Per a BloombergNEF research report, battery capacity in the United States will jump to 4,800MW by the end of 2020 and may surpass 32,000MW by 2025. This could power nearly 26 million American households. Overall, the solar battery market is projected to grow by leaps and bounds in the near future.

In 2018, the US Federal Energy Regulatory Commission passed a rule that allows battery operators in the United States to sell power in the wholesale market. Additionally, batteries installed alongside renewables will earn a U.S. tax credit. These government policies have boosted investment in solar-plus-storage projects across the nation.

What’s Driving the Solar Batteries Market?

According to ResearchAndMarkets.com’s report, the global market for solar battery is expected to witness CAGR of 12.31% during the period 2019-2024. The growth is expected to be driven by decline in lithium-ion battery prices, adoption of electric vehicles, increased sale of consumer electronics, rising awareness of climate change and constant shift to renewable energy.

Solar energy has been a source of power during daytime. However, with the advancement in energy storage technology, it is no longer confined to daylight hours. The United States is one of the leading solar energy and battery markets. Power producers, utilities and technology companies are providing hefty investments to build industrial-scale battery packs across America’s solar farms.

These solar-plus-storage projects will help people avail solar power even after daylight hours. In fact, a rise in such projects can be seen after prices of solar panel and lithium-ion battery dropped nearly 77% and 87%, respectively, over the past 10 years, per a BloombergNEF and the Business Council for Sustainable Energy research report.

Moreover, the market is getting a push from corporate biggies, as efforts to reduce carbon footprint have taken center stage. Google-parent Alphabet and Berkshire Hathaway Energy’s NV Energy are waiting to get government’s approval to run a new data center in Nevada, comprising 350MW of solar panels and nearly 280MW of batteries. In fact, this Google-NV Energy partnership is one of the largest solar-plus-storage corporate purchasing agreements.

5 Stocks to Watch

Solar power technology is now cheaper than coal, and some projects are giving tough competition to gas-fired plants. And it’s not just demand for batteries. The entire solar power equipment market is going to witness a drastic progress in the next five years.

In fact, the global solar power equipment market is expected to reach $185.5 billion by 2026 from $77 billion in 2017 at a CAGR of 11.58%. This market includes solar panels, mounting, racking, and tracking system and storage system.

Given the positive developments in the solar power industry, we have shortlisted five stocks that can provide significant return to investors. 

Clearway Energy, Inc. (CWEN - Free Report) acquires, owns, and operates contracted renewable energy and conventional generation, and thermal infrastructure assets in the United States. These include wind, solar and natural gas-fired power generation facilities. The company’s expected earnings growth rate for the current year is 47.8% compared with the Zacks Alternative Energy - Other industry’s projected earnings growth of 13.7%.

The Zacks Consensus Estimate for the company’s current-year earnings has been revised 1.5% upward over the past 60 days.Clearway Energy carries a Zacks Rank #2 (Buy). 

First Solar, Inc. (FSLR - Free Report) provides photovoltaic solar energy solutions. The company designs, manufactures, and sells cadmium telluride solar modules that convert sunlight into electricity. The company’s expected earnings growth rate for the current year is 80.2% compared with the Zacks Solar industry’s projected earnings growth of 24.2%.

The Zacks Consensus Estimate for the company’s current-year earnings has been revised 1.7% upward over the past 60 days.First Solar carries a Zacks Rank #3 (Hold).

NextEra Energy Partners, LP (NEP - Free Report) owns, and manages contracted clean energy projects. The company’s portfolio includes renewable generation assets consisting of wind and solar projects. The company’s expected earnings growth rate for the current quarter is more than 100% against the Zacks Alternative Energy - Other industry’s projected earnings decline of 46%.

The Zacks Consensus Estimate for the company’s current-year earnings has been revised 1.5% upward over the past 90 days.NextEra Energy Partners carries a Zacks Rank #3.

Azure Power Global Limited (AZRE - Free Report) engages in the development, construction, ownership, operation, maintenance, and management of solar power plants. The company’s expected earnings growth rate for the next quarter is more than 100%.

The Zacks Consensus Estimate for the company’s current-year earnings has been revised 4.8% upward over the past 90 days.Azure Power Global Limited carries a Zacks Rank #3.

Sunworks, Inc. (SUNW - Free Report) provides photovoltaic-based power systems for the agricultural, commercial, industrial, public works, and residential markets. The company’s expected earnings growth rate for the current year is 52% compared with the Zacks Solar industry’s projected earnings growth of 24.2%.

The Zacks Consensus Estimate for the company’s current-year earnings has been revised 2.1% upward over the past 90 days. Sunworks carries a Zacks Rank #3.