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Best Renewable Energy Stocks UK – Invest with 0% Commission

Savvy investors always need to be on the lookout for themes and industries which are likely to lead the next bull markets and which will give rise to the next big true market leaders capable of producing outsized gains.

In this article, we will present you with the best renewable energy stocks UK for 2021, and explain in detail what are the driving forces behind each of the companies and the reasons why they could potentially be a great addition to your investment portfolio.

Best Renewable Energy Stocks UK List

As there are hundreds of companies that operate in this landscape, finding the best of the best is not an easy task. That is why we have narrowed down the list of the best renewable energy stocks UK for you to consider purchasing in 2021 from several different sectors within the renewable energy space:

  1. Daqo New Energy (DQ) – Leading component provider with huge upside potential – Invest now
  2. First Solar (FSLR) – One of the best from the West – Invest now
  3. Enphase (ENPH) – Super strong fundamentals – Invest now
  4. SolarEdge Technologies (SEDG) – An industry pioneer
  5. Tesla (TSLA) – Synonym for EV space worldwide
  6. Nio (NIO) – 1500% gain since 2018 for China’s rising star
  7. BYD Co. Ltd. (BYDDF) – Warren Buffet’s top pick
  8. Plug Power (PLUG) – Bullish Hydrogen fuel cell play
  9. Shoals Technologies Group (SHLS) – Recent IPO with big upside potential
  10. Nextera Energy Partners (NEP) – Fortune 500 material

Best Renewable Energy Stocks UK Reviewed

Although the renewable energy sector stands out as one of the hottest investing themes to be involved in, investors should take into consideration the recent surge in the stock price of the abovementioned companies, and time their purchase after the sound bases have formed which would allow for the next leg up and big profit opportunities.  

1. Daqo New Energy (DQ) – Leading component provider with huge upside potential

The China-based polysilicon manufacturer has been the star of 2020 with more than 1000% gain on the back of surging sales volume of more than 200% increase for several quarters coupled with an increase in production efficiency shown in expanding pre-tax profit margin of 16% and annual return on equity of 22%.

The healthy correction that is taking place at the time of this writing could provide investors with the chance to participate in the next leg up, especially as the easing of restrictions to Chinese companies that occurred with the new U.S. President should in the longer term reduce the price of products and thereby increase demand for them. Once the volatility of the stock declines and forms a tighter base as it did in the October-December period, investors could look for the opportunity to get into the stock when the increase in price with simultaneous higher volume bars on up-days start showing up on the chart, as these are the clear sign of institutions coming back to the stock and trying to push its price up. 

DQ renewable energy stock price chart

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2. First Solar (FSLR) – One of the best from the West

Even though the fundamental ratios of FSLR stock don’t appear as convincing as the other stocks in this group, that might soon change as the U.S. company, in its recent February quarterly report, provided a first-quarter outlook above analyst estimates as the earnings trend continues to improve and point to a clear shift from previous 5 years of a generally negative trend.

The information that the number of renewable energy investment funds that own shares of FSLR increased by 22% in the last reported quarter from the previous one, shows that institutions took notice of that.

FSLR renewable energy stock price chart

With some looming concerns about forced-labor programs in China, First Solar could be in a position with its strong cash war chest to benefit from possible restrictions that could be placed on Chinese solar content, as its production and factories are located in the U.S. and Southeast Asia.

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3. Enphase (ENPH) – Super strong fundamentals

The maker of home energy solutions for the microinverter-based solar-plus-storage systems continued with a strong demand for its product in the 4th quarter of 2020. Riding high on the solar energy wave and boosted by the $679.4 million in cash, the company also successfully completed the acquisition of Sofdesk, which is a leading provider of design software for residential solar installers and roofing companies and has expanded its production capacities with a new factory located in India.

With the continuously strong trend of earnings-per-share and sales growth, along with the amazing 50% of annual return on equity and 25% pre-tax margin, Enphase is truly a leader in the solar group.

ENPH renewable energy stock price chart

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4. SolarEdge Technologies (SEDG) – An industry pioneer

Founded in 2006, SolarEdge is one of the longest-lasting names in the solar energy industry that continues to shine to date. Even as the global pandemic impacted demand for its products, shares of the company have certainly not budged as they have appreciated close to 400% in 2020. With an expected first-quarter revenue drop of -8%, and lower margin and sales projections, the company is somewhat less appealing than Enphase at this moment.

