The urgent need to combat greenhouse gas emissions has accelerated the shift from fossil fuels to renewable energy, creating significant opportunities for investors. While this transition will require substantial investments and time, the U.S. solar industry is poised for substantial growth, driven by declining costs and supportive policies. This growth opens up promising avenues in areas such as solar panel manufacturing, which benefits from economies of scale, as well as residential and commercial rooftop installations.

Amid the backdrop, Maxeon Solar Technologies Ltd. MAXN, Nextracker NXT and First Solar FSLR are well poised to gain.

Solar to Dominate New Power Capacity Additions in 2025

The share of renewables in U.S. electricity generation is expanding rapidly. According to the latest Short-Term Energy Outlook by the U.S. Energy Information Administration (“EIA”), renewables are expected to account for 25% of electricity generation next year, up from an estimated 23% this year. In contrast, coal's share is projected to be unchanged year over year.  

EIA projects that coal-fired power plant retirements will rise to 11 GW in 2025, while new installations will include 9 GW of wind capacity and 25 GW of solar capacity. Thus, the United States will be increasingly witnessing increasing electricity generation from renewable sources.

3 Stocks in the Spotlight: MAXN, NXT, FSLR

Maxeon Solar 

By making advanced solar panels and energy solutions, Maxeon Solar contributes toward combating global warming while making solar energy more accessible and sustainable. By focusing on local manufacturing, the company expects to strengthen its market presence and improve supply chain reliability, which could position it for long-term success as solar energy adoption increases. Carrying a Zacks Rank #3 (Hold), MAXN is likely to see a whopping 87% growth in its bottom line in 2025.

Nextracker

Nextracker is a well-known provider of solar trackers that enable solar panels to follow the sun's movement, thereby increasing the amount of electricity generated by the solar plant. NXT’s trackers are being used in major projects like SB Energy’s Pelican’s Jaw, a large-scale solar and storage project. Its partnerships with prominent players such as SOLV Energy highlight the company’s operational excellence and its ability to secure major contracts in the renewable energy space. NXT, currently carrying a Zacks Rank #2 (Buy), is thus well poised to gain in 2025. You can see the complete list of today’s Zacks #1 Rank stocks here.

First Solar

To accelerate its fight against global warming, First Solar primarily provides eco-efficient solar modules. The advanced thin-film photovoltaic modules of FSLR, with a Zacks Rank of 3, represent highly advanced solar technologies of the next generation. The company’s current contracted backlog of 73.3 GW, combined with an opportunity pipeline of 81.4 GW, including 23.5 GW in mid-to-late stages, demonstrates its strong market position and robust demand for its technology. FSLR is likely to see earnings growth of more than 50% in 2025.

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