'A giant fusion reactor in the sky': Elon Musk told Joe Rogan the whole US could be powered with 100 x 100 miles of solar — and it’s ‘not hard.’ 3 stocks to bet on that sunny outlook
Due to the complex interplay between environmental concerns, economic interests and geopolitical dynamics, energy is a highly contentious topic. But according to Tesla CEO Elon Musk, there’s a great energy source that can fulfill all our needs right above us: the sun.
“You could actually power the entire United States with 100 miles by 100 miles of solar,” Musk said during a recent episode of “The Joe Rogan Experience” podcast.
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Host Joe Rogan was intrigued by the idea, asking, “Really? So you could just pick some dead spot, cover that sucker up with solar panels and charge the whole country?”
“Absolutely,” Musk responded. “We need batteries, but yes.”
Musk explained that “it’s not hard” and “very feasible” to power the entire country with solar because the sun is converting more than four million tons of mass to energy every second and requires no maintenance.
“That thing just works. We have a giant fusion reactor in the sky,” he said. "If you can generate energy from solar panels and store it with batteries, you can have energy 24 hours a day."
Musk’s perspective not only highlights technological possibilities, but also draws attention to the solar industry’s financial potential. In fact, many companies are already helping people harness the power of the sun.
The U.S. was expected to add a record 32 gigawatts of new solar capacity by the end of 2023, a 52% increase from 2022, according to a September report from the Solar Energy Industries Association (SEIA) and Wood Mackenzie. The latter expects total operating solar capacity to grow from 153 GW today to 375 GW by 2028.
Here’s a look at three solar stocks in which Wall Street sees major upside.
Enphase Energy
Enphase (ENPH) is one of the world’s leading suppliers of microinverter-based solar and battery systems.
The stock has had an interesting journey. At the beginning of 2020, shares were trading at around $29 per share. Today, they’re above $130.
While that’s a sizable gain in less than four years, it’s far from smooth sailing. For instance, Enphase shares surged 45% in 2022, but they’ve tumbled 46% in 2023.
In the most recent quarter, the company shipped 3,905,239 microinverters and generated $551.1 million of revenue. Earnings came in at a dollar per share.
Goldman Sachs analyst Brian Lee has a “buy” rating on Enphase and a price target of $158, implying a potential upside of around 16%.
First Solar
First Solar (FSLR) produces solar panels for use in utility-scale solar power plants.
It’s another player in the segment that attracted substantial investor attention in recent years.
In 2022, First Solar shares surged 72%, in stark contrast to the S&P 500’s 19.4% drop during the same period.
Shares have fared less well in 2023, rising around 18% year to date.
In Q3, the company reported revenue of $801 million, a decrease of about $10 million from the second quarter. Management primarily attributed this decline to a reduction in the volume of modules sold.
In October, JPMorgan analyst Mark Strouse upgraded First Solar from “neutral” to “overweight.” The analyst has a price target of $220 on the company, implying a potential upside of 28%.
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Tesla
Solar is probably not the first word that comes to mind when people think of Musk’s own company, Tesla (TSLA)— its primary business is making electric vehicles.
However, Tesla deserves a spot on this list because it acquired SolarCity in 2016. The company has since integrated solar energy into its broader mission of accelerating the transition to sustainable energy.
Tesla offers solar panels for both residential and commercial use, as well as energy storage solutions like the Powerwall and Powerpack.
The company is contributing to the adoption of solar energy.
“Despite supply chain challenges, we deployed 348 MW of solar in 2022, the highest deployment since 2017,” Tesla said in a 2023 investor update.
Morgan Stanley analyst Adam Jonas has an “overweight” rating on Tesla and a price target of $380 — 45% above where the stock sits today.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