However, as SolarEdge looks to expand its business line to the European EV market as the supplier of powertrain units and batteries for Fiat e-Ducato van model, an additional $100 – $120 million in revenue is expected to be added to the company’s balance sheet in 2021 which would be a significant boost for the longer-term stock price. 

SEDG renewable energy stock price chart

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5. Tesla (TSLA) – Synonym for EV space worldwide

The potential for so-called “combustion engine killer” is still huge! Tesla is by and large a leader in the EV sector. The company is leaps and bounds over its both traditional car-manufacturing, as well as software competitors (Google, Apple, Baidu are all trying to get in the EV space) when it comes to high-quality data collection of real-world miles driven which is crucial for the future of autonomous driving and ride-sharing aspects of transportation which the future holds.

From the financial standpoint, the company has been increasing its sales (46% sales increase in the last quarter vs the 36% 3-Year sales growth), increasing its earnings per share (EPS) growth by close to triple-digit percent, raising its estimate revisions for future periods, while at the same time Tesla remains strongly favored by the world’s leading innovation-oriented fund ARK Invest and Cathie Wood (they already predicted, and bet big, that Tesla would go on an amazing run in 2017, while most of Wall Street was bearish on the company at the time) due to its unique place among the electric vehicle market.

With the 20% rise of Funds that own Tesla shares (compared to the previous quarter) and 6 quarters of increasing fund ownership, it certainly points to what the “smart” money is looking at.

TSLA renewable energy stock price chart

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6. Nio (NIO) – 1500% gain since 2018 for China’s rising star

What separates NIO as a brand is its intention to build a whole “lifestyle” ecosystem around its name. The company appears greatly to the younger and tech-savvy Chinese generation and has pushed even deeper with NIO hubs and coffee shops, aimed at creating a community, evidenced by a more than 100% increase in year-over-year units sold.

The push into the subscription-based model and “battery as a service”, in a country that still does not have fixed parking charging stations and advance public charging infrastructure is a revolutionary move for the company that is trying to position itself as a viable competitor of Tesla in China, the world’s largest market for electric vehicles. With China’s aim to spread out battery swapping and charging networks throughout the country and go mostly green by 2035, the tailwinds for successful investment in Nio are clear.

Institutional investors are already using the market correction to accumulate company shares again, as evidenced by 8 quarters of rising fund ownership!

NIO renewable energy stock price chart

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7. BYD Co. Ltd. (BYDDF) – Warren Buffet’s top pick

It definitely means something when an investing guru like Warren Buffet decides to make his BYD position more than twice larger than a General Motors one. Berkshire Hathaway owns roughly 25% of all BYD outstanding flow and doesn’t show any signs of trimming it down.

With a 500% rise in price in 2020 and a powerful comeback after the market staged a comeback, BYD has rewarded its investors generously. The future prospects look great as the last quarter sales rise (29% compared to the same quarter last year) far outpace the 4% 3-Year sales growth rate. Coupled with rising EPS growth estimates and low debt burden, the fundamental side of the story looks extremely promising. As the total addressable demand has only been slightly scratched, car companies at the front of the clean energy movement are finding themselves at the beginning stages of massive profit opportunities ahead. 

BYDDF renewable energy stock price chart

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8. Plug Power (PLUG) – Bullish Hydrogen fuel cell play

The provider of hydrogen fuel cell systems used in electric mobility and stationary power markets definitely has a huge potential. After being present mostly on U.S and European markets, in January 2021, the deal was announced with South Korean company SK Group, which would expand the reach of Plug’s products and services to Asian markets. The investment of $1.5 billion for around 10% of Plug Power will massively increase resources for new R&D projects and lead to new and better products down the road.

In the same month, a memorandum of understanding regarding the launch of the joint venture was signed with French automobile maker Renault. In the last report, management raised its outlook for 2021 from $450 million to $475 million as well as its 2024 gross billings target for as much as 40% from its prior outlook.

PLUG renewable energy stock price chart

As the hydrogen stock corrected by close to 50% in the last month, investors should put it on their radar as a high-quality candidate for this year.

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9. Shoals Technologies Group (SHLS) – Recent IPO with big upside potential

It takes something really good to get the attention of the market that was running red hot such as this one at the beginning of 2021.               

