Investing in Solar Energy Stocks

The solar energy industry builds and installs devices to capture energy from the sun and convert it into electric power. Companies in the industry are working to transition the global economy from fossil fuels such as oil and natural gas to renewable energy sources. It will take trillions of dollars and many years to complete the transition, making the solar energy industry a compelling opportunity for long-term investors.

The sector encompasses a wide variety of companies with the following functions:

Here's why these solar stocks shine brightly in this rapidly expanding industry.

First Solar (FSLR +14.28%) is a global leader in developing solar energy solutions. It develops, manufactures, and sells advanced solar modules.

One thing that sets First Solar apart from other solar panel makers is its focus on manufacturing a proprietary, advanced thin-film module. In less-than-ideal conditions, such as low light and hot weather, its panels perform better than competing silicon modules. They're also larger in size, which helps reduce the cost per watt. Those factors make them ideal for utility-scale solar energy projects.

First Solar also distinguishes itself from its peers in the solar sector by having one of the strongest balance sheets. It routinely has more cash than debt (it anticipates closing 2025 with between $1.3 billion and $2 billion in net cash), giving it the financial flexibility to continue executing its strategy of developing and building thin-film solar modules for utility-scale customers, including expanding its manufacturing capacity. First Solar is in an excellent position to thrive as the solar industry continues expanding.

First Solar also has a lot of growth lined up. In late 2025, the company had 64 gigawatts (GW) of total bookings in its backlog, which it expects to deliver over the next several years. Meanwhile, it had another 83.3 GW of booking opportunities in its pipeline. It's investing heavily in expanding its solar panel manufacturing capacity to capitalize on the sector's growth. It's also investing in new solar technologies to stay ahead of the competition. The investments should enable First Solar to expand its revenue and earnings at a rapid rate in the coming years.

2. Brookfield Renewable

Brookfield Renewable (BEP +1.26%) is an energy company that generates renewable energy that it sells under long-term power purchase agreements. Brookfield's business model provides it with steady cash flow to pay an attractive dividend yield (almost 4% in late 2025).

Brookfield Renewable has a globally diversified renewable energy portfolio. It's a global leader in hydroelectric power plants (8.3 GW of capacity and 47% of its funds from operations or FFO). It complements those facilities with rapidly expanding onshore wind energy (16.9 GW and 21%), utility-scale solar (11.7 GW and 16%), distributed energy (e.g., rooftop solar), and energy storage platforms (6.4 GW and 9%). The company also has a growing sustainable solutions business (7%), which includes carbon capture and storage, biofuel production, nuclear services, and solar panel manufacturing.

The clean energy company believes solar could make up the majority of its production capacity within the next decade -- not because it doesn't see a bright future for wind or hydro, but because it sees greater opportunity in solar. Declining costs are making solar development projects increasingly lucrative. Utility-scale solar energy makes up 57% of its 230 GW global development pipeline, while distributed energy comprises another 22%.

Brookfield has made several acquisitions in recent years to increase its solar energy development capabilities. In early 2025, it bought National Grid Renewables (NGG -1.05%). That deal added 3.9 GW of operating and under-construction assets, a 1 GW construction-ready portfolio, and a more than 30 GW development pipeline, mainly focused on utility-scale solar and battery storage projects.

Brookfield's solar-focused development project pipeline should add 3% to 5% to its annual FFO per share through 2030. Add that to its other organic growth drivers and acquisitions, and Brookfield believes it can grow its FFO per share by more than 10% annually through the next decade. That should support the company's plan to increase its high-yielding dividend by 5% to 9%. Its dividend growth makes it one of the top renewable energy dividend stocks. Meanwhile, its overall combination of growth and income should enable Brookfield Renewable to generate attractive total returns in the coming years.

3. Enphase Energy

NextEra Energy (NEE -0.12%) is one of the largest electric utilities and energy infrastructure companies in North America. It owns Florida Power & Light (FPL), the largest electric utility in the country, with about 12 million customers. Meanwhile, NextEra Energy Resources owns, operates, and develops energy infrastructure such as renewable energy projects, electricity transmission lines, and gas-power infrastructure such as pipelines and power plants.

FPL owns and operates a nearly 8 GW solar energy portfolio, the largest utility-owned solar portfolio in the country. FPL plans to add over 17 GW of solar and another 7.6 GW of battery storage over the next decade to support its customers' growing electricity needs. By 2034, FPL expects to get about 35% of its power from solar energy, up from 9% this year.

Meanwhile, NextEra Energy Resources had more than 38 GW of generation and storage capacity in operation in 2025, 21% of which was solar energy. The company expected to more than double its capacity by 2027, including plans to add at least 22.4 GW of additional solar capacity over the next few years.

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