Tesla Stock Has Surged But It’s Not the Top Alternative-Energy Performer

Tesla Inc Isn’t the Only Top Performer as Green Energy Stocks Rise

Investors could have made a million dollars if they had purchased 1,400 shares of Tesla Inc (NASDAQ:TSLA) at the 52-week low in June 2019. Driving the intense buying euphoria in Tesla stock was the company’s newfound ability to manufacture and deliver much higher numbers of its high-tech electric vehicles.

But while Tesla’s vehicles are clearly the focus of the company, the potential growth in its “Tesla Energy” unit was also a factor for the spike in TSLA stock.

Tesla has developed an innovative line of solar panels and solar roofs. Why not use the free energy of the sun to power your home? Makes sense to me.

Green energy, and specifically solar energy, is currently in vogue again, despite the U.S. government’s push for fossil fuels such as coal.

A solar cell, also known as a photovoltaic (PV) cell, is an electrical device that converts sunlight into electricity. The cost to produce PV cells has plummeted, which in turn has resulted in much cheaper solar panels.

No longer will the cost to install a solar energy system at your home or business be cost-prohibitive. This will provide a major tailwind for the green energy sector.

Why Solar Energy Will Power the Next Energy Revolution

The major catalyst for the global push toward alternative energy was the Paris Agreement, which entered into force in 2016. While the U.S. has pulled out of that climate change alliance, major countries, including China (a top solar player), Europe, Saudi Arabia, Africa, and India, have been aggressively supporting green energy.

Solar technologies will see massive growth over the next decade. We could see trillions of dollars in solar energy infrastructure.

Tesla sees this, which is why the company is pushing its under-appreciated solar unit. Tesla stock, at its current price of around $900.00, may actually be undervalued.

Chart courtesy of StockCharts.com

“The global energy transition is the transformation of the world’s energy supply, away from polluting sources such as coal, oil and gas, and towards renewables. We see this as a $120 trillion investment opportunity over the next 30 years,” said Mark Lacey, head of commodities at Schroders plc. (Source: “Why Solar Energy’s Prospects Look Bright For 2020,” Schroders plc, January 2, 2020.)

“[We] see a bright long-term outlook for the solar sector.”

Allied Market Research estimates that the global solar power market could scale up to as much as $223.3 billion by 2026, representing a compound annual growth rate (CAGR) of 20.5% from 2019 to 2026. (Source: “Solar Energy Market Outlook – 2026,” Allied Market Research, last accessed February 21, 2020.)

These Two Alternative Green Energy Stocks Beating Tesla

The renewed excitement for alternative energy stocks has fueled buying of shares, including of Tesla stock.

The Invesco Solar ETF (NYSEARCA:TAN) is up 48% over the past three months and up 67% over the past year. The ETF’s top holding is SolarEdge Technologies Inc (NASDAQ:SEDG).

Chart courtesy of StockCharts.com

SolarEdge stock has soared 25% over the past five days, 46% this year, and a sizzling 231% over the past year, beating the 209% year-over-year gain by Tesla stock.

The Israel-based provider of solar solutions reported record revenues and has destroyed Wall Street estimates.

Chart courtesy of StockCharts.com

On the more speculative end, shares of Plug Power Inc (NASDAQ:PLUG), a maker of hydrogen fuel cells found in forklifts and warehouse equipment, climbed 79% this year and 218% over the past year.

Chart courtesy of StockCharts.com

Analyst Take

Despite the current federal government’s view toward green energy, the reality is that the world is actively moving toward the use of alternative energy technologies such as solar power.

Tesla Inc is a key player in green energy, but there are many high-prospects renewable energy players participating in the global drive toward a greener planet.