The company that produces solar power components and equipment used in the electric power transition from solar panels all the way to the power grid at the end, was priced above its initial public offering range due to big investor demand ($25 vs the expected $22-$23), and is the biggest ever solar IPO is just that type of company! Several major Wall Street firms already issued the coverage of the stock with buy/outperform ratings.

SHLS renewable energy stock price chart

Shoals has close to 54% market position within its niche, and in the recent note to clients, Goldman Sachs estimates 40% compound annual growth of revenues in the next 3 years. What also stands out is that the company is profitable, and has been raising its sales by 30% both in the last quarter as well as in the 1 and a 3 year time period. Earnings per share and revenue also grew at an impressive double-digit rate, while at the same time its debt to equity ratio remains in the low teens, pointing towards a capable and quality management at the helm.

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10. Nextera Energy Partners (NEP) – Fortune 500 material

A part of the elite Fortune 500 list, NextEra Energy is the world’s largest private generator of wind and solar renewable energy through a wide array of activities like development, construction, and operation of projects, as well as energy storage services. Its subsidiary Nextera energy Partners focuses on running a portfolio of wind and solar projects, along with natural gas pipelines in the U.S. and Canada.

With the rise in both revenue from -5% to 3% and earnings-per-share from 0% to 70%, followed by the upward estimates revisions and 7 quarters of rising fund ownership of its shares, Nextera has plenty to offer to investors in time to come. Major green infrastructure projects planned by the Biden administration, and a complete revamp of the entire energy industry will be the catalysts for the stock rise.

NEP renewable energy stock price chart

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Are Renewable Energy Stocks a Good Investment? 

The answer to this question is a definite yes!

As the global pandemic has accelerated the shift toward sustainability and as a consequence, shares of all of these companies benefited immensely. Despite their recent sell-off, which was to be expected after their huge run in 2020, longer-term prospects remain positive as these are industry disruptors, and it could be argued that the future belongs to these types of high-growth companies within the favorable thematic environment.

As the high beta stocks tend to correct more than the overall market, for investors who are confident about these names and their business prospects, the correction could provide the chance to initiate new positions within these candidates or to add on to already existing ones, and they have the potential to represent crown jewels in investor’s portfolios in years to come as they are strongly positioned within the trend in sustainable development and “green” all, which is here to stay and will only accelerate in the following period globally. 

Best Stock Brokers to Buy Renewable Energy Stocks

Now we’ve reviewed the best renewable energy stocks UK, let’s take a look at the best stock brokers where you can invest in these companies with zero fees.

1. eToro – Buy the Best Renewable energy Stocks With No Commission

eToro commodity broker

Our opinion is that eToro stands out as the best UK platform for buying stocks. With an abundance of various renewable energy company stocks that you can invest in via CFDs, not only on the UK markets but also both the NYSE and the NASDAQ, as well as most popular ETFs used to gain exposure to space, this FCA-regulated broker is a perfect choice.

Whether you opt for individual company stocks on a DIY basis or the industry-oriented ETF, eToro does not charge any dealing charges, and you won’t pay an annual fee, leaving more money on the table for you.

Another strong selling point for eToro’s is its standout features like social and copy trading tools. Known as a pioneer of social trading among brokers, eToro allows more than 12 million of its users to engage in various investing topics. Having a quality peer group is a valuable tool for beginning investors as it represents another way to learn the tools of the job. 

The broker allows for the fractional shares investing, with the minimum investment per stock trade of $50 (about £36) which enables you to get involved in the best renewable companies without having to go above your financial comfort zone and invest heavily in the beginning. Other than the bid-ask spread and a $5 withdrawal fee, the only other charge that you need to factor in is a 0.5% conversion fee, as your GBP deposit would have to be converted into USD for trading purposes.

Pros:

  • Super user-friendly online stock broker
  • Buy stocks without paying any commission or share dealing charges
  • 800+ stocks to buy or trade as CFDs
  • Some of the best renewable energy stocks
  • Social and copy trading
  • Accepts PayPal
  • Licensed by the FCA

Cons:

  • Not suitable for advanced traders that like to perform technical analysis

67% of retail investor accounts lose money when trading CFDs with this provider.

2. Libertex – Best CFD Trading Platform to Trade Renewable Energy Stocks

Unlike eToro, Libertex is not a traditional stockbroker. This is because this trading platform specializes exclusively in CFDs (contracts-for-differences), which are tradable instruments offered by brokers that track the real-time price of the respective asset. Should the underlying asset increase/decrease by 1%, so would the CFD that is tracking it.

