The U.S. Climate bill, which is the energy and climate provisions in the Inflation Reduction Act (IRA) of 2022, could prove to be a game changer for U.S. renewable energy stocks. In light of this bill, investors might be intrigued to know about the clean energy stocks that U.S. politicians traded in the past year. These companies include General Electric Company (NYSE: GE), Enphase Energy, Inc. (NASDAQ: ENPH), and SolarEdge Technologies, Inc. (NASDAQ: SEDG).
On August 7, 2022, the U.S. Senate passed the IRA 2022 after the Democrats bagged 51 favorable votes against 50 Republican votes opposing the bill. The IRA talks about climate, domestic energy production, and deficit reduction to curb inflation.
Under the ambit of the energy and climate provisions of IRA, the U.S. government will invest $369 billion in the renewable energy market. Its efforts will be directed at achieving a 40% reduction in carbon emissions by 2030, promoting clean sources of energy (including solar and wind), and boosting the use of electric vehicles in the country. Further, emphasis will also be laid on elevating the manufacturing capabilities of clean energy within the country.
This legislation could be a big win for President Joe Biden’s administration, which had stressed climate problems and the transition to renewable sources of energy as the possible solution from the very beginning of the term. The legislation will be discussed in the House of Representatives (this week) and thereafter forwarded to the President for signing.
What is the Best Renewable Energy Stock?
In light of this legislation, investors might be interested to know about the best renewable and green energy stocks in the United States. Using TipRanks’ Stock Comparison tool, we have prepared a consolidated chart of the companies mentioned above.
General Electric Company (NYSE: GE)
The $82.4-billion conglomerate has a segment dedicated to providing clean energy solutions (related to hydro, onshore and offshore wind, and others) to customers. In May 2022, Rohit Khanna, a U.S. Representative from California, purchased 13 to 192 shares of GE (valuing $1,000-15,000). The Democratic, who is one of the frequent traders in the stock market, conducted another Buy trade on the stock in September 2021.
Rob Wittman, a U.S. Representative from Virginia, bought 11 to 159 shares of GE in March 2022 for $1,000-$15,000. However, in June 2022, the Republican sold 16 to 230 GE stocks for $1,000 to $15,000. In addition to these four transactions, 14 more trades (Buys and Sells) were conducted by U.S. Representatives on GE stock, which declined 29.4% in the past year.
It is worth noting that the conglomerate is in the good books of analysts. On TipRanks, the company has a Moderate Buy consensus rating based on nine Buys and five Holds ratings. GE’s average price forecast is $86.85. Hedge funds are also in awe of this company, having increased their exposure by 11.2 million GE shares in the last quarter.
Enphase Energy, Inc. (NASDAQ: ENPH)
This $38.9-billion company is a producer of energy storage (battery) products, solar micro-inverters, and software required for monitoring energy generation. Josh Gottheimer, a House Representative from New Jersey, bought seven to 93 ENPH shares in February 2022. The Democrat’s Buy transaction is valued within the $1,000-$15,000 range.
Also, Democrat Rohit Khanna increased his exposure to Enphase Energy in January by purchasing seven to 102 Enphase Energy stocks for $1,000 to $15,000. In addition, Rohit Khanna conducted nine more trades (including Buy and Sell) on ENPH stock, which increased 58% in the past year. ENPH’s average price forecast is $267.93.
Analysts are unanimously optimistic about the prospects of Enphase Energy, which commands a Strong Buy consensus rating based on 12 Buys and three Holds. Also, hedge funds are Very Positive on the stock, having increased their holding by 328.4 thousand shares in the last quarter.
SolarEdge Technologies, Inc. (NASDAQ: SEDG)
With a market cap of $16.8 billion, the company has expertise in manufacturing solar inverters, energy storage (battery) products, and monitoring software. In January 2022, House Representative Rohit Khanna bought four to 58 shares of SolarEdge Technologies for $1,000 to $15,000. In the same month, the Democrat conducted two other Buy transactions on SEDG stock.
In addition to these three Buy trades, four Sell trades were conducted by two House Representatives in the past year. Shares of SEDG grew 5.5% in the past year.
The company has a Moderate Buy consensus rating based on eight Buys, two Holds, and one Sell. SEDG’s average price target is $366.18. In addition to analysts, hedge funds are optimistic about the prospects of SEDG as they bought 37.3 thousand shares of the company in the last quarter.
Concluding Remarks
Senate Majority Leader Senator Chuck Schumer referred to the legislation as “the boldest climate package in U.S. history.”
“This bill will kick-start an era of affordable, American-made clean energy for New York and the country. It is a game-changer. It is a turning point,” the Democrat from New York added. It is worth noting that Senator Chuck Schumer and Senator Joe Manchin, a Democrat from West Virginia, were sponsors of the bill in the U.S. Senate.
The remarks of Senator Chuck Schumer and the $369 billion investments promised under the energy and climate provisions of IRA mirror the robust prospects of the renewable energy stocks in the United States.
Gaining exposure to General Electric, Enphase Energy, and SolarEdge Technologies stocks could be a wise idea for prospective investors. These companies have performed well in the past (evident from the chart below), and their Smart Score of eight to 10 underpins their potential to outperform the broader market going forward.
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