Solar Energy Stock Recommendations 2026 Edition: An Analysis of Investment Opportunities in Global Industry Leaders

Entering 2026, the global energy transition is accelerating, and discussions about solar energy stocks are becoming increasingly lively. With strengthened policy support from various countries and continuous declines in technological costs, the solar industry is entering a new growth cycle. This article will analyze the current solar investment landscape in depth and provide references for investors interested in this field.

Renewable energy is gradually becoming the main player in the global energy map. Compared to wind and other clean energy sources, solar energy has inherent advantages: widespread resource distribution, low system operation and maintenance costs, and diverse application scenarios. These advantages suggest that solar stocks are expected to maintain strong growth momentum in the coming years.

Core Logic of Investing in Solar Stocks

Behind the recommendation of solar stocks are three key drivers:

Continuous policy support — Policies like the U.S. Inflation Reduction Act (IRA) provide significant tax incentives for businesses and households. The U.S. Energy Information Administration (EIA) forecasts that the total installed capacity of solar PV in the U.S. will reach 182GW by 2026, with Texas leading all states in 2025 with an additional 11.6GW annually.

Cost optimization through technological progress — Over the past decade, improvements in photovoltaic cell efficiency and sharp reductions in production costs have transformed solar power from a subsidy-dependent industry into an economically viable power source.

Hard demand driven by global climate commitments — Under the push for carbon neutrality by countries and corporations, the demand for renewable energy is experiencing rigid growth, providing long-term support for the solar industry.

However, investors should also be aware of industry challenges: policy risks, increased market competition, rapid technological iteration, and other factors that could pressure stock prices. In 2024, many companies faced operational difficulties due to high interest rate environments and intensified import competition.

Leading Companies: Insights into U.S. Solar Firms

Investment Value of First Solar

Founded in 1999 and based in Arizona, the sunniest state in the U.S., First Solar specializes in thin-film photovoltaic modules. Its core competitiveness lies in advanced thin-film technology, which performs significantly better than traditional silicon-based products under low light and high temperature conditions.

As a leading U.S. manufacturer of solar panels, First Solar benefits from IRA tax credits and long-term supply agreements with U.S. utilities, ensuring stable revenue streams. Government support for domestic manufacturing and import tariffs further strengthen its competitive barriers.

Analysts estimate that if the company maintains stable revenue or achieves about 5% annual growth, with profit margins remaining at current levels, EPS could stay around $8. Under a PE ratio of 22-25, the fair valuation range would be approximately $175–$200. An optimistic scenario projects EPS reaching $10 in 2026, with stock prices potentially hitting $250. Wall Street analysts’ average 12-month target price is $210.12, representing a potential upside of 26.31% from current levels.

Growth Opportunities for Nextracker

Nextracker is a leading supplier of smart tracking systems for utility-scale solar farms. Its innovative solutions adjust the orientation of PV panels in real-time to maximize sunlight capture, significantly improving power generation efficiency and project economics.

The company recently reported outstanding quarterly results, surpassing expectations and causing its stock to rise 12%. The strong performance is attributed to robust global demand for solar solutions. CEO Dan Shugar emphasized that “current results lay a foundation for continued growth this year and support ongoing strategic investments.” Wall Street analysts’ average target price is $63.94, up 12.33% from the stock price of $56.92.

Opportunities and Challenges for Enphase Energy

Founded in 2006, Enphase Energy is a pioneer in microinverter systems. Its products significantly improve solar panel conversion efficiency, and the company has expanded into energy storage and management software.

In 2024, Enphase faces challenges from U.S.-China tariff disputes, as 95% of its lithium iron phosphate (LFP) batteries are sourced from China. The company expects to bear most of the short-term tariff costs, with gross margin pressure of about 200 basis points in the first half of 2025, and impacts potentially expanding to 600–800 basis points later in the year.

However, this impact is phased. Enphase is actively diversifying its battery supply chain, aiming for most battery cells to be sourced outside China by Q2 2026. The average analyst target price is $50.82, up 23.41% from the current stock price of $41.18.

