Solar energy stocks have taken an absolute beating since peaking early in 2021 on fear of everything from inflation to higher commodity costs. But the industry has continued to grow and has a brighter future today than any time in the next decade. 

We asked three of our energy contributors for their top solar energy stock investors can profit from over the long term, and SunPower (NASDAQ:SPWR), Enphase Energy (NASDAQ:ENPH), and Array Technologies (NASDAQ:ARRY) were at the top of the list. Here's why. 

Home with large solar installation on the roof.

Image source: Getty Images.

As solar leader on sale

Travis Hoium (SunPower): Shares of SunPower have fallen over 50% from their high early this year, but nothing has fundamentally changed about the business. Solar energy continues to have tailwinds from federal policy changes and a potential infrastructure deal in Washington, D.C., not to mention the fact that it's competitive with traditional electricity rates across the country.

What investors should really like is that SunPower's management reiterated 35% revenue growth guidance for 2021 and EBITDA -- or earnings before interest, taxes, depreciation, and amortization -- should be around $120 million for the year. And they expect EBITDA to grow another 40% in 2022. 

What sunk the stock was rising interest rates and the potential for higher commodity prices putting pressure on margins. But these are factors that are largely out of SunPower's control and may not hold the stock back if the company continues to grow. 

SunPower isn't a stock without risks, but it has a leadership position in residential and commercial solar and is pioneering energy storage for these two markets. I think as its market grows SunPower will be a big winner for investors and the discount we're getting today is too good to pass up. 

A fast grower takes a break

Howard Smith (Enphase Energy): There's no mistaking the growing market in solar energy. In an updated report on renewables, the International Energy Agency (IEA) just said that renewables were the only energy source for which demand increased in 2020. Globally, annual renewable capacity additions increased 45% year over year despite the pandemic headwinds in 2020. 

A large contributor to that increase was the 23% expansion of new solar photovoltaic (PV) installations. Enphase Energy is a leader in residential and commercial solar technologies, and has been growing at a faster pace than the overall sector. Revenue has risen from $316 million in 2018 to almost $775 million in 2020. And with the post-pandemic economic recovery, the company expects to have more than $600 million in sales just through the first half of 2021. The company's growth hasn't hurt profit margins, either, as they have also steadily increased. 

ENPH Revenue (TTM) Chart

ENPH Revenue (TTM) data by YCharts

Though the stock is still not cheap, shareholders have gotten a chance to buy in well off its highs. Enphase shares have dropped 40% since the first week in January. Its free cash flow jumped to a record $200 million in 2020, from $124 million in 2019. 

Enphase also continues to expand its offerings. Sales of its new energy storage system jumped 35% in the fourth quarter versus the prior quarter in 2020, and the company said "strong worldwide demand" continued in the first quarter of 2021.  

Investors should be thinking long-term with an investment in Enphase. As mentioned, though the stock has dropped significantly, it remains technically expensive with a price-to-earnings ratio of about 60 on expected 2021 earnings. But analysts also expect earnings to grow another 35% in 2022. With that kind of growth, it won't take long for the company to earn that valuation.

From sunny skies to down in the doldrums 

Daniel Foelber (Array Technologies): Since going public in October 2020, Array Technologies hasn't exactly received the warm welcome it was hoping for. After climbing above $54 a share, the stock has since tumbled to around $14 a share, representing a painful 74% sell-off from the high. 

Although new to the public markets, Array is an industry veteran. It's been in business for over 30 years -- manufacturing trackers for utility-scale and commercial customers. Its industry-leading trackers hold a dominant market share in the U.S. and have contributed to over 22 gigawatts (GW) of projects around the globe. 

Prior to its recent earnings call, Array exhibited a healthy balance of top- and bottom-line growth. It finished 2020 with revenue of $873 million and adjusted basic and diluted net income per share of $0.93 while providing guidance for over 20% revenue growth in 2021 and $0.82 to $0.92 in adjusted net income per share. 

Rising steel, freight, and logistics costs have taken a toll on the company's performance. Commodity prices have risen faster than Array can adjust its contracts, which hammered its first-quarter profitably. Management needs to go to the drawing board to figure out how it's going to pass along costs to the customer without losing sales. It's a balancing act that's going to take time to figure out, so Array retracted its full-year 2021 guidance.

ARRY Chart

ARRY data by YCharts

Array's short-term outlook is about as cloudy as it can get. 2021 is looking to be a big disappointment and nothing like the clear skies that management was guiding for just a few months ago. It's unsurprising that Array's stock would tumble. However, there's reason to believe the sell-off has gone too far.

The good news is that Array's problems should be temporary. As bad as things are right now and could get in the coming quarters, the challenges have virtually nothing to do with the company's long-term thesis. Array believes that trackers will grow at a 19.4% compound annual growth rate (CAGR) between 2019 and 2023 as more projects are developed and industry costs continue to come down. Array's trackers have some of the lowest levelized cost of energy (LCOE) in the business and are a key driver of keeping costs low even as tax credits are phased out. The engineering, procurement, and construction (EPC) companies Array does business with continue to use trackers to save costs, as evidenced by Array's recent 4 gigawatt (GW) contract with leading EPC company Primoris Services Corporation

Array's valuation is going to look a whole lot cheaper if its business can return to normal in 2022. However, investors need to be OK with short-term volatility and the realization that the recovery could take some time. 

There are tailwinds behind solar energy

Solar energy continues to grow around the world and new innovations like energy storage are making solar more viable and cost effective in more markets. SunPower, Enphase, and Array Technologies should be three of the companies investors can profit from given this growth. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.