Energy Storage Stocks to Buy
Many investors see renewable energy as a source of growth for the next few decades. Energy companies are ramping up investments in wind, solar and other renewable energies. One thing that separates renewable energy from fossil fuels is that it needs to be stored differently. A great way to take advantage of the trend could be energy storage stocks.
Energy storage is needed because of the ups and downs of renewable energy sources. For instance, it is not always sunny over solar panels. Though some places are better for wind than others, the wind comes and goes.
When wind and sun energy are abundant and more than users need, the power is stored. Then, when wind and sun are scarce and cannot keep up with demand, users can access the stored energy. In other words, energy storage smooths out the ups and downs of the power given to us by mother nature.
Best Energy Storage Stocks
Wind and solar power are not new. Years ago, the technology used to convert energy was new and costly. In fact, companies used windmills over a century ago to grind wheat and cut lumber. More recently, wind and solar energy have been converting to electricity.
As the growth of renewable energy grew, so did the technology. The technology has advanced to a point where costs have come down to where full-scale renewable energy is possible.
Because these forms of renewable energy are more cost-effective, countries around the globe have begun to set renewable energy goals. For instance, the U.S. has set a goal of reducing greenhouse gas pollution by 2030. Other major countries have also joined the party. Officials in the European Union and China have also set similar goals.
Today, wind, solar and other renewable energy make up only a fraction of the energy produced around the globe. That means renewable energy and energy storage stocks may have a long road of growth ahead of them.
Another trend that could favor energy storage stocks is the trend of electric cars. Electric cars use electricity storage like a gas car uses a fuel tank. The driver plugs the electric car in, and the battery stores energy. Growth in electric cars could also mean growth in energy storage stocks.
Energy Storage Stocks
Industry analysts expect energy storage to grow at a rapid 31% through 2030. They expect the U.S. to make up almost half of the growth. If the potential growth of energy storage stocks has interested you, here are a few stocks to consider.
- Eos Energy Enterprises (Nasdaq: EOSE): Eos makes lithium-ion batteries. The company makes the batteries using zinc. The batteries are one of the most efficient battery systems out there. One of the main problems with lithium-ion batteries is that they can sometimes catch fire. Eos’s batteries are non-flammable. Though Eos is early in developing its battery systems, its systems could be used in industrial settings and renewables.
- Tesla (Nasdaq: TSLA): Readers may know Tesla for their popular electric vehicles. But the company also makes rechargeable lithium-ion batteries for electric vehicles and energy storage for power plants. Tesla’s battery sales have been growing fast. In fact, the company began building a new facility to make more batteries to keep up with demand.
- Stem (NYSE: STEM): Stem makes batteries that go into electrical power grids. The company has grown sales at an eye-popping rate over the last few years. Though the company is still very young, it could see huge growth. The stock could benefit as utility companies move faster toward renewable energy sources.
Like the renewable energy market, many energy storage stocks are new. These companies may still be making products that have not been tested yet. When new companies start, they need a huge amount of money to get things going. If the company cannot make enough sales to cover its costs, it could fold before it ever gets off the ground.
Even if the company grows sales right off the bat, they still have to make a profit for years to come. If an energy storage company cannot make a profit even as sales go up, the stock could suffer.
While you’re looking, you probably saw that there are many energy storage stocks out there. You’re not alone if you’re looking for energy storage stocks because of the enormous potential growth. Many of the folks who notice the trend are the folks who start energy storage companies.
All of these energy storage companies may be competing with each other. When these companies are fighting for the same customers, it may mean they will lower the price of their products to win new business. When this happens, it could make it even harder to make a profit.
About BJ Cook
BJ Cook is a long-time stock nerd. He has held several roles in the equity research world and earned the right to use the CFA designation in 2014. When he’s not writing for Investment U, you can find him searching for new investment ideas. Outside the investment community, BJ is a die-hard Cubs fan.