Are you looking to make an impact when you invest?
Investing in energy storage stocks can be a great way to grow your money and build wealth while leaving a positive impact on the world.
As demand for renewable energy sources grows, energy and battery storage will become a vital part of the transition to clean energy – providing investors a great opportunity.
In this post, I'll explore what energy storage stocks are, the best energy storage stocks, and much more. Let's get started!
What Are Energy Storage Stocks?
Energy storage stocks are shares of companies working in the energy storage and renewable energy industries.
These industries are inextricably tied together due to renewable energy’s inherent limitations.
Renewable energy includes wind, solar, and hydropower, along with certain types of natural gas generation.
However, renewable energy has one major problem: storage.
It's one thing to take energy from the sun. It's another thing to store that energy so households and companies can use it when there isn't enough solar to go around, such as during the nighttime hours.
Therefore, many companies are investing heavily in energy storage solutions and research, such as more efficient batteries, new and more efficient energy grid technology, and so on.
Other companies, like Tesla, are focused on providing different but related energy-efficient and eco-friendly products, like high-capacity batteries and electric vehicles.
Why Invest in Energy Storage Stocks?
It’s a good idea to invest in energy storage stocks for the same reason it’s wise to invest in all other necessary commodities: stability.
Put simply, we will always need electricity.
But electricity will come more and more from renewable sources over the next several decades as fossil fuels are depreciated due to climate change and slowing public demand.
Replacing fossil fuels will come through renewable energy like solar and wind power.
Those companies currently developing the solutions necessary to store renewable energy will be well equipped and perfectly positioned to take advantage of the market shift.
As the energy storage market booms, so will your returns when you invest in energy storage companies.
There's more to energy storage technologies than simply the financial benefits, however.
These green energy stocks will also benefit the planet we all live on – something that everyone should care about.
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12 Best Energy Storage Stocks
NEE – NextEra Energy
NextEra Energy is arguably one of the top names in the clean energy industry overall because it is the biggest operator of electric utilities in the country.
It includes several subsidiary companies like Florida & Light and NextEra Energy Resources.
This company is one of the biggest renewable energy producers for wind and solar power. Of course, it has also contributed significantly to battery storage technology. This segment of the company is expected to grow rapidly over the next few years.
NEE is one of the fastest-growing energy storage stocks overall, making it a great addition to your portfolio.
It is a stable company that is unlikely to see major volatility or downsides over the foreseeable future because of how diverse it is.
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FLNC – Fluence Energy
Fluence Energy has a current market cap of almost $3 billion.
This company is actually a joint venture between AES (more on that energy storage stock below) and Siemens.
Fluence itself creates lithium-based energy storage solutions, such as batteries and battery software.
The company is also known for its digital platform called Fluence IQ.
This technology provides bidding optimization for energy storage assets for renewable resources like solar and wind power. To date, Fluence has installed over 3 GW of energy storage solutions across 30 distinct markets.
Fluence also has a current deal with QuantumScape, which hopes to develop solid-state batteries. While this technology is still hypothetical, its development would truly revolutionize the energy storage industry.
Though Fluence had a somewhat rough start when it went public in October 2021, the company has since reported high revenue numbers of $175 million in the last quarter of the same year.
EOSE – EOS Energy Enterprises
Eos Energy Enterprises was founded in 2008 and has since become a major player in the battery-based energy storage arena.
When it went public in 2020, the stock saw immediate growth thanks to a SPAC merger.
EOS doesn't develop lithium-ion batteries like Tesla.
Instead, it develops and provides zinc-based batteries. That's because zinc is a cheaper mineral than lithium (especially after the price hike in 2021). Zinc has very good power discharge properties and good thermal properties, so these batteries are not very likely to catch fire (which makes them attractive to automakers and other industries).
At the time of this writing, EOS is still a bit speculative since it doesn’t have very high revenue and no profits to speak of, but it could see tremendous growth in the renewable energy sector in the coming years.
It could be a good investment if you are willing to take a chance on a potential market leader for individuals or organizations who want cost-effective energy storage rather than the flashiest tech in the industry.
ENPH – Enphase Energy
Enphase Energy is a renewable energy storage company that provides different storage solutions to companies and homeowners alike.
It's one of the most important manufacturers of solar storage systems, specifically micro converters.
This technology combines solar energy generation, storage, and energy management in a one-size-fits-all system.
On top of that, Enphase Energy has contributed significantly to clean energy production and storage.
This is partially due to a partnership with Semper Solaris, which is another major industry leader for residential home solar and battery storage solutions.
Together, both companies are set to massively improve clean energy supplies in California and surrounding states.
Enphase Energy is looking to install new home energy systems in Arizona residences.
The company is set to double its deployment and potentially its profits over several years. Its stock market has risen recently, and many more analysts are starting to consider this stock as potentially “future proof”.
CWEN – Clearway Energy
Clearway Energy is a truly massive and leading company for renewable energy generation in the US.
It operates a series of facilities that use natural gas, wind, and solar power to provide clean energy to organizations and residences.
Some of the energy Clearway generates is sold through PPAs or power purchase agreements, which ensure that the company always has a steady cash flow. This not only allows the company to expand its operations in other sectors, but also makes it an attractive investment vehicle for shareholders.
So far, the company has delivered annual returns averaging 10% to its shareholders. These figures have doubled since a new board of directors and administration took over in 2018.
Clearway Energy is a very worthwhile consideration if you want to invest in green energy storage and development.
The company has expanded its cash flow and dividends over a very short period of time; we could see this cycle repeat itself soon as well.
