2025 Solar Panel Investment Map: Which Stocks Are Worth Watching

Will the solar energy industry in 2025 present investment opportunities? As global commitments to net-zero emissions and energy structure adjustments accelerate, the solar industry is entering a new development cycle. This article will delve into high-quality market targets and analyze these companies’ growth potential from fundamental and technical perspectives.

Why Solar Panels Remain a Future Trend

Addressing climate change has become a global consensus, with demand for green energy continuously expanding. Compared to wind and other renewable energies, solar resources are naturally abundant and widely distributed. Additionally, solar systems have low operation and maintenance costs, flexible installation, and are suitable for diverse applications from residential rooftops to large power plants.

Technologically, the solar industry has achieved significant breakthroughs in recent years. Battery conversion efficiencies keep improving, production costs decline year by year, and industry scaling trends are evident. However, industry development also faces challenges—policy variables, increasing market competition, rapid technological iterations—all influencing corporate prospects.

The Three Star Stocks in the U.S. Solar Sector

First Solar: Leader in Thin-Film Technology

Founded in 1999 and headquartered in Arizona, First Solar is a pioneer in U.S. solar cell manufacturing. Stock ticker: FSLR, specializing in thin-film photovoltaic modules.

The company’s core competitiveness lies in its proprietary thin-film technology system. In harsh environments like low light and high temperatures, its modules outperform traditional silicon-based products. Larger module sizes further reduce unit costs, making it the preferred choice for utility-scale projects.

As a domestic U.S. manufacturer, First Solar benefits from tax incentives under the Inflation Reduction Act and has signed long-term supply agreements with multiple U.S. utilities. Government support for domestic manufacturing and tariffs on imported modules provide additional protection.

Analysts forecast that under baseline scenarios—if revenue remains stable or grows at 5% annually, and gross margin stays at current levels—EPS could stabilize around $8. Using a P/E ratio of 22-25x, the fair valuation range should be $175-$200. In optimistic scenarios—if the Fed cuts interest rates and large project constructions commence, coupled with a rebound in residential PV demand—EPS could reach $10 by 2026, pushing stock price toward $250.

On average, 26 Wall Street analysts set a target price of $210.12, with a high of $275 and a low of $157, indicating about 26% upside potential.

Nextracker: Leader in Tracking Systems

Nextracker focuses on smart tracking systems for utility-scale solar power plants, adjusting PV panel orientation in real-time to maximize solar energy capture. This solution significantly improves power generation efficiency and optimizes project economics.

This company has been a strong performer among solar stocks this year. After a substantial beat in Q2 earnings in May, the stock surged nearly 12%, maintaining high levels.

The company attributes its strong performance to robust global demand for solar solutions. Founder and CEO Dan Shugar emphasizes that current results lay a foundation for growth this year and support key strategic investments.

Average target price from 18 Wall Street analysts is $63.94, with a high of $71 and a low of $52, about 12% above current price.

Enphase Energy: Innovator in Microinverters

Founded in 2006 and headquartered in California, Enphase Energy specializes in designing and manufacturing microinverter systems to improve solar panel conversion efficiency. After launching its first product in 2009, it quickly gained market share and listed on NASDAQ in 2012 (ticker: ENPH).

Recently, the company has expanded into energy storage and management software, aiming to provide comprehensive residential energy solutions. However, its stock faces pressure due to the U.S.-China tariff disputes. Its battery supply chain heavily depends on China, with 95% of lithium iron phosphate cells sourced from Chinese suppliers.

In the short term, the company will bear most of the tariff impacts. Q2 2025 gross margin is expected to be pressured by 200 basis points, with impacts expanding to 600-800 bps by Q3. However, this impact is phased. Enphase is actively diversifying its battery supply sources, aiming for most batteries to be non-China sourced by Q2 2026.

Average target price from 25 Wall Street analysts is $50.82, with a high of $84 and a low of $31.11, about 23% upside potential.

