Sam Badawi
Stock Analyst, Creator of Origins of Alpha & Quarterly Conviction
Solar equities stand to benefit as solar generation accelerates rapidly across Texas's ERCOT grid, becoming one of the state's fastest-growing electricity sources. The largest beneficiaries span the sector: NextPower's utility-scale trackers, First Solar's US-made thin-film modules, T1 Energy's domestic modules, Enphase's microinverters and storage, SolarEdge's inverters, Sunrun's residential solar, and HA Sustainable Infrastructure Capital's clean-energy financing. x.comÂ
Solar stocks trade at compressed valuations that make bearishness hard to justify. T1 Energy's G1_Dallas facility can produce over 20,000 modules a day, or 5 GW a year, roughly 10% of total US module manufacturing capacity. Shoals, First Solar, Enphase, NextPower and SolarEdge are also trading at compressed valuations. x.comÂ
SolarEdge and Enphase are both best positioned for solid-state transformers, and both are mid-term accumulation candidates, with no preference yet between them. Per a post the author replies to, Enphase uses Infineon's GaN bidirectional switches for its SST. Their charts suggest the monster move can continue. x.com x.comÂ
Solar is worth being heavily long through Enphase Energy and T1 Energy as it takes a larger share of US power. Per a quoted post, solar generated more US electricity than coal for the first time in May, 12.8% versus 12.2%, and solar plus storage made up 91% of new US power capacity added in Q1. x.comÂ
Enphase's US home-solar demand still has not stabilized, delaying its potential home-power recovery to 2027. Q4 revenue guidance of $225-255M is about 20% below the Street at the midpoint, and guided gross margin falls to 40-43% from 45%. Higher electricity costs from AI demand could eventually favor homes generating and storing power; its IQ Battery 5G stores about 50% more energy and costs about 40% less to make. The next two quarters look tough. x.com x.comÂ
T1 Energy is building the power infrastructure the AI and electrification buildout needs, while most investors chase compute stocks even though power is the bottleneck. It already runs a solar module plant in Dallas with real output and revenue, and is building a 5 GW-per-year solar cell plant in Austin. It is locking in supply with Corning for wafers and polysilicon and Nextracker for US-made frames. Austin is make-or-break: 10x potential needs it finished and more long-term contracts. x.comÂ
T1 Energy's $135M purchase of formerly licensed TOPCon IP could save $25M-$40M in annual fees and improve future margins. A waiver to import up to 1.725 GW of cells could bridge Dallas production until G2 Austin starts in Q1 2027. It could be one of the energy sector's most interesting turnarounds, but is not proven: $120M in convertible debt has been raised, more funding is needed, and further debt or equity could limit existing shareholders' upside. x.comÂ
Solar stocks are trades, not investments, because the industry is a perennial long-term loser despite the continued growth of solar power. As Warren Buffett said of airlines, the urge to invest should be resisted no matter how attractive Enphase, Sunrun, First Solar, SolarEdge, Nextracker, Array Technologies, Canadian Solar or even a broad solar ETF may look. That holds even as @optionscjp notes Enphase is turning toward commercial data center projects. x.comÂ
T1 Energy's fully domestic solar cell-to-module supply chain lets it capture all IRA tax incentives behind US tariff walls, giving it near-monopoly pricing leverage. Its 5GW G1 Dallas module plant earned Intertek CEA's top Tier-A bankability rating, key to long-term power contracts, and its 2.1GW G2 Austin cell plant targets Q4 2026. Buying KORE Power for about $32 million adds battery storage for solar-plus-storage sales to hyperscalers and $15-20 million of annual EBITDA from 2027. x.comÂ
Enphase and SolarEdge, dead home-solar stocks, have a credible path through a pivot to solid-state transformers, which @tailrisked calls the future of grid technology. It remains a very speculative play warranting only small positions. x.comÂ
T1 Energy is a capital-structure story before a solar story. Its Q2 adjusted EBITDA turned positive only because a one-time tariff refund was moved into a metric guided to exclude it. Modules went only to related parties, giving no independent read on price. SG&A now exceeds gross profit, cash burn soared, inventory ballooned, and the Austin cell fab slipped a quarter as its budget rose. The ramp and policy tailwind are real, but a funded Phase 1 and a third-party customer come first. x.comÂ
Enphase, SolarEdge and Fluence are being sold while their order books grow. Power consumption is expected to rise 65% in a year, yet these energy stocks fell 10% or more in a day; the market just does not see the demand yet. x.comÂ