FREY – FRERY Battery
FREYR Battery, a Norway-based company, has a market cap of $1.1 billion.
Because it’s developing important energy storage technology, namely low carbon, lithium-ion batteries.
These should enable high-quality stationary energy storage in industries such as aviation, marine transportation, and more.
This high-powered startup is currently constructing two massive “giga-factories” in the northern part of Norway. Ideally, the company will be able to produce 43 GW of power by 2025 and over 100 GW in 2030. That said, there’s no proof that the company will achieve its lofty goals.
Still, FREYR has drawn significant investor attention so far and has signed agreements with suppliers such as Glencore, which offers “green” metals to renewable energy companies.
While FREYR doesn’t generate any revenue quite yet, that could change soon. Consider adding FREYR Battery to your stock portfolio if you want to get in on the ground floor of a possibly lucrative company of the future.
AES – AES Corporation
AES Corporation is one of the older and more established renewable energy companies on this list.
It’s been in business for 30 years and is an international company: always a good sign for investors looking for stable investments that can withstand some market volatility.
This corporation provides different energy storage systems, like batteries and converters, to both businesses and homeowners.
Some analysts believe that AES is set to see a 25% increase in its performance and value over the next 12 to 24 months.
This is likely due to expansions to AES’ portfolio.
It has recently partnered with different energy storage tech providers, like Google and Fluence. That’s an important sign that AES Corporation is set to be a significant player in the worldwide energy storage industry.
Of course, who could forget Tesla Motors as one of the best energy storage stocks overall?
While most people think of Tesla as just a car manufacturer, part of the company’s prosperity comes from its focus on developing high-capacity electric batteries.
Tesla is one of the largest battery manufacturers around the world.
To double down on its eco-friendliness, Tesla uses solar power to produce electricity for its manufacturing facilities. Those lithium-ion batteries store the extra solar energy, which is then sold to homeowners or to other businesses.
The Megapack product is one of the best elements of this energy storage stock. It is a very high-capacity, rechargeable lithium-ion battery storage device.
More and more people and organizations are discovering just how effective this rechargeable battery is; its value grew by 32% in the last year.
Demand for Tesla products has skyrocketed in recent years, making it one of the best energy stocks to buy.
Brookfield Renewable is another massive producer of renewable energy, but it doesn’t just focus on energy generation from one source.
In fact, it generates renewable energy from solar, wind, and hydropower. For example, it has various onshore and offshore wind power facilities, rooftop solar facilities and manufacturing plants, and more.
Under a long-term power purchase agreement, or PPA, Brookfield Renewable sells most of its generated energy, guaranteeing a predictable, consistent cash flow. This is great both for the company and for its investors.
Brookfield Renewable is set to be a significant player in the renewable energy and storage industries for a long time to come. Some analysts estimate that its value will rise by 20% by 2025 – which is a great sign for the company.
It might be smart to get in on this stock now while it’s the most affordable it’ll likely ever be.
SolarEdge Technologies is revolutionizing the clean energy industry thanks to a new tech solution that enhances how efficient power conversion is in batteries and reduces the cost of renewable energy equipment as a result.
The company is also well known for its optimizers and inverters for converting direct current solar power to alternating current solar power.
This focus on cost reduction and energy efficiency is excellent news for investors looking for solid energy storage stocks. Cost is what primarily prevents people and companies from adopting renewable power, but SolarEdge is doubling down on manufacturing products that can overcome this hurdle.
Not only has this generated short-term profits for SolarEdge, but it may also help the company stay ahead of the competition for the foreseeable future.
It’s a financially flexible company that is currently trying to expand its production facilities to meet increasing demands for energy storage and power converting devices like the types it makes.
SolarEdge has also recently acquired companies and production facilities for electric vehicle charging, new battery storage solutions, and more. In the end, SolarEdge might be a great energy storage stock for investors looking for an optimistic instrument with good long-term prospects.
ON Semiconductor Corporation
ON Semiconductor Corporation is a S&P 500 company, well known throughout the energy industry as a supplier of industrial power, storage systems, and solar strings.
This massive corporation uses different technologies to provide new power solutions for individual clients and big companies alike.
It also creates a wide range of different products, which have applications in the communication, medical, computing, and other industries.
As a chipmaker, ON Semiconductor Corporation is set to increase its value considerably over the next few years. It’s experiencing high growth (which some analysts might consider it to be abnormally high).
Since ON Semiconductor Corporation is developing and refining solar batteries and other energy storage solutions, this could be a great stock if you want to invest in energy storage.
STEM – Stem Inc.
Last but not least is Stem: a company aiming to innovate in the energy storage industry through AI.
This company currently designs, manufactures, and then supplies its own brand of smart batteries to clients. They’re designed to lead to highly resilient energy grids, which should help to avoid incidents like the Texas power outage of 2021.
Furthermore, Stem is looking to acquire similar companies to increase its market share and dominance. For example, it recently acquired AlsoEnergy. This smaller company had some missing infrastructure that Stem lacked. Now it’s an all-in-one renewable energy provider.
But even before this acquisition, Stem demonstrated excellent numbers for investors. For example, it had an all-time high revenue of $127 million last year.
While Stem is a little younger and smaller than some other energy storage stocks, there's a lot to like here, and there are plenty of signs that it will continue to grow and dominate.
Energy storage stocks are set to grow in value significantly in the future for a multitude of reasons.
Investing in one or several of the above stocks could be very smart for your portfolio and its prosperity.
Whether you choose to invest in stable energy storage stocks or a few more innovative, riskier companies, it's undoubtedly smart to put your money in this up-and-coming sector of the stock market.
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