These Solar Stocks Have Plummeted: 3 Reasons You Should Buy Now

It’s been a great year for solar energy investors. The Invesco Solar ETF (NYSEMKT:TAN), which owns a stake in more than 20 companies focused primarily on some area of solar, is up 55% so far this year. Two stocks held in the Invesco Solar ETF that are responsible for a lot of those gains are Enphase Energy (NASDAQ:ENPH) and SunPower (NASDAQ:SPWR), up 358% and 102% respectively.

First Solar (NASDAQ:FSLR), another component of the Invesco Solar ETF, has also had a strong year. At this writing shares are up 32%; that may not match the performance of some of its solar peers, but it’s almost 70% better than the 19% in total returns the S&P 500 has generated so far in 2019.

But more recently, Enphase, SunPower, and First Solar have fallen sharply. Those stellar returns to date would be even better if not for a recent swoon across the solar sector that’s seen the three lose 38%, 33%, and 17% from their 2019 highs. I think that’s made for an excellent opportunity to buy, for anyone who’s willing and able to hold them.

There’s a multiyear opportunity ahead of the solar industry, and all three of these companies are positioned to profit. Three key reasons underpin my thesis that these are “buy on the dip” stocks worth owning for the long term:

1. A growing global middle class will require substantial expansion in energy production.
2. Solar costs continue to fall while efficiencies get better.
3. Energy storage technology is quickly expanding the percentage of the world’s energy needs that solar can meet.

Here’s how these three things are set to make SunPower, First Solar, and Enphase Energy moneymaking stocks worth buying now and owning for years to come.

This huge trend will drive substantial growth in solar power

In the U.S., the middle class hasn’t had a very good run in recent decades. Inflation has outpaced middle-class wages for years, and income and wealth inequity have see the rich get richer and the rest of us fight over what’s left.

However, in many of the world’s up-and-coming markets, the middle class is booming. According to a 2017 Brookings report, the middle class is expected to make up more than half the world’s population by 2020, and then grow by another one billion people by 2028.

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