Are American solar concept stocks in 2025 worth paying attention to? Leading company outlook analysis

Under the broader context of global energy structure adjustments, the solar energy industry is becoming a key focus for investors. As we approach 2025, US solar concept stocks face a situation where policy support and market competition coexist. This article will analyze the investment value of this sector in depth and highlight several leading companies worth关注.

Core Investment Logic of the Solar Sector

Compared to other renewable energy sources, solar energy has multiple advantages. First, photovoltaic resources are widely distributed, and development barriers are relatively low; second, operational and maintenance costs after installation are extremely low, with clear economic benefits; third, recent breakthroughs in photovoltaic technology have emerged continuously, costs are being optimized, and application scenarios have expanded from decentralized household devices to large-scale power plants, providing strong endogenous industry momentum.

However, it is also important to note that this sector faces multiple constraints such as policy fluctuations, import tariffs adjustments, and accelerated technological iterations. In 2024, the overall performance of solar concept stocks was under pressure, with most companies experiencing profit compression, and market concerns about policy sustainability have also increased.

Growth Potential of the US Solar Market

According to the U.S. Energy Information Administration, the total installed photovoltaic capacity in the US is expected to surpass 182GW by 2026. Texas, as the sunniest state, is projected to add 11.6GW of new capacity in 2025, ranking first nationwide. The federal “Inflation Reduction Act” provides significant tax incentives for businesses and residents, effectively encouraging private capital inflow into the solar field.

Leading US Solar Concept Stocks Overview

First Solar’s Thin-Film Technology Advantage

First Solar was founded in 1999, early on mastering industry-leading thin-film photovoltaic manufacturing technology. Compared to traditional silicon-based modules, its products perform better in low-light and high-temperature environments, with larger module sizes and competitive cost per watt, making it the preferred choice for utility-scale projects.

As a leading domestic US photovoltaic manufacturer, First Solar benefits directly from the policy dividends of the “Inflation Reduction Act” and domestic manufacturing protections, and has signed long-term supply contracts with multiple US utilities. According to analysis by Trefis Team, under a baseline scenario with a 5% annual revenue growth and stable profit margins, EPS could remain steady at $8, with a reasonable valuation range of $175–$200 based on a 22-25x P/E ratio. In an optimistic scenario, if the Fed initiates a rate cut cycle and stimulates large project investments, EPS could rise to $10, with a stock potential of $250.

On average, 26 Wall Street analysts’ December target price is $210.12, representing a 26.31% upside from the current stock price.

Nextracker’s Leading Tracking System Position

Nextracker focuses on providing intelligent tracking solutions for utility-scale power stations, adjusting photovoltaic panel orientation in real-time to maximize solar energy capture, thereby improving power generation efficiency and project economics. The company’s stock rose nearly 12% after a better-than-expected Q1 earnings report and remains high.

Founder and CEO Dan Shugar emphasized that the current strong performance lays a foundation for full-year growth and supports key strategic investments. 18 Wall Street analysts’ average target price is $63.94, offering a 12.33% upside from the current price of $56.92.

Enphase Energy’s Energy Management Layout

Enphase Energy started with microinverter technology and has expanded into battery storage and energy management software, aiming to create comprehensive residential energy solutions. In Q4 2024, revenue increased by 26% year-over-year, and EPS surged over 170%, indicating strong growth momentum.

However, the company faces supply chain challenges. 95% of lithium iron phosphate batteries are sourced from China, incurring significant tariff impacts in the short term. It is expected that in Q2 2025, gross margin will be pressured by 200 basis points, with impacts expanding to 600–800 basis points in Q3. The company is actively diversifying its supply sources, with most batteries expected to be sourced outside China by Q2 2026.

The average target price from 25 Wall Street analysts is $50.82, representing a 23.41% potential upside from the current price of $41.18.

Performance of Taiwan Solar Concept Stocks

Delta Electronics’ Financial Stability and Technological Breakthroughs

Delta Electronics reported consolidated revenue of NT$421.1 billion in 2024, up 5% year-over-year, with a gross margin maintained at a high level of 32.4%. Net profit was NT$35.2 billion, with EPS of NT$13.56. Return on equity reached 16.4%, and various financial indicators showed steady growth.

Morgan Stanley recently raised its target price from NT$440 to NT$485, highlighting the company’s technological leadership in 800V high-voltage DC power solutions for AI data centers and industrial applications. Analysts believe that as global demand for high-end power supplies increases, Delta’s growth momentum could continue through 2027.

Zhongxing Electric’s Record-High Performance

Zhongxing Electric posted a net profit of NT$3.623 billion in 2024, a significant increase of 128% year-over-year, setting a new high. EPS also reached NT$7.33, a record high. In Q1 2025, driven by TPC’s robust grid expansion projects, revenue hit NT$6.448 billion, a new high for the same period.

Although the lower gross margin of engineering projects caused EPS to decline slightly from NT$1.93 to NT$1.78 compared to last year, FactSet’s survey of 6 analysts raised the median target price from NT$182.5 to NT$195.5, a 7.12% increase, with a high estimate of NT$211.

Long-term Development Trajectory of the Solar Industry

The commercialization of solar technology began in 19th-century France, with Edmond Becquerel discovering the photovoltaic effect in 1839. The industry’s practical application started in 1954 with Bell Labs developing the first silicon-based photovoltaic cell, with a conversion efficiency of only 6%, but marking the entry of technology into practical use.

In the 1960s, the US space program accelerated solar technology development, using it to power satellites. The 1970s energy crises triggered by geopolitical conflicts increased global demand for alternative energy, attracting more attention and investment into solar panels. However, costs remained high until the 1990s, when technological advances and scale expansion gradually reduced costs.

Entering the 21st century, the solar industry experienced explosive growth. China’s massive capital investment and policy support drastically lowered technological costs. By 2021, according to IEA data, renewable energies like solar had become the lowest-cost power sources in many regions worldwide.

Cyclical Fluctuation Patterns of Solar Concept Stocks

Using the Invesco Solar ETF (ticker: TAN) as a reference, its historical trend reflects the market cycle changes of the solar sector.

2008 to 2009: TAN was launched during a peak industry cycle, with numerous policies incentivizing renewable energy and a surge of new companies. But following the 2008 financial crisis and China’s low-price market capture, the industry bubble burst, causing sharp declines in individual stocks.

2010s: Significant technological progress improved efficiency and reduced costs, enhancing economic viability. However, frequent policy changes and intensified competition caused TAN’s price to fluctuate. In the latter half of the 2010s, global climate commitments increased, pushing the industry to accelerate growth, and TAN’s price began to recover.

Post-2020: The COVID-19 pandemic initially impacted the global economy, but with economic reopening and green stimulus plans, the solar industry regained favor, with TAN reaching a decade-high.

2024 Challenges: Utility-scale solar growth remained strong, but residential market declined by 32%, compounded by high interest rates and Chinese competition, putting pressure on companies. Expectations of the possible repeal of the “Inflation Reduction Act” increased market concerns. TAN fell by 37.62% for the year. Stock performances varied: SunPower plunged 70% into bankruptcy, SolarEdge dropped from $80 to below $20, but First Solar showed resilience with a slight increase.

In 2025, US solar concept stocks face dual influences of policy support and market adjustments. Investors should closely monitor the fundamentals of leading companies and industry policy trends, weighing short-term volatility against long-term opportunities.