The 3 Best Solar Stocks to Buy in Q2 2024

  • The best solar stocks to buy have some solid fundamentals that may be overlooked. 
  • First Solar (FSLR): The company is likely to benefit as onshoring becomes the standard.  
  • Canadian Solar (CSIQ): If the company is right about its future earnings, this is a deeply discounted stock. 
  • Array Technologies (ARRY): The company’s signature arrays are growing faster than the broader solar market.  
best solar stocks to buy - The 3 Best Solar Stocks to Buy in Q2 2024

Source: Shutterstock

The solar industry will be a long-term beneficiary of the energy transition that’s happening throughout the world. Governments are flooding the sector with money and will need to continue investing in the sector. That’s one reason why it’s a good time to consider the best solar stocks to buy.  

According to data from the Solar Energy Industries Association, the U.S. solar market reported a 51% increase in gigawatts direct current (GWdc) of capacity. The 32.4 GWdc of capacity was the first time the industry exceeded 30 GWdc in a year.  

However, this growth wasn’t reflected in solar stocks, many of which had a terrible year in 2023. The good news is that profitable companies are trading at a discount as measured by their price-to-earnings (P/E) ratio. While this isn’t a perfect measurement, it gives you a solid reference point for deciding if a stock is appropriately valued.  

Solar stocks are growth stocks that generally carry a high P/E ratio. As of March 2024, the average P/E of 13 solar stocks tracked by Full Ratio was 41.67x. With that in mind, here are three of the best solar stocks to buy based on their comparatively low P/E ratio.  

First Solar (FSLR) 

Solar panels on rooftops in California, an increasingly common sight, solar stocks
Source: Simone Hogan /

First Solar (NASDAQ:FSLR) is a leading American solar technology company. The company is known for its thin film CadTel photovoltaic (PV) technology, which provides high efficiency at a low cost. It’s also the most eco-efficient PV solution that’s currently available. This is part of the company’s commitment to delivering Responsible Solar.  

That fits with the global focus on climate change. However, another reason for investors to consider First Solar is its made in America focus. Although the company has a global footprint, it has a heavy American presence with three factories in Ohio and a fourth expected to be operating in 2025.  

Then there’s the value proposition. First Solar has a forward P/E ration of just 11.35. The company delivered over $3.3 billion in revenue in 2023 and posted a full year of positive earnings. And analysts project the company will deliver 56% earnings growth in 2024.  

That growth may finally be showing up in the company’s stock price. FSLR stock is down 22.2% in the last 12 months, but it’s up 12.7% in the last 30 days.  

Canadian Solar (CSIQ) 

Solar panels on rooftops in California, an increasingly common sight, solar stocks
Source: Simone Hogan /

Canadian Solar (NASDAQ:CSIQ) is next on this list of solar stocks to buy. Many of the companies in the sector go beyond solar panels to include power inverters, batteries, and energy storage. This is the case with Canadian Solar which has a product portfolio that touches virtually every link in the solar supply chain. 

The company posted a record $7.2 billion in revenue in 2023 and the company has generated a cash balance of around $3 billion. On the other hand, earnings were down sharply in the last two quarters, which the company ties to lower average selling prices (ASPs) and inventory write-downs.  

That’s a big reason that CSIQ stock is down 53.5% in the last 12 months. However, Canadian Solar believes that is behind them and expect to see improvement in its gross margin.  

Analysts have a Hold rating on CSIQ stock with a consensus price target of $25.90. However, if the earnings growth of 53% happens as forecast, analysts are likely to rethink Canadian Solar’s valuation. The stock currently trades at just 6.7x forward earnings, making it a deep discount to the sector average. 

Array Technologies (ARRY) 

An image of a solar panel in the shape of a piggy bank on a rooftop; concept for solar stocks
Source: Andreas Prott / Shutterstock

Array Technologies (NASDAQ:ARRY) makes solar trackers that reposition solar panels to follow the sun. It’s a specific niche, but it’s one that has a large addressable market. In the company’s November 2023 investor presentation, the company stated that tracker demand was growing 30%-40% faster than the rest of the solar industry.  

One of the key metrics for the company’s business is levelized cost of energy (LCOE), and Array claims to deliver the lowest LCOE for its customer base over an expected 30-year life.  

The company’s revenue was down 4% year-over-year (YOY). However, earnings per share were up more than five times YOY. And Array made good use of that profit to strengthen its balance sheet including paying $87 billion in outstanding debt. Making the outlook better, the company is expected to grow earnings by 25% in the next year.  

ARRY stock has fairly heavy short interest of over 16%. That could present short-term headwinds. However, at just 13.67x forward earnings, it’s likely that earnings growth will win over analysts in the long run.  

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

Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019.

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