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Coal Usage in Electricity to Plunge 18% in 2H23: Stocks to Buy
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So far, coal has suffered the biggest decline as a power generation source in 2023, in the United States, as per the U.S. Energy Information Administration’s (EIA) latest Short-term Energy Outlook, published on Jul 11. This plunge has been primarily driven by steady retirements observed in coal-fired plants, as the entire nation is transitioning toward a net-zero carbon emission environment.
As America continues to rapidly adopt clean energy as its preferred choice of electricity generation resource, EIA projects 18% less U.S. coal-fired generation during second-half 2023 compared with the second half of 2022. Since a major portion of this decline will be largely replaced by higher usage of solar and wind, the spotlight is now on renewable stocks like Fluence Energy (FLNC - Free Report) , Constellation Energy (CEG - Free Report) and Maxeon Solar Technologies (MAXN - Free Report) .
What’s Driving the Renewables Boom?
The urge to fight climate change acts as the primary catalyst in driving the increasing adoption of renewable sources in the United States. Other factors like declining costs and favorable government support have also been encouraging more installation activity in the U.S. renewable energy market. Per the U.S. Department of Energy, the average installed cost of wind projects in 2021 was $1,500/kW, down more than 40% since the peak in 2010, thanks to declining wind turbine prices.
The historic Inflation Reduction Act, passed by the U.S. Senate last August, is expected to be another major growth driver for the U.S. solar industry. As part of this Act, the U.S. solar industry will have access to production tax credits and an investment tax credit for domestic manufacturing across the solar value chain for the first time.
The solid growth potential of the U.S. renewable energy market has also attracted investments over the past few years, thereby bolstering installation activities significantly. Per a report by the U.S. International Trade Administration, annual investment in renewable energy in the country grew from $29.4 billion to more than $55.4 billion during 2010-2019.
The rapidly increasing clean energy adoption is also providing an edge for alternative energy companies to expand their footprint in the battery energy storage market. Per a Wood Mackenzie report, the aforementioned market is expected to install almost 75 GW between 2023 and 2027. Therefore, the booming energy storage industry has also been boosting the renewables market prospect.
Stocks to Buy
The abovementioned factors must have led EIA to expect renewables to contribute 23% to U.S. electricity generation in 2023, up from 22% in 2022. This should encourage investors to choose the following stocks.
Fluence Energy is a global market leader in energy storage products and services and cloud-based software for renewables and storage assets. In March 2023, the company launched the Ultrastack energy storage product, which unlocks the power of battery-based energy storage for transmission network owners and operators. Ultrastack also offers more than 99% system uptime to meet the high asset availability requirements of critical infrastructure.
The Zacks Consensus Estimate for Fluence Energy’s 2023 sales indicates growth of 64.1% from the prior-year reported figure. The company’s shares have returned 71.2% in the past year. It currently holds a Zacks Rank #2 (Buy).
Constellation Energy is the nation’s largest producer of carbon-free energy and provides sustainable solutions to homes, businesses and public-sector customers across the continental United States. It owns and operates one of the nation's largest solar power facilities, with a total capacity of 242 megawatts (MW). Moreover, the company operates 27 wind projects across 10 states that are capable of producing about 1,400 MW of electricity, of which about 750 MW is Constellation-owned. Co
Maxeon Solar Technologies designs, manufactures and sells solar panels under the SunPower brand name. Its first-quarter 2023 shipments of solar panels increased a solid 58.6% year over year. The company expects to ship 860-900 MW of its panels in the second quarter of 2023, indicating annual growth of 65.1-72.7%.
The Zacks Consensus Estimate for MAXN’s 2023 sales indicates growth of 41.7% from the prior-year reported figure. The company’s shares have returned 150% in the past year. It holds a Zacks Rank #2 at present.
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Coal Usage in Electricity to Plunge 18% in 2H23: Stocks to Buy
So far, coal has suffered the biggest decline as a power generation source in 2023, in the United States, as per the U.S. Energy Information Administration’s (EIA) latest Short-term Energy Outlook, published on Jul 11. This plunge has been primarily driven by steady retirements observed in coal-fired plants, as the entire nation is transitioning toward a net-zero carbon emission environment.
As America continues to rapidly adopt clean energy as its preferred choice of electricity generation resource, EIA projects 18% less U.S. coal-fired generation during second-half 2023 compared with the second half of 2022. Since a major portion of this decline will be largely replaced by higher usage of solar and wind, the spotlight is now on renewable stocks like Fluence Energy (FLNC - Free Report) , Constellation Energy (CEG - Free Report) and Maxeon Solar Technologies (MAXN - Free Report) .
What’s Driving the Renewables Boom?
The urge to fight climate change acts as the primary catalyst in driving the increasing adoption of renewable sources in the United States. Other factors like declining costs and favorable government support have also been encouraging more installation activity in the U.S. renewable energy market. Per the U.S. Department of Energy, the average installed cost of wind projects in 2021 was $1,500/kW, down more than 40% since the peak in 2010, thanks to declining wind turbine prices.
The historic Inflation Reduction Act, passed by the U.S. Senate last August, is expected to be another major growth driver for the U.S. solar industry. As part of this Act, the U.S. solar industry will have access to production tax credits and an investment tax credit for domestic manufacturing across the solar value chain for the first time.
The solid growth potential of the U.S. renewable energy market has also attracted investments over the past few years, thereby bolstering installation activities significantly. Per a report by the U.S. International Trade Administration, annual investment in renewable energy in the country grew from $29.4 billion to more than $55.4 billion during 2010-2019.
The rapidly increasing clean energy adoption is also providing an edge for alternative energy companies to expand their footprint in the battery energy storage market. Per a Wood Mackenzie report, the aforementioned market is expected to install almost 75 GW between 2023 and 2027. Therefore, the booming energy storage industry has also been boosting the renewables market prospect.
Stocks to Buy
The abovementioned factors must have led EIA to expect renewables to contribute 23% to U.S. electricity generation in 2023, up from 22% in 2022. This should encourage investors to choose the following stocks.
Fluence Energy is a global market leader in energy storage products and services and cloud-based software for renewables and storage assets. In March 2023, the company launched the Ultrastack energy storage product, which unlocks the power of battery-based energy storage for transmission network owners and operators. Ultrastack also offers more than 99% system uptime to meet the high asset availability requirements of critical infrastructure.
The Zacks Consensus Estimate for Fluence Energy’s 2023 sales indicates growth of 64.1% from the prior-year reported figure. The company’s shares have returned 71.2% in the past year. It currently holds a Zacks Rank #2 (Buy).
Constellation Energy is the nation’s largest producer of carbon-free energy and provides sustainable solutions to homes, businesses and public-sector customers across the continental United States. It owns and operates one of the nation's largest solar power facilities, with a total capacity of 242 megawatts (MW). Moreover, the company operates 27 wind projects across 10 states that are capable of producing about 1,400 MW of electricity, of which about 750 MW is Constellation-owned. Co
CEG boasts a long-term earnings growth rate of 30.5%. Its shares have returned 71.2% in the past year. The stock holds a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Maxeon Solar Technologies designs, manufactures and sells solar panels under the SunPower brand name. Its first-quarter 2023 shipments of solar panels increased a solid 58.6% year over year. The company expects to ship 860-900 MW of its panels in the second quarter of 2023, indicating annual growth of 65.1-72.7%.
The Zacks Consensus Estimate for MAXN’s 2023 sales indicates growth of 41.7% from the prior-year reported figure. The company’s shares have returned 150% in the past year. It holds a Zacks Rank #2 at present.