Alternative energy stocks in 2018 are tapping into potential 500% industry growth, which will make them some of the best forward-looking investments on the market…
Not only is energy demand rising across the world, but alternative energy prices are falling while availability expands.
Alternative energy – or clean energy – encompasses hydropower, nuclear power, geothermal energy, biofuels, and, most importantly, solar and wind power.
Solar and wind will be the fastest-growing energy sectors in 2018, outpacing even traditional forms of power like natural gas and coal.
Here’s how solar and wind power will fuel clean energy stocks in 2018, plus two of the best clean energy stocks to own in 2018…
Solar and Wind Are Needed to Meet Growing Energy Demand
The U.S. Energy Information Administration (EIA) is forecasting global energy demand will rise 25% by 2040.
That demand can’t be met by traditional sources of energy – coal, gas, and oil – alone.
And the capacity to expand hydropower, nuclear, and geothermal energy is limited. For instance, it’s cumbersome to build a hydroelectric dam, and they require large enough bodies of water to sustain them, limiting their utility.
That leaves solar and wind power to meet the growing global energy demand and boost the best alternative energy stocks…
While solar and wind will grow thanks to rising demand, they have two baked-in advantages over traditional fuel sources, too.
First, wind and solar energy are clean.
Fossil fuels like coal, natural gas, and oil all produce carbon emissions.
That’s important, because people are increasingly less likely to prefer fuel sources with carbon emissions, whether it’s to reduce afternoon smog in large cities or to combat global warming.
According to Gallup, 63% of Americans believe global warming poses a serious problem, and a clear majority of them – 56% – believe protecting the environment is more important than economic growth.
That gives clean energy a clear advantage over fossil fuels when it comes to what the public wants.
Second, solar and wind power are unlimited.
As long as the sun rises and the wind blows, we’ll be able to harness solar and wind power. That’s not the case for fossil fuels like oil, gas, and coal.
As supplies for those fuels dwindle, their prices will rise. Plus, they get harder to extract. Fossil fuel producers extract the easily reached reserves first, but as these dry up they have to turn to more difficult deposits. This adds to their expense.
While these catalysts will help boost alternative energy stocks, they aren’t the main driver behind the coming shift to renewable energy…
Alternative Energy Is Now Cheaper Than Fossil Fuels
The cost of solar and wind energy has been one of the only hurdles preventing them from reaching widespread adoption. That’s changing…
According to the EIA, wind energy is now a cheaper source of electrical power than natural gas and coal.
And it’s not just in the United States…
Last weekend, Germany produced so much wind power that it was free. In fact, the surplus of wind power meant German utilities had to pay their customers to use electricity.
Wind generated 39,409 megawatts of electricity there on Saturday, which is more power than 40 nuclear reactors could make, according to Bloomberg.
But solar costs are falling fast, too.
Money Morning Global Energy Strategist Dr. Kent Moors says solar is achieving grid parity with traditional fuel sources across the globe. That means it’s just as cheap to use gas or coal to power electric plants.
Right now, solar energy has achieved grid parity in at least 20 states, including California, New York, and New Jersey.
Plus, the cost of solar power continues to fall.
Solar’s costs have dropped to 1/150th of their prices in the 1970s, and they fell 10% in 2016 alone.
With solar power becoming even cheaper than traditional sources of energy, it’s no surprise that the EIA projects solar power generation will grow 60% next year and a whopping 500% by 2040.
That means it’s still early for investors to get in on renewable energy stocks, and 2018 might be the last chance to get in before these stocks soar…
The 2 Best Alternative Energy Stocks in 2018
Moors’ favorite solar stock to play is China’s JinkoSolar Holding Co. Ltd. (NYSE: JKS).
JinkoSolar is a Chinese manufacturing company that started making solar wafers and photovoltaic (PV) cells back in 2006.
In just over a decade, JinkoSolar has grown to become the world’s third-largest PV cell supplier by capacity. And the growth keeps coming. In Q1 2017, JKS became the first PV maker to ship more than two gigawatts of PV modules in a single quarter. And JinkoSolar just beat its own record in Q2, shipping 2.8 gigawatts last quarter.
That sort of growth isn’t surprising considering China’s explosive solar industry, but JinkoSolar is also one of the best solar manufacturers in existence.
“This is the premier solar company in the world,” said Moors. “With global operation and good relations with the Chinese government, Jinko is perfectly positioned to continue growing.”
That means JinkoSolar is poised to grow right alongside China’s potential 700% solar industry forecast. And because China is already making 60% of the world’s PV cells, JinkoSolar is well-positioned to take on even more growth as the rest of the world turns to solar energy. In fact, the EIA projects the United States’ solar production alone will grow by over 500% by 2040.
Shares of JKS are trading at $27.22, and they’re up 78% this year already. But this is only the beginning for the world’s top solar company.
Woodward Inc. (Nasdaq: WWD) is another excellent clean energy stock to own.
Moors first recommended Woodward back in July 2015. Since then, it has risen more than 43%. And we think it’s about to head a lot higher now that the costs of wind and solar energy have dropped.
Woodward energy is connected to the solar and wind industries, but it’s not a traditional renewable energy company. Woodward is involved in the design and manufacture of the technology behind renewable energy plants, as well as all the components needed to generate such energy.
Because Woodward manufactures everything from wind turbines, PV cells, and the industrial equipment needed to turn solar and wind power into electricity, their products are needed industry-wide.
On top of that, Woodward is simply a well-run company with a proven track record. The company has a $4 billion market cap, and it beat earnings expectations every quarter last year. That’s thanks to its 9.74% profit margin, which means the company is comfortably turning revenue into profit.
Wall Street analysts predict its share price could rise more than 18% over the next year. But Woodward is heading even higher as renewable energy overtakes fossil fuels.
WWD currently trades at $78.35 a share.
— Money Morning Staff
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Source: Money Morning