Renewable energy stocks might not be among the best performers in the recent past. However, there is no doubt that the sector will continue to grow beyond the current decade. For a long-term investor, this is the best time to consider exposure to undervalued renewable energy stocks.

Talking about the industry potential, global renewable energy investment was $486 billion in 2022. The International Renewable Energy Agency believes that annual global investment should reach $1.3 trillion by 2030.

Further, global renewable power generation capacity would need to expand more than three-fold between now and the end of the decade. Clearly, the market opportunity is huge and some of the best renewable energy stocks have millionaire-maker potential.

For now, there are several undervalued renewable energy stocks that can quickly double. Let’s discuss the fundamental factors that are likely to support the rally.

First Solar (FSLR)

First Solar (NASDAQ:FSLR) stock has surged by 45% year-to-date. The meaningful rally comes after a deep correction in the second half of 2023. With FSLR stock trading at a forward P/E of 18.3, I expect further positive price-action in the coming quarters.

It’s important to note that the rally in FSLR stock is backed by a strong business outlook. As of Q1 2024, the company reported an order backlog of 78.3GW that extends through 2030. Further, the solar company has booking opportunities of 72.8GW. With a strong order backlog and pipeline, revenue growth is likely to be robust in the coming years.

To cater to the incremental demand, First Solar is also working on manufacturing capacity expansion. By the end of 2026, the company expects to have 14 GW of U.S. solar capacity and 11 GW internationally. This will position the company to increase deliveries and support top-line growth.

Plug Power (PLUG)

Plug Power (NASDAQ:PLUG) stock has seen a meltdown of 74% in the last 12 months. Sentiments have been over bearish for the stock and short interest as a percentage of free-float remains high at 27%. Besides a potential meme euphoria driven rally, there are fundamental reasons to be positive at current levels.

It’s important to note that Plug Power had chalked out ambitious growth plans through 2030. However, execution and financing were concerns. Additionally, cash burn impacted stock sentiment.

The hydrogen energy company has however seen some respite from a funding perspective. Last month, the U.S. Department of Energy approved a conditional loan commitment of $1.66 billion. The funds will be used for development, construction and ownership of up to six green hydrogen production facilities. This is likely to provide some respite to PLUG stock.

Recently, Plug Power announced that it has reached 7.5GW in global basic engineering and design package contracts. This offering was introduced two years ago. Therefore, as the backlog builds, there is visibility for long term growth.

Canadian Solar (CSIQ)

Canadian Solar (NASDAQ:CSIQ) is another renewable energy stock that trades at oversold levels. After a correction of 58% in the last 12 months, CSIQ stock trades at a forward P/E of 7.4. I see the solar energy stock easily doubling from current levels.

As an overview, Canadian Solar operates under two business heads. CSI Solar is a vertically integrated manufacturer with a current contracted backlog of $2.5 billion. Further, Recurrent Energy focuses on global project development and has a healthy order backlog of 56GWh. These two businesses provide clear revenue visibility.

I believe that geographic diversification is a key growth catalyst for the company. To put things into perspective, 54% of Q1 2024 revenue was from China and North America. Therefore, a significant 46% of revenue coming from the rest of the world. With ample scope for growth in emerging markets, the outlook is positive for Canadian Solar.

Without doubt, macroeconomic headwinds and higher interest rates have impacted growth. However, with the world moving towards expansionary policies, I expect better days for Canadian Solar and CSIQ stock.

On the date of publication, Faisal Humayun did not hold (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 InvestorPlace.com Publishing Guidelines.