Clean energy stocks are expected to see continued growth. According to the U.S. Energy Information Administration, U.S. power generation from new renewables (primarily wind and solar) is expected to reduce coal and natural gas-fired energy production through 2024 at least. This pivot away from fossil fuel energy is a strong signal to investors that clean energy will continue to be a focal point for capital inflows.
Wind and solar alone are expected to account for 16% of total energy production in 2023. Solar, of course, has grown at a tremendous pace.
The good news for investors is that growth is expected to continue, with clean energy capacity expected to increase 84% through 2024. In short, these metrics continue to send a strong, clear message to investors – clean energy stocks represent an excellent investment opportunity moving forward.
Here are seven such clean energy stocks I think are worth buying right now.
American Superconductor (AMSC)
American Superconductor (NASDAQ:AMSC) stock, with its $4.11 share price, is going to be an appealing pick for budget-conscious investors. The company helps wind turbine manufacturers produce turbines quicker, and provides grid engineering services to optimize network operations. ASMC’s low price offers high upside potential, as evidenced by the consensus analyst buy rating and $10 average target price on this stock. In short, there’s a lot to like.
American Superconductor isn’t without risk, to be sure. Its overall revenues decreased on a quarterly and yearly basis when it last reported earnings. Further, its net losses increased, as operating costs rose higher. Generally-speaking, those are reasons to avoid a stock.
However, there’s reason to be contrarian here. Wind revenues increased by 75.6% in the latest quarter. And American Superconductor continues to diversify its business into other sectors including semiconductors, mining and materials, and defense.
The company is also a relatively smaller player in this high-growth space. Thus, AMSC has room to pivot, or average its rapid growth by diversifying into other verticals, as the sector takes off in 2023.
Clearway Energy (CWEN)
Clearway Energy (NYSE:CWEN) is one of the largest owners of wind and solar assets in the U.S. As mentioned at the beginning of this article, wind and solar continue to be particularly strong growth areas within the clean energy sector. That suggests Clearway Energy will continue to pique investor interest throughout 2023, making it an exciting stock to watch.
Clearway Energy isn’t a pure-play renewable stock, however. Its asset portfolio contains 8 gigawatts of overall energy production, 5.7 gigawatts of which is wind, solar, and energy storage. The company notes that those assets offset more than 10.5 million metric tons of carbon emissions currently.
Fundamentally, Clearway Energy is performing well. Revenues have been flat over the past three years, generally not an encouraging sign. However, Clearway Energy sold its thermal business, leading to more than $1.3 billion in capital raised. That has allowed the company to invest even more heavily into solar assets. In Q4, the company committed to adding 463 megawatts of solar storage projects. Further, it increased dividends by 2%.
Transalta Corp. (TAC)
Transalta Corp. (NYSE:TAC) is an Alberta-based electric utilities firm involved in accelerating the shift toward clean energy production and transmission. It currently distributes a mix of wind, solar, gas, and coal-generated power. Those facilities exist in Canada, the U.S., and Australia.
Transalta had a strong 2022, with particularly strong momentum in Q4 and heading into 2023. Full-year adjusted EBITDA increased by 27%, to $1.63 billion. And free cash flows reached $961 million, up 64% during the period.
The greater a firm’s free cash flows, the greater its ability to spend freely. As mentioned, those metrics improved more rapidly in Q4. Adjusted EBITDA grew by 123% in Q4 alone. Meanwhile, its free cash flow of $315 million represented a 303% increase in the fourth quarter on a year-over-year basis.
Those results exceeded the top end of the company’s overall 2022 guidance. With strong Q4 momentum, it’s easy to see why the Canadian utility represents a reasonable investment currently.
Infrastructure is a vital component of the clean energy transition. So, companies like MasTec (NYSE:MTZ) that build that infrastructure will remain on stock investors’ radars. MasTec provides infrastructure construction services across the communications, oil and gas, and clean energy sectors. Thus, this company provides investors with a diversified option to key infrastructure, that includes renewables.
MasTec acquired Infrastructure and Energy Alternatives in October of 2022. This deal provides investors plenty to be optimistic about, particularly in terms of the company’s growth prospects for 2023. MasTec has given guidance that revenues can be expected to increase roughly 33% to $13 billion. It also anticipates EBITDA to increase between 40.85% and 47.3%.
The future does look bright in several respects. The company reduced its net debt as a result of the Infrastructure and Energy Alternatives acquisition. And it has a clear opportunity to reach those revenue guidance figures due to a $13 billion backlog of business as of Dec. 31. All the company has to do is fulfill those contractual obligations, and its share price should increase in an orderly fashion.
Array Technologies (ARRY)
Array Technologies (NASDAQ:ARRY) produces the ground mounting systems that allow solar energy arrays to operate efficiently. Those ground mounting systems track the sun’s movement, maximizing energy production for solar operators. That makes its stock an interesting proposition, as solar growth strengthens.
Array Technologies is almost certain to continue its growth trajectory throughout 2023. As the U.S. Energy Information Administration noted above, solar capacity is expected to increase 84% through 2024. Tracker demand is expected to outpace overall solar growth by 36% according to Array. In short, solar trackers are a sector champion within an already strong sector.
Array Technologies’ tracker technology is patented, and boasts a 25% increase in energy with an 11% increase in costs. That math is likely to remain favorable for companies erecting solar arrays everywhere. That should be especially true across U.S., Brazil, Spain, and other Latin American markets where the company maintains a top-3 position.
Emeren Group (SOL)
Emeren Group (NYSE:SOL) is developing a 3-gigawatt pipeline of solar projects across Europe, North America, and Asia. Readers may already be aware of Emeren Group by its former name, ReneSola. The company rebranded early in 2023 with its new name denoting its goal of empowering renewables.
By either name, Emeren Group is a fast-growing company within the solar industry. Revenues grew 86% to $28.9 million in the third quarter. Not only are those results impressive on an absolute basis, but they also exceeded the high end of guidance. Those Q3 revenues were perhaps even more impressive when stacked against the $8.2 million in sales a quarter earlier. Any company that can grow 252% sequentially, while providing $3 million in net income, is worth considering.
Emeren Group did all of that despite a strong dollar and a portfolio that derives 77% of revenues internationally. In short, the repatriation of those revenues into USD was a significant headwind for the company.
This stock is performing very well, despite its significant hurdles.
Albemarle (NYSE:ALB) stock gets a lot of attention for its connection to the rapidly growing EV industry. Lithium producers like Albemarle saw their prices rocket upward in 2022 as strong demand and short supply factors converged to spike prices. The rush to secure supply meant that lithium producers’ share prices quickly rose higher.
That rush is reflected in Albemarle’s earnings. Sales increased 193% in the fourth quarter, reaching $2.6 billion. That translated into earnings per share of $8.62, up a whopping 753% year-over-year. Notably, EBITDA also increased by 444%. The numbers go on and on, but the general theme is the same. This is a company with amazing secular tailwinds that’s finally seeing the sort of top- and bottom-line growth investors thought was possible.
Albemarle will deal with commodity prices as either a constraining factor or an advantage moving forward. Fortunately for Albemarle, the outlook is more bullish. Several experts anticipate the gap between demand and supply could actually widen in 2023. With ALB stock down materially of late, I think investors now have a strong entry point to consider this stock.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.