With that said, CFD brokers like Libertex do offer the benefit of leverage and short selling, that you won’t find at some conventional share dealing platforms.

Applying leverage means that you can trade shares with more money than you have in your Libertex account. As per FCA regulations, this is capped at a 1:5 ratio – a £100 balance would allow for a £500 trading position. However, always be aware that leverage is a double-edged sword so approach it carefully.

Regarding the short-selling option, this means that you can enter a position on the desired stock if you want to bet that it will fall in value. If it does, you will make a profit as you will be able to repurchase it later on at a lower price than you have paid for. Libertex also stands out among other platforms with its policy to not charge any spread, but only a small trading commission on each position.

In terms of payments, Libertex allows you to deposit funds with a debit/credit card, bank wire, or e-wallet. Additionally, the minimum deposit is just £10, which is great if you want to try stock CFDs for the first time. When it comes to safety, Libertex has been offering CFD trading services since the late 1990s. It is also regulated by CySEC.

Pros:

  • Zero spread CFD trading
  • Good educational resources
  • Long established broker
  • Compatible with MT4
  • Competive spreads

Cons:

  • Only offers CFDs

83% of retail investors lose money trading CFDs at this site

How to Buy the Best Renewable Energy Stocks UK – Tutorial

Ready to buy renewable energy stocks in the UK? We’ll show you how to get started using eToro, which offers access to global markets and 0% commission trades.

1. Create an Account

To get started, head to eToro’s website and click ‘Join Now’ to create a new account. You can sign in using your Google or Facebook accounts, or create a new account using your email address.Click Join Now to open a new eToro account

67% of retail investor accounts lose money when trading CFDs with this provider.

Whichever method you choose, eToro requires you to verify your identity in order to comply with UK anti-money laundering rules. You can complete this step online by uploading a copy of your passport or driver’s license along with a copy of a recent utility bill or bank statement that shows your address.

2. Deposit Funds

The next step is to fund your new eToro account. eToro accepts a variety of payment methods, including credit or debit cards, bank transfers, or e-wallets like Neteller and Skrill. Just keep in mind that eToro requires you to deposit at least £140 when you open a new account.eToro deposit

3. Buy Shares

Now you’re ready to buy renewable energy stocks with your eToro account. Search for the stock you want to purchase from your dashboard, and click on ‘Trade’ when it appears in the drop-down menu. That will open a new order form.Search Plug Power on eToro

67% of retail investor accounts lose money when trading CFDs with this provider.

In the order form, enter how much money you want to invest in the renewable energy stock. You can select stop loss or take profit levels if they are part of your strategy. In addition, if you’re trading CFDs, eToro allows you to select leverage up to 5:1.

Once your trade is ready, click ‘Open Position’ to buy your first renewable energy stock.

Best Renewable Energy Stocks – Conclusion

In summary, the February rotation from high-flying growth stocks to “economy opening” types can provide investors a chance to buy shares of the best renewable energy stocks at a more sensible valuation than at the start of the year. Whether you choose to invest in individual names on this list or opt for encompassing ETF allocation, make sure that you perform your own due diligence as well and build your conviction in the investment.

Once you have done that, using an FCA-regulated broker like eToro would be a good option, as its commission-free structure, low initial upfront investment amount, and tight bid-ask spreads, all work to your advantage by minimizing the execution costs, and benefiting your bottom line.

You can buy renewable energy stocks at eToro in less than 10 minutes by clicking on the link below!

eToro – Buy Renewable Energy Stocks with 0% Commission

67% of retail investor accounts lose money when trading CFDs with this provider.

FAQs

Are these companies traded on major stock exchanges?

Should I be worried that most of these companies do not pay dividends?

Is it better to bet on a new company like Tesla or Nio, or go with the older brand names like General Motors or Volkswagen?

What is the best way to invest in the renewable energy theme?

Is it possible to bet on the fall of renewable energy share prices?

About Alan Draper PRO INVESTOR

Alan is the Chief Editor of Buyshares.co.za and is responsible for ensuring all the content on our site is accurate, relevant and helpful. He is an experienced editor who has worked for several leading online publications. Alan is also a writer and is an expert on the stock market.

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