Governments around the world are focused on transitioning from fossil fuels to green energy…
But you wouldn’t know it based on the recent price action in the renewable energy sector.
In particular, solar stocks are cratering… and bankruptcies litter the industry landscape.
Today, we’ll examine why this sector is suffering so badly—despite the world’s promise of a greener tomorrow. And we’ll share how you can actually profit off the world’s energy demand.
Why solar stocks are crashing
The solar sector has been dealing with some alarming headlines lately…
On August 22, Canadian Solar (CSIQ) reported worse-than-expected earnings and provided downside guidance—sending the stock plunging by 15%.
Israeli-based company SolarEdge Technologies (SEDG) has also seen its stock price plummet—falling over 70% year to date.
What’s more, its CEO abruptly resigned this week, saying that the company required “new energy and leadership” in order to start turning things around. Sudden company leadership shakeups like this are always a major red flag.
It gets worse…
According to Solar Insure, over 100 companies in the solar industry have gone bankrupt between 2023 and 2024.
And if you were to look at a chart of the sector as a whole, you’d see an alarming downward trajectory.
This trend might be startling to those who believe in the alternative energy platform…
After all, it was two years ago that President Joe Biden signed the Inflation Reduction Act, which earmarked over $400 billion for green energy projects—including solar initiatives.
But there’s a problem… Some 40% of these projects face delays ranging from weeks to years, due to regulatory and logistical hurdles. The Biden Administration is working to reduce the red tape and get things moving along again… but progress has been slow.
What’s more, the alternative energy industry is grappling with competition from traditional, established energy sources—aka, oil—as global energy demand continues to rise.
Let’s look at the facts:
- Current global oil demand stands at 100 million barrels per day.
- ExxonMobil projects demand to remain at or above this level through 2050.
- Even if all vehicles sold by 2035 were electric, oil demand would only decrease to 2010 levels (85 million barrels per day).
- The rise of artificial intelligence is creating new, significant demand for energy across the globe.
Put simply, the transition away from fossil fuels to green energy will take a long time… and it’ll be a bumpy road.
Now, that’s not to say you should steer clear of the alternative energy sector. There are several ways investors can play the situation we’ve spelled out above…
Profit from rising energy demand
While the vast majority of alternative energy stocks might not pay off over the long term, there are some winning names worth considering for your portfolio, like Enphase Energy (ENPH), First Solar (FSLR), Sunrun (RUN), and Bloom Energy (BE).
Many alternative energy stocks also present great short-term trade opportunities.
But if you’re looking for the best buy-and-hold plays on surging energy demand, there’s no doubt traditional oil & gas will give you more bang for your buck. The energy giants like ExxonMobil (XOM) are always safe—and lucrative—plays.
We also have several energy plays within buy range in the Curzio Research Advisory portfolio. Join now to get immediate access to these opportunities.
