Investors, beware. Investing in these three companies could allow you to make money, save the world, and feel good all the while. Keep reading for the top three top stocks for fighting climate change.
1. SolarCity Corp
When it comes to corporate visions, it doesn't get much greener than SolarCity Corp's (NASDAQ:SCTY):
Transform the way energy is delivered in the 21st century through cleaner, more affordable distributed solar energy.
But the rooftop solar panel kit company has more than just a vision. At the end of fiscal 2012, SolarCity Corp had 48,000 customers. By the end of fiscal 2014, it had quadrupled its customer base to 190,000. And for 2018, CEO Lyndon Rive has set himself and his company a goal of one million customers.
For investors interested in growth, solar is still in early stages. At current contract prices, SolarCity estimates its market at $60 billion in electricity sales, a far cry from its current $255 million in revenue for fiscal 2014. And even for the states where SolarCity already has a presence, the company has installed rooftop solar panel kits on just 0.5% of all single-family housing units.
After a bit of an overly expectant boom and bust, solar companies and stocks are marching steadily forward. SolarCity Corp has found it especially useful to grow its market share through an innovative solar lease model, allowing customers to install a rooftop panel solar kit with zero money down.
SolarCity isn't everywhere, either. Its 16 state market presence is a strategic decision to grow in places where costs are relatively low, utility rates are relatively high, and the sun shines for solar. Distributed solar generation is a far cry from our current centralized and fossil fuel-centric system, but SolarCity Corp is taking us closer to a greener future, roof by roof.
2. Tesla Motors Inc
SolarCity Corp is a top stock for fighting climate change in our homes, but Tesla Motors Inc (NASDAQ:TSLA) is taking the fight to the road. Approximately 32% of our nation's greenhouse gas pollutions come from power plants, but 28% come from transportation. With all-electric offerings, Tesla Motors is allowing us an alternative energy option for getting from point A to point B.
Despite its big press and monstrous $26 billion market cap, Tesla Motors Inc is still relatively small. The automaker announced earlier this month that its Q1 2015 unit sales amounted to 10,030 vehicles, a 55% increase over Q1 2014. That's peanuts compared to Ford's 235,929 sales in United States in March 2015 alone.
For investors interested in stocks to fight climate change, Tesla Motors is revolutionary -- but the revolution hasn't happened yet. The electricity that drives its vehicles still has to come from somewhere, and as we've seen with SolarCity Corp's penetration rates, renewable energy isn't everywhere. Drivers might still be powering their Tesla vehicles with dirty electricity generated from coal, oil, or natural gas.
But the automaker is up-front about its grades of greenification, and would-be owners can check their states' stats. The company also mentions rooftop solar as an easy way to environmentalize a Tesla's electricity consumption, and this investor wouldn't be surprised to see more formalized Tesla-SolarCity partnerships in the pipeline sometime soon.
3. NextEra Energy Inc
SolarCity Corp and Tesla Motors Inc are stocks fighting climate change at an individual level, but there are also environmental investing opportunities in our infrastructure. NextEra Energy Inc (NYSE:NEE) is the undisputed utility leader in renewable energy.
Its bread and butter is wind energy, with a whopping $13 billion in investments spread across more than 100 wind farms. Chalking up to 58% of NextEra's total competitive generation, an investment in NextEra Energy is an investment in the future of wind energy.
But beyond wind, NextEra Energy Inc is doing something most other utilities aren't: embracing distributed energy. Rather than lobby regulators to prohibitively tax distributed power producers, NextEra Energy is partnering up to responsibly usher distributed energy into the grid.
Nowhere is this more evident than in Hawaii. Last December, NextEra Energy bought the utility that provides power to 95% of all residents. The $4.3 billion deal is expected to be accretive (positively affecting earnings per share) for investors starting next year, and NextEra Energy is currently filing a request with regulators to more than double the amount of solar power allowed on the grid. That could mean major cost savings for NextEra, as well as new sales opportunities for rooftop solar panel kit installers like SolarCity Corp.
Go green to make green?
In the wider investing world, there isn't exactly an overflow of environmental stock opportunities. But SolarCity Corp, Tesla Motors Inc, and NextEra Energy Inc are successful corporations banking on the fight against climate change. If you're ready to put your green behind the green movement, these three companies may be your pathway to profit.
Justin Loiseau owns shares of Tesla Motors and his favorite color is brown, not green. The Motley Fool recommends SolarCity and Tesla Motors. The Motley Fool owns shares of SolarCity and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.