Solar and Wind to Generate a Third of Global Electricity by 2030

Solar and wind power generation is expected to triple by 2030, according to a report by the Rocky Mountain Institute. This significant growth is set to disrupt the global electricity sector and presents a promising opportunity for renewable energy investors.

“The fossil fuel era is over,” states the report published by RMI. It predicts that solar and wind generation will triple by 2030, surpassing 14,000 terawatt hours (TWh) and overtaking fossil fuel supply if growth accelerates even further. The cost of solar energy, which is already the cheapest energy source in history, is also anticipated to halve by 2030, continuing the downward trajectory of solar and wind energy costs.

In the first half of 2023, the levelized cost of energy (LCOE) for solar and wind was approximately $40 per mega-watt hour, which is about half the cost of coal and gas. This demonstrates the increasing competitiveness of renewable energy sources.

Taking into account this growth in solar and wind energy production, CNBC Pro analyzed companies that are well-positioned to benefit from this trend. The selected companies met certain criteria, including obtaining a buy rating from 60% or more analysts, having at least 30% upside to the average price target, and being listed on the New York Stock Exchange or Nasdaq.

One such company is Sunrun, which has the potential for its shares to surge more than 77% based on the average price target. Analyst Andrew Percoco from Morgan Stanley has a positive outlook on Sunrun’s residential rooftop offering, Sunrun Shift, which has generated positive demand. Around 64% of analysts covering the stock have issued a buy rating.

Other residential solar companies identified include Sunnova and Maxeon Solar Technologies. Percoco expects Sunnova’s customer growth to remain strong and for the company to continue gaining market share, despite slight downside in earnings and profit estimates for the second quarter. The consensus price target suggests that Sunnova’s shares could surge nearly 63%.

Maxeon Solar Technologies, which has seen a 68% increase in its shares in 2023, could experience another 50% jump based on the average price target. The decline in solar panel market prices may impact the company’s margins in 2024; however, Percoco notes that Maxeon has secured pricing for the rest of 2023 and has a niche market with its premium DG (distributed generation) product.

Several other stocks were highlighted as potential investment opportunities, including Array Technologies, SolarEdge Technologies, and Enphase Energy.

It is important to note that while this report presents an optimistic outlook for solar and wind energy, factors such as policy changes, market fluctuations, and technological advancements can influence the renewable energy landscape. Investors should conduct thorough research and consider their risk tolerance before making investment decisions.

In conclusion, solar and wind power are projected to contribute significantly to global electricity generation by 2030. The declining costs of these renewable energy sources, coupled with their environmental benefits, make them attractive investment options. However, as with any investment, careful consideration and analysis are crucial.

Daniel Hall