Taiwan New Energy Stock Investment Guide: Seizing Opportunities in the Green Energy Transition

In the wave of energy transition, Taiwanese renewable energy stocks are becoming a hot topic among investors. As global climate issues intensify and countries accelerate energy structure adjustments, the renewable energy industry centered around solar, wind, and energy storage is ushering in unprecedented development opportunities. Taiwan, as a leading technology manufacturing country, is gradually demonstrating its investment value through innovation and application in the renewable energy sector.

For investors, understanding the development trajectory and specific targets of Taiwan’s renewable energy industry is key to seizing this round of investment opportunities. This article will analyze the current state of Taiwan’s renewable energy market, future trends, and high-quality companies worth关注.

Current Status of Taiwan’s Renewable Energy: Huge Growth Potential

Taiwan’s Position from a Global Perspective

According to the latest data from the International Energy Agency, in 2022, renewable energy accounted for nearly 30% of the global power system, an increase of 1.5% compared to the previous year. Among them, European countries performed remarkably well, with the UK reaching 43%, Germany 44%, and the Netherlands 40%. In contrast, Taiwan’s renewable energy share is only 8%, far below neighboring Asian countries such as China at 32% and Japan at 22%.

What does this mean? The investment opportunities in Taiwan’s renewable energy stocks stem precisely from this relative lag—huge growth space.

Urgency of Energy Structure Adjustment

As of 2022, Taiwan’s total power generation was 288.2 billion kWh, with coal and natural gas accounting for 80.88%, and renewable energy contributing only 8.27%. With the “2025 Non-Nuclear Homeland” goal advancing, Taiwan must replace the 8.24% share of nuclear power with other energy sources within 2-3 years. This means renewable energy needs to double in growth, with its future share approaching 15%.

From an energy security perspective, Taiwan imports 97.3% of its energy consumption, with only 2.7% domestically produced. Fluctuations in international energy prices and geopolitical risks further reinforce the necessity of developing local renewable energy sources.

Investment Prospects for Taiwan’s Renewable Energy Stocks

Clear Policy-Driven Goals

The Taiwanese government has outlined a clear development blueprint for renewable energy: by 2025, solar PV capacity will reach 20GW, offshore wind power 5.6GW, aiming for renewable energy to account for 15.1% of national power generation. These specific, quantifiable targets provide a predictable market demand for renewable energy companies.

Three Major Investment Themes

• Solar and wind: demand for equipment, engineering, and operation & maintenance driven by capacity expansion
• Energy storage systems: ensuring stable green power output and alleviating intermittent power generation issues
• Electric vehicle ecosystem: opportunities in charging infrastructure, vehicle electronics, and related industries

Recommended Renewable Energy Stocks in Taiwan

1. Delta Electronics (2308): Dual Engines in Energy Storage and Automotive Electronics

Delta’s core advantage lies not in purely solar or wind equipment but in the widespread application of power electronics technology—especially energy storage systems. Whether solar or wind, their output is intermittent, relying on storage systems for regulation, which is Delta’s expertise.

In the automotive electronics field, Delta has secured 75% of the top 20 global automakers as clients. As EV penetration increases and certification thresholds for automakers rise, revenue from automotive electronics is expected to grow significantly.

As of June 2023, Delta’s consolidated revenue reached NT$34.825 billion, up 8% year-on-year, setting a new high for the same period. Over the past three years, revenue has accelerated: NT$28.26 billion in 2020, NT$31.47 billion in 2021, and NT$38.44 billion in 2022. This growth trajectory reflects the company’s increasing competitiveness in the new energy era.

2. Suncore Energy (6806): Explosive Growth in Wind Power Engineering Revenue

Suncore Energy focuses on solar PV, wind power, and renewable energy investments, providing one-stop services from project evaluation to completion and maintenance. After its IPO in November 2022, the company’s performance showed a clear turnaround in 2023.

A key turning point was recognizing revenue from the Taiwan Power Company’s offshore wind project phase two. In April, monthly revenue surged to NT$774 million, mainly due to progress on large wind projects. Revenue from this project will be gradually recognized over the next two years, offering significant profit growth potential.

For long-term investors, this presents a typical project cycle-driven performance elasticity opportunity.

3. Hwa Sheng (1519): Dual Benefits from Grid Upgrades and Charging Stations

Hwa Sheng is a long-term partner of Taiwan Power, supplying transformers and other grid equipment. In September 2022, Taiwan Power announced a 10-year, NT$564.5 billion plan to strengthen grid resilience, creating substantial equipment demand for Hwa Sheng.

Meanwhile, Hwa Sheng controls nearly 20% of Taiwan’s EV charging station market, leading the industry. In the first half of this year, revenue reached NT$4.643 billion, up 34.96% year-on-year; in Q2, revenue was NT$3.102 billion, up 51.72%, both hitting new highs for the same period.

It is worth noting that the US is actively bringing manufacturing back home, and Southeast Asian economic development is also boosting demand for electrical equipment. As one of Taiwan’s major exporters of heavy electrical equipment, Hwa Sheng’s exports are expected to grow significantly. However, it should be noted that the stock price has already risen 242% since the beginning of the year, facing short-term correction pressure, so waiting for a better entry point is advisable.

4. Motech Industries (5483): Beneficiary of US Energy Policies in Solar Industry

In August 2022, the US Senate passed the “Inflation Reduction Act,” allocating US$369 billion to support energy transition. According to the US Solar Energy Industries Association, this act is expected to increase US solar installations by 69% over the next decade.

Motech Industries, as Taiwan’s leading solar company, naturally benefits from this policy dividend. In 2022, revenue from the solar business exceeded NT$10 billion, reaching NT$10.25 billion, up 34.5% year-on-year.

However, attention should be paid to the fact that prices for upstream raw materials such as polysilicon, silicon wafers, and batteries are under downward pressure. Investors are advised to closely monitor upstream raw material price trends and consider entering when prices rebound.

Risks and Opportunities in Renewable Energy Stock Investment

Investment Advantages

Renewable energy aligns with ESG principles and has the potential to be included in thematic funds. Government support is strong, with various tax incentives and subsidy policies backing industry development. The industry has enormous growth potential, and as global energy transition accelerates, related companies are likely to yield substantial returns. Diversification benefits are good, and renewable energy has relatively low correlation with traditional industries.

Investment Risks

Stock prices can be volatile, heavily influenced by policy changes and energy price fluctuations. Earnings and dividends are unstable; most renewable energy companies are in expansion phases, making stability lower than traditional power companies. Stock selection is challenging, as the market has entered a highly competitive stage, requiring careful discernment. The lack of hedging tools and the relatively niche status of this emerging sector make it difficult to build comprehensive risk hedging strategies.

Investment Recommendations

While investment opportunities in Taiwan’s renewable energy stocks do exist, the key points are:

First, implement thorough risk management. Companies in emerging industries often have volatile performance, so controlling the pace of buying and position size is essential.

Second, adopt a long-term investment perspective. Renewable energy is a century-long project; short-term trading is not advisable.

Third, pay attention to the specific progress of companies, such as Suncore Energy’s wind project confirmations, Hwa Sheng’s grid contracts, and upstream cost changes for Motech Industries—these are important references for timing investments.

Finally, adjust allocations according to your risk tolerance. Conservative investors may focus on stable cash-flow targets like Delta Electronics, while aggressive investors can participate in companies with greater growth potential but higher volatility.

Taiwan’s renewable energy stocks are at a critical stage of energy transition, with policy support, market demand, and technological innovation resonating to create a rare window of opportunity. To seize this opportunity, a thorough understanding of the market, careful selection of targets, and effective risk management are essential.