Local Taiwanese Solar Stocks

Taiwan’s solar industry also features several noteworthy listed companies:

Delta Electronics (Code: 2308)

In 2024, Delta Electronics showed steady performance, with consolidated revenue reaching NT$421.1 billion, up 5%. Gross margin remained high at 32.4%, net profit was NT$35.2 billion, with a net margin of 8.4%. EPS was NT$13.56. Return on equity stayed strong at 16.4%, indicating healthy growth.

Morgan Stanley recently raised its target price for Delta from NT$440 to NT$485, maintaining an “Overweight” rating. The firm highlights Delta’s breakthroughs in high-voltage DC (HVDC) power solutions for AI data centers and industrial applications. As global demand for high-end power solutions continues to grow, Delta is expected to benefit and sustain growth into 2027.

Chung Hsing Electric (Code: 1513)

In 2024, Chung Hsing Electric posted impressive results, with net profit reaching NT$3.623 billion, a 128% increase year-over-year, setting a new record. EPS hit NT$7.33, also a new high.

In Q1 2025, the company continued to benefit from TPC’s robust grid expansion, with revenue of NT$6.448 billion, a record for the quarter. Although increased engineering project sales led to a slight decrease in EPS from NT$1.93 to NT$1.78, it still marked a second-highest figure for the period. FactSet surveys show analysts’ median target price for Chung Hsing Electric has been raised from NT$182.5 to NT$195.5, a 7.12% increase.

Chung Tzu-KY (Code: 5871)

Chung Tzu-KY’s current PE and PB ratios are below industry averages. Its cash dividend yield is 5.04%, outperforming the market. Major shareholders have recently increased holdings, indicating market confidence.

Looking to the Future: Long-term Trends in the Solar Industry

The development of solar technology dates back to the 19th century. In 1839, French scientist Edmond Becquerel discovered the photovoltaic effect, laying the foundation for solar power. The first practical silicon-based PV cell was developed in 1954 by Bell Labs in the U.S., with an efficiency of only 6%, but marking the beginning of practical solar energy.

In the 1960s, the U.S. space program accelerated solar technology development, with NASA using solar cells as the main power source for satellites. The 1970s energy crises spurred global interest in alternative energy, attracting more investment into solar. However, high costs persisted until the 1990s, when technological advances and economies of scale drove costs down.

Entering the 21st century, the solar industry experienced explosive growth. China became the largest producer and consumer of solar energy, with massive capital investment and policy support sharply reducing PV costs. By 2021, according to IEA data, solar and wind power had become the cheapest electricity sources in many regions worldwide.

The Invesco Solar ETF (TAN) reflects this industry cycle. Its historical price movements highlight key phases:

2008–2009: The financial crisis caused a bubble burst. Despite policy support, the global recession and Chinese low-cost competition led to industry downturn.

2010s: Technological improvements increased efficiency, and costs declined, boosting competitiveness. Policy shifts and rising climate awareness helped the industry recover.

Post-2020: Post-pandemic green stimulus plans revived the sector, with TAN reaching decade highs.

2024: The U.S. solar industry faces multiple challenges. While utility-scale solar continues to grow strongly, the residential market declined by 32%. High interest rates and Chinese competition caused many companies to suffer losses. Some firms face market pressure and policy uncertainties, with IRA support policies potentially being repealed, exposing industry vulnerability. TAN fell 37.62% in 2024, with individual stocks showing divergence—SunPower plunged 70% and filed for bankruptcy, SolarEdge’s stock dropped from nearly $80 to below $20, while First Solar remained relatively resilient.

Investment Insights for 2026

Based on industry development and current market conditions, the core logic for solar stock recommendations remains valid. Leading U.S. companies like First Solar, Nextracker, and Enphase Energy continue to make progress in technological innovation and cost reduction. Taiwanese firms like Delta and Chung Hsing Electric demonstrate resilience amid policy support and order growth.

Investors should focus on: a company’s technological competitiveness and cost control, supply chain resilience, adaptability to policy changes, and sustainability of long-term profitability. Although short-term risks include policy uncertainties and intensified competition, the long-term global energy transition trend remains intact, and the growth prospects of the solar industry continue to be promising.