The 5 Top Renewable Energy Stocks to Own Right Now

The top 5 renewable energy stocks to own right now may surprise.

Because not all of them are really considered “renewable energy stocks.”

Instead, some of these are not renewable energy stocks at all, but rather stocks that are capitalizing on the continued growth of the renewable energy market.

To be sure, the renewable energy market is still growing rapidly, despite some pushback here in the U.S.  This as a result of President Trump’s energy policy positions, which seem to include trivializing the value renewable energy provides to our energy economy.

Still, solar and wind performed quite well in January.  This, according to the latest data from the EIA’s Electric Power Monthly report.

Here are some highlights:

• Renewable energy sources produced 18% more electricity in January than a year prior.  Most of this is the result of utility-scale solar expanding by 58% and wind by 25%.
• Electrical generation by the combination of all renewables was 9.3% more than that provided by coal and 26.7% more than that produced by the nation’s nuclear power plants. 
• The mix of renewables retained its position as the second largest source of electrical generation, behind only natural gas.

Whether or not Trump will succeed in impeding domestic solar and wind energy growth is still yet to be determined.  The president has been very clear about his distaste for renewables, but there are an awful lot of red states dependent on the domestic renewable energy market.

It’ll also be interesting to see how the Trump administration justifies its attempts to derail solar and wind growth in favor of natural gas, which actually saw a 2.3% drop in output in January.

Sadly, partisan buffoonery is front and center in Washington these days.  And decisions are being made based not on that which is best for the country, but instead, that which is best for a political or social ideology.  Ultimately, I believe the market will have the final decision.  And as long as solar and wind production costs continue to fall, it will be quite difficult to justify eschewing this growing portion of our energy economy.

That being said, the safest way to play renewable stocks today is to own shares of the companies that provide key materials for renewable energy projects, but are also not 100% reliant upon those projects.

Top renewable energy stocks that aren’t really renewable energy stocks

There are three key materials that are absolutely necessary for the renewable energy market to continue its growth trajectory.  To clarify, I’m including electric vehicles in this definition of renewable energy, too.

The three key materials we’re talking about here are…

• Copper
• Silver
• Cobalt

Now if you’re a regular reader of the pages, you know that for the past five years or so, I’ve been screaming from the rooftops to buy copper.

Here’s how copper has performed since 2020:

This, dear reader, is the result of a projected increase in power demand connected to the growing demand from AI and data centers, as well as homes and businesses now using more electricity for heat and transportation. 

The majority of new electricity generation is coming from renewable energy.  Solar, wind, battery backup, and all the transmission and distribution projects required to facilitate this uptick in production and consumption.  And all of this stuff requires massive amounts of copper.

Meanwhile, as demand for copper increases,  copper supplies are expected to fall short by around 15% by 2030.  Indeed, this presents an excellent opportunity to profit from this supply and demand imbalance. 

Indeed, there are any number of copper stocks that you can invest in to take advantage of this situation.  Although I’m most bullish on these three in particular:

• Freeport-McMoRan (NYSE: FCX) 
• Lundin Mining (OTCBB: LUNMF)
• Southern Copper (NYSE:SCCO) 

Getting Serious with Silver

Silver has long been considered a metal used equally for industrial purposes and investment-grade categories (i.e. – coins, jewelry, etc.).  But that 50/50 balance is changing.  In fact, industrial demand for silver now represents about 60% of total silver demand.  And this figure is likely to continue growing as a result of rapidly growing markets that require large amounts of silver to operate.  Particularly solar and electric vehicles.

Couple that with the fact that silver is typically a safe haven asset in times of uncertainty.  And indeed, these are times of uncertainty. 

Historically speaking, silver almost always shines when bad things happen in the world.

Take a look at some of the more memorable examples:

• Iranian Hostage Crisis / Russia Invades Afghanistan — silver climbs 395%
• Falklands Island War — silver climbs 9%
• Iraq invades Kuwait — silver climbs 15%
• U.S. attacks Iraq — silver climbs 13%
• 9/11 — silver climbs 11%
• Iraq war — silver climbs 14%
• Madrid terror attacks — silver climbs 17%
• Russia invades Crimea — silver climbs 14%
• North Korea missile crisis — silver climbs 17%
• Attack on Saudi oil facilities — silver climbs 25%
• Russia invades Ukraine — silver climbs 17%
• Hammas attacks Israel — silver climbs 18%

Since the start of the year, silver has climbed more than 17%.  And with this massive trade war currently underway, we could see silver hit $40 by the end of the year.

One of the best ways to play this is through Silvercorp Metals (NYSE: SVM).

Silvercorp is a Canada-based mining company with significant silver production and exploration in China — the world’s largest consumer of silver thanks in large part to the country’s dominance in the solar and electronics markets.  It’s also the third largest producer of silver in the world.

Silvercorp is currently trading at around $3.80 a share.  My one-year price target on Silvercorp is $5.00, thereby presenting a potential gain of 31.5%.

The Cobalt Conundrum

Electric vehicle batteries and large-scale energy storage projects require large amounts of cobalt.  But at the moment, there is no shortage of cobalt.  There is, however, a shortage of cobalt refineries outside of China.

To be sure, China currently refines about 90% of the world’s cobalt.  But thanks to a company called Electra Battery Materials (NASDAQ:  ELBM), the first cobalt refinery in North America will soon be operational.  

As Canada and the U.S. seek to distance themselves from China’s cobalt refining monopoly, Electra has become the only game in town.  And it’s vastly undervalued. In fact, Alliance Global Partners recently adjusted its price target on ELBM to $2.10 from $1.00.  That’s an increase of 110%!

Not bad at all.  Although once the stock reaches $2.10, it would be fairly valued.  So really, this is more of a short-term opportunity to get some quick cash.

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