Investors consider the best solar stocks in light of the ongoing need for decarbonization, stepping away from burning fossil fuels. The selected companies shine because of their attractive valuations and future forecasted growth rates. In fact, the solar industry is expected to continue its strong performance in the future.

Let’s examine the three hot solar stocks that should be scooped up this month before they start to soar.

First Solar (FSLR)

First Solar (NASDAQ:FSLR) is known for its healthy position in the photovoltaic (PV) panel manufacturing space. It’s one of the first brands that analysts mention when recommending the best solar stocks to buy.

Also, FSLR stock’s previous quarterly results for Q3 2023 were substantial. Solid net sales of $801 million rang in. That’s a significant increase in net income per share to $2.50, up from $1.59 in the previous quarter.

Additionally, the company has a strong balance sheet and capital position. Its attractive outlook and guidance given for FY2024 also bolsters its accolades.

Furthermore, FSLR stock trades at a significant discount to its forward P/E ratio. And, analysts expect that its earnings and revenues will surely be higher in the future.

Enphase Energy (ENPH)

Enphase Energy (NASDAQ:ENPH) is a leader in solar microinverters, a key component in residential and commercial solar systems.

ENPH has momentum on its side on both fundamental and technical levels. For one, its stock price surged 30.8% in December last year. This was due to its corporate restructuring plans and the prospect of industry tax breaks.

Meanwhile, the macro backdrop of falling interest rates and inflation could be a boon for capital-intensive ENPH. Therefore, more cash in people’s pockets and more affordable loans make the bull case stronger for the company.

I also predict that there’s a lot more room to run for the company’s stock price. Despite rallying strongly in December, it’s still down more than 65% from its all-time high. And that is significantly below its long-term average. So, it should trade higher than its current stock price implies, especially with substantial growth in its revenue and EPS.

SolarEdge Technologies (SEDG)

SolarEdge Technologies (NASDAQ:SEDG) specializes in inverter systems and smart energy technologies.

SEDG is my contrarian pick for these best solar stocks to buy. The company’s share is down 72.36% amid an expected slowdown in demand in Europe and a reduced guidance that was announced in October last year.

But, no reward exists without a proportionate amount of risk, and SEDG offers that risk in spades. Wall Street is optimistic that SEDG can turn its business around, as its share has an implied 103% upside from its current levels.

But if investors expect a recovery, then they should be prepared to wait until at least the end of 2025 to see SEDG’s share price move in the positive direction. An enormous 1,345.75% growth is expected for the company’s EPS during that year. This will coincide with the company’s European distributors taking reorder and an overall better economic backdrop.

So, if investors have the right time horizon, as well as have diamond hands, then SEDG could provide a huge amount of gains for risk-tolerant investors.

On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.