Performance of Solar-Related Stocks in Taiwan Market

Delta Electronics: High-Margin Top Performer

Delta Electronics’ full-year 2024 consolidated revenue reached NT$421.1 billion, up 5%. Gross margin remains high at 32.4%, net profit after tax NT$35.2 billion, net profit margin 8.4%, EPS NT$13.56. Return on equity stays steady at 16.4%, with all financial indicators showing stable growth.

Morgan Stanley recently raised its target price from NT$440 to NT$485, maintaining an overweight rating. The focus is on the company’s breakthroughs in high-voltage DC power solutions for AI data centers and industrial sectors. The firm believes that as global demand for high-end power supplies increases, Delta will continue to benefit, with growth momentum extending into 2027.

China Electric Power: A Black Horse with Record Net Profit

In 2024, China Electric Power posted a net profit after tax of NT$3.623 billion, a 128% increase year-over-year, setting a record. EPS also hit a new high at NT$7.33.

In Q1 2025, driven by continued orders from Taipower’s resilient grid projects, revenue reached NT$6.448 billion, a new high for the same period. However, due to a higher proportion of lower-margin engineering projects, EPS declined from NT$1.93 to NT$1.78 compared to the same quarter last year.

According to FactSet’s survey of 6 analysts, the median target price was revised upward from NT$182.5 to NT$195.5, a 7.12% increase. The highest valuation is NT$211, the lowest NT$167.

China Rental-KY: Attractive Dividend Yield

China Rental-KY’s P/E ratio and P/B ratio are currently below industry averages. Its cash dividend yield is 5.04%, outperforming the overall market. Notably, major shareholders have recently increased their holdings, indicating internal confidence in the company’s prospects.

Development Context of the Solar Industry

The origin of solar technology dates back to 1839 when French scientist Edmond Becquerel discovered the photovoltaic effect. Practical applications began in 1954 with Bell Labs’ silicon-based photovoltaic cells, which had a conversion efficiency of only 6%, but marked the start of technological maturity.

During the 1960s space programs, NASA used solar cells for satellite power, leading to rapid technological development. The 1970s energy crisis spurred global interest in alternative energy, with investments and support for solar industry growth, though costs remained high at the time. It wasn’t until the 1990s, with technological advances and scale expansion, that costs started to decline significantly.

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

Recent Trends in Solar Stocks

The Invesco Solar ETF (ticker: TAN) price movements reflect the industry’s development trajectory.

2008-2009: TAN launched during a peak investment period, with government subsidies and incentives worldwide. After the financial crisis, global recession and cheap Chinese PV modules flooded markets, causing a bubble burst and sharp declines in stock prices.

2010s: Technological progress improved efficiency and reduced costs, making solar power more economical. However, frequent policy changes and rising competition posed challenges. In 2011, the U.S. imposed anti-dumping measures on Chinese PV products, causing TAN’s price volatility. In the latter half of the decade, global climate commitments fueled rapid industry growth, and TAN prices stabilized and recovered modestly.

Post-2020: The COVID-19 pandemic initially impacted the global economy, but with vaccine rollout and green stimulus measures, solar industry regained momentum, with TAN reaching a decade-high.

2024: The U.S. solar industry faced multiple challenges. Utility-scale PV grew strongly, but residential market declined 32%. Macroeconomic headwinds (high interest rates, Chinese competition) caused many companies to incur losses. The policy uncertainty surrounding the Inflation Reduction Act highlighted industry vulnerability. TAN fell 37.62% for the year. Stock performances diverged: SunPower plunged 70% into bankruptcy; SolarEdge’s stock dropped from nearly $80 to below $20; but First Solar showed resilience, with a slight gain for the year.

Investment Opportunities in Solar Stocks

The 2025 solar industry is at the intersection of policy support and technological advancement. Despite adjustments in 2024, leading companies with solid fundamentals and reasonable valuations have become attractive to value investors. Whether in U.S. stocks like First Solar, Nextracker, Enphase Energy, or Taiwanese stocks like Delta Electronics, China Electric Power, China Rental-KY, now is a good time for investors to reassess their potential.