2025 Solar Investment Landscape: Opportunities and Challenges for Leading Stocks

Will 2025 be the year to position in solar industry leaders? The answer depends on your judgment of the global energy transition process. As countries’ commitments to net-zero emissions become more solid, and solar technology costs continue to decline, the clean energy sector is迎來 a structural opportunity. This article will outline the investment logic of solar industry leaders and筛选 the most competitive targets in US and Taiwan stocks.

Why Solar Still Deserves Attention

Compared to wind energy and other green energies, solar has three core advantages. First, solar resources are naturally abundant and widely distributed, with high utilization rates. Second, after system installation, operating costs are low, and maintenance requirements are simple. Third, recent technological breakthroughs have significantly improved chip conversion efficiency, extending applicable scenarios from residential rooftops to large power stations.

However, the industry also faces tangible challenges—policy change risks, increased market competition, and accelerated technological iteration—all of which could impact investment returns.

Taiwan Solar Industry Leaders Layout

Delta Electronics: High-growth power solutions provider

Delta Electronics’ full-year revenue in 2024 was NT$421.1 billion, up 5% year-over-year. More noteworthy is the stable gross margin of 32.4%, with a net profit of NT$35.2 billion, and a net profit margin of 8.4%. Earnings per share (EPS) are NT$13.56, and return on equity (ROE) remains at 16.4%. These figures fully reflect the company’s solid profitability.

Morgan Stanley recently raised its target price from NT$440 to NT$485, maintaining an overweight rating. Analysts are particularly optimistic about the company’s 800V high-voltage DC power solutions for AI data centers and industrial sectors—these are the future growth engines of the market.

ZTE Electric: Turning point with record-breaking performance

ZTE Electric’s net profit in 2024 was NT$3.623 billion, a 128% increase year-over-year, setting a record high. EPS also hit a new high of NT$7.33. In Q1 2025, revenue reached NT$6.448 billion, the highest for the same period, although gross margin was pressured by increased engineering project share, with EPS pulling back from NT$1.93 to NT$1.78.

Analyst consensus has shifted—6 analysts raised their target prices, with the median rising from NT$182.5 to NT$195.5, a 7.12% increase. The highest valuation is NT$211, and the lowest is NT$167, indicating the market remains optimistic about its long-term prospects.

Outlook for US Solar Industry Leaders

First Solar: Defensive advantage of thin-film technology

Founded in 1999 and headquartered in Arizona—the US state with the most sunlight annually—First Solar listed on NASDAQ in 2006. The company’s competitiveness stems from its proprietary advanced thin-film module technology—performing significantly better than traditional silicon-based products in low-light and high-temperature environments.

This leading US photovoltaic manufacturer is benefiting from the Inflation Reduction Act ((IRA)), holding long-term supply contracts with multiple utilities, and enjoying government support for domestic manufacturing and import component tariffs.

Trefis Team’s model shows that under a baseline scenario with 5% annual revenue growth and stable profit margins, EPS could stay around $8. Using a 22-25x P/E ratio, the reasonable valuation is $175-$200. In an optimistic scenario—if the Fed cuts interest rates and large photovoltaic projects are invested in, coupled with rising residential PV demand—EPS could reach $10 in 2026, corresponding to a stock price of $250.

26 Wall Street analysts’ average 12-month target price is $210.12 (range $157–$275), representing a 26.31% upside from the current stock price of $166.35.

Nextracker: Growth dark horse of tracking systems

Nextracker specializes in intelligent tracking systems for utility-scale solar farms. Its innovation lies in real-time adjustment of PV panel orientation to maximize sunlight capture, significantly boosting power generation efficiency. Recently, the company has become a star in the solar leader camp—its quarterly earnings on May 15th far exceeded expectations, causing the stock to jump 12%, and it remains at a high level.

Founder Dan Shugar emphasizes that the current excellent performance lays a foundation for continued growth this year and provides strategic investment security.

18 Wall Street analysts’ average 12-month target price is $63.94 (range $52–$71), with a 12.33% upside potential from the current price of $56.92.

Enphase Energy: Testing the energy management revolution

Enphase Energy was founded in 2006 and is headquartered in California. Its core business is microinverter systems to improve solar conversion efficiency, with recent expansion into energy storage and management software.

However, since 2024, the company has faced significant impacts—its battery supply chain heavily depends on China (95% of lithium iron phosphate batteries are sourced from China), and US-China tariffs have pressured its stock price. Short-term gross margin pressures are notable; Q2 is expected to see a 200 basis point decline, with impacts possibly expanding to 600–800 basis points in Q3.

The good news is that these impacts are phased. The company is actively diversifying its supply chain, and by Q2 2026, most battery supplies are expected to come from non-China sources.

25 Wall Street analysts’ average 12-month target price is $50.82 (range $31.11–$84), with a 23.41% potential upside from the current price of $41.18.

Reflection on Investment Performance of Solar Industry Leaders

The past decade’s historical trends reveal the risk characteristics of the solar sector. The trajectory recorded by the Invesco Solar ETF (TAN) warrants reflection:

2008 Financial Crisis destroyed the initial bubble. Despite strong global policy support, the rapid decline in Chinese export low-cost products quickly reversed market sentiment, leading to a collective decline in leading stocks.

2010s Volatility saw repeated tug-of-war between technological progress and policy uncertainty. US anti-dumping measures and increased global competition caused turbulence, but later climate action momentum helped stabilize prices.

Post-2020 Turning Point post-pandemic economic stimulus measures and green energy investments surged, pushing solar leader stocks to new highs.

2024 Reversal reminds investors not to be complacent. That year, the US residential solar market declined 32%, hit by high interest rates and intensified Chinese competition, with TAN falling 37.62% for the year. Stock differentiation was evident—SunPower plunged 70% and went bankrupt, SolarEdge fell from $80 to $20, only First Solar showed resilience.

Core Investment Framework

Participating in solar leader stocks requires recognizing three points:

First, high policy dependence Support policies like the Inflation Reduction Act face uncertainty, and policy changes can trigger significant volatility.

Second, rapid technological iteration While efficiency improvements and cost reductions are long-term positives, they may short-term depress valuations.

Third, structural opportunities still exist Global commitments to net-zero are firm, and long-term demand fundamentals are upward, with solar leader stocks still occupying a core position in energy transition.

Choosing leaders with technological moat, long-term contracts, and diversified revenue structures is the best strategy to cope with uncertainties.