Are Solar Stocks Still Worth Buying in 2026? A Comprehensive Analysis of Market Opportunities and Risks

In 2026, are solar stocks worth buying? This question is increasingly being asked by investors. As the global energy transition accelerates and policy support intensifies, the solar industry presents new investment opportunities. This article will analyze the investment value of solar stocks from three perspectives: market fundamentals, stock selection, and risk assessment.

As a key component of renewable energy, solar power is experiencing a new growth cycle driven by carbon neutrality goals. Meanwhile, supply chain pressures and policy uncertainties faced by the industry last year are gradually easing, laying a foundation for a rebound in 2026.

Accelerating Energy Transition, Solar Industry Poised for Growth

Global commitment to combating climate change is driving profound changes in energy structures. The U.S. Energy Information Administration (EIA) forecasts continued growth in U.S. solar capacity, with sunny regions like Texas becoming major contributors to new installations. Federal policies such as the Inflation Reduction Act provide tax credits to businesses and households, further stimulating market investment.

Compared to wind and other renewables, solar has clear advantages: widespread resource availability, low system maintenance costs, and diverse application scenarios. Recent advances in photovoltaic technology have significantly reduced costs per unit, making solar power the most economical energy source in many regions. Data from the International Energy Agency (IEA) shows solar’s share in global clean energy is rising steadily, with a promising market outlook.

However, the industry also faces challenges: policy changes across countries, increasing market competition, rapid technological iteration, and geopolitical tensions could impact corporate profitability. Investors need to recognize opportunities while carefully assessing risks.

Leading U.S. Solar Stocks: High Growth Potential and Policy Benefits

The U.S. solar market is large, nurturing several industry leaders. These top companies leverage technological advantages, policy support, and long-term contracts to remain resilient amid market fluctuations.

First Solar (FSLR): A Solid Tech Fortress

Founded in 1999 and headquartered in sunny Arizona, First Solar specializes in high-efficiency thin-film photovoltaic modules. Its core strength lies in its unique thin-film technology, which performs better than traditional silicon-based products under low light and high temperatures, and at lower costs per unit.

As a domestic U.S. solar manufacturer, First Solar benefits directly from the Inflation Reduction Act’s policies, domestic manufacturing incentives, and import tariffs. The company has long-term supply agreements with multiple U.S. utilities, ensuring stable revenue.

Valuations by Wall Street analysts, based on various scenarios, suggest that under a baseline scenario, steady growth could keep earnings around $8 per share; optimistically, with large solar projects and residential PV demand rebounding, earnings could rise to $10 per share by 2026. Recent 12-month target prices average above $210, indicating significant upside potential.

Nextracker (NXT): Leader in Tracking System Innovation

Nextracker supplies smart tracking systems for utility-scale solar plants, optimizing PV panel orientation in real-time to maximize energy capture and improve efficiency. This is its core value proposition and competitive advantage.

The company recently reported financial results well above expectations, causing its stock to surge. Management has expressed confidence in strong global demand for solar solutions and plans to expand investments. According to analyst forecasts, the target price exceeds $60, with considerable upside potential.

Enphase Energy (ENPH): Comprehensive Energy Management Solutions

Enphase specializes in microinverters and energy management software, providing complete solar solutions for homes. The company’s revenue grew 26% year-over-year in Q4 2024, with earnings soaring.

However, it faces challenges from U.S.-China trade tensions, as its supply chain relies heavily on Chinese batteries. Potential tariffs could pressure margins in 2025-2026. On the bright side, the company is actively diversifying its supply sources, aiming for most batteries to come from non-Chinese sources by mid-2026, which should mitigate long-term tariff risks. Wall Street’s target price remains above $50.

Other U.S. Options

Brookfield Renewable (BEP) attracts investors with stable dividends and high yield. Array Technologies and Shoals Technologies benefit from falling steel costs improving margins. Sunrun, despite short-term market pressures, shows strong cash flow worth monitoring long-term.

Taiwanese Solar Concept Stocks: Steady Growth Investment Choices

Taiwan plays a vital role in the solar supply chain, with several listed companies integral to the ecosystem.

Delta Electronics (2308): Power Solutions Powerhouse

In 2024, Delta reported steady performance, with total revenue exceeding NT$420 billion, gross margin above 32%, and net profit of NT$35.2 billion, demonstrating strong financial health. Its EPS and ROE rank among industry leaders.

Morgan Stanley and other international banks are optimistic about Delta’s high-voltage DC power solutions for AI data centers and industrial applications, raising target prices to NT$485 and maintaining an overweight rating. Analysts expect growth to continue into 2027 as global demand for high-end power solutions rises.

ChungHwa Telecom (1513): Beneficiary of Grid Upgrades

ChungHwa’s 2024 results were impressive, with net profit and EPS reaching record highs. In Q1 2025, orders from Taiwan Power Company’s resilient grid projects continued to boost revenue.

FactSet surveys show analysts have raised target prices above NT$210. As a direct beneficiary of grid upgrades amid Taiwan’s energy transition, ChungHwa’s position remains solid.

Other Taiwanese Stocks

Companies like China Rental-KY and Array Technologies also play important roles in the solar supply chain, with valuation and cash flow performance值得关注。

Industry Challenges and Opportunities: Risks to Know Before Investing

Despite promising prospects, investors must be aware of industry challenges.

In 2024, the U.S. solar industry faced headwinds: a slowdown in residential solar, high interest rates dampening investment, and intensifying Chinese competition. Many companies posted losses, with some leading firms’ stock prices falling sharply or facing difficulties.

These challenges will persist into 2025-2026. Factors such as Federal Reserve policies, import tariffs, and supply chain stability will influence the industry. Additionally, support policies like the Inflation Reduction Act may be adjusted or rescinded, posing risks to subsidy-dependent companies.

However, the long-term trend of energy transition remains unchanged. Breakthroughs in technology, declining costs, and new applications continue to energize the industry.

Assessing the Investment Value of Solar Stocks and Recommendations

Returning to the initial question: Are solar stocks still worth buying in 2026? The answer is yes, but with selectivity.

Selection Criteria:

Prioritize leading companies with core technological advantages, stable customer bases, and healthy cash flows. For example, First Solar’s thin-film tech, Nextracker’s tracking systems, and Delta’s power solutions represent industry leaders.

Evaluate their resilience to policy risks. Companies with long-term supply contracts, cost competitiveness, and diversified supply chains are better positioned to withstand policy shifts and external shocks.

Monitor industry fundamentals. As technological progress and cost reductions improve solar’s economics, market penetration will increase, supporting growth for top players.

Risk Warnings:

Solar stock prices are sensitive to policy and interest rate changes, with potential short-term volatility. Long-term holding is advisable to avoid market noise.

Stay attentive to company fundamentals. Supply chain risks, rising competition, and technological changes could impact long-term performance.

Overall Advice:

Solar stocks remain attractive in 2026, especially those with solid earnings, technological leadership, and strong policy barriers. U.S. stocks like First Solar, Nextracker, and Enphase, as well as Taiwanese stocks like Delta and ChungHwa, merit in-depth research.

Investing wisely involves timing and method. Based on personal risk tolerance, choose suitable stocks, consider dollar-cost averaging rather than lump-sum purchases, and stay diversified. With the ongoing global energy shift, the long-term outlook for solar remains broad and promising.