United States imposed anti-dumping measures on photovoltaic products imported from China, leading to price fluctuations of TAN. In the mid to late 2010s, as global attention to climate change issues increased, countries and companies committed to reducing carbon emissions and transitioning to renewable energy. This shift has driven rapid growth in the solar industry, and TAN prices began to stabilize and gradually recover.

after 2020

The outbreak of the COVID-19 pandemic in early 2020 had a severe impact on the global economy, but as vaccines were rolled out, economies in various countries gradually recovered. Additionally, the global demand for clean energy continues to grow, with advancements in solar technology and decreasing costs providing new growth momentum for the industry. Data from Gate.io shows that solar concept stocks performed strongly during this period, reflecting the market's confidence in the long-term development prospects of the industry.