3 Energy Storage Stocks Charging the Renewable Energy Sector

Key Points

• Tesla’s energy storage solutions are becoming more than just an add-on to the company’s automotive business.
• NextEra Energy may face some impacts from tariffs, but the company’s growing battery storage business continues to grow.
• Enphase Energy is a pure-play energy storage company that really needs the sun to start shining on the solar industry. 

If you're investing in renewable energy stocks, you’ll want to find the sweet spot. You don’t want to keep investing in ideas whose time has come or may never come. At the same time, investing in promising future technologies like nuclear energy may expose investors to more volatility than they’re comfortable taking on. 

The “sweet spot” is the technologies that are getting ready to move right now. In 2025, energy storage is one area to consider. Demand for data centers driven by AI is a key factor. The World Economic Forum cites that battery storage climbed 20% to exceed $50 billion in 2024. 

Concerns exist regarding federal regulation, which may, ironically, increase in a Trump administration. At the very least, the administration may remove some of the tax incentives driving growth. There are also concerns over tariffs that could impact countries where companies source their components. 

Nevertheless, while there are few certainties in the market, energy storage stocks have economic and regulatory tailwinds at their back. Here are three of the top stocks for investors to consider. 

Tesla’s Energy Storage Is Becoming More Than Just an Add-On

The bull case for Tesla Inc. NASDAQ: TSLA has always been that Tesla is more than a car company. An important part of that “more” is the company’s energy storage business.

Tesla’s energy storage business consists of its Powerwall and Megapack technology. Although this is still a small part of the company’s business compared to its namesake automobiles, it has the potential for much more growth. In its third-quarter earnings report, Tesla reported that its energy business had achieved a record gross margin of 30.5%.

The company also reported its second consecutive quarter of record Powerwall deployments. And it also noted that its ramping up Powerwall production at its Lathrop, California factory.

Admittedly, at over $413 per share and well above its 50- and 250-day simple moving averages, you’ll want to wait for a pullback before entering a position. However, because TSLA stock is notoriously volatile, your patience could be rewarded. 

NextEra’s Catalysts Outweigh Short-Term Concerns

NextEra Energy Inc. NYSE: NEE is the largest electric utility holding company in the United States. However, it’s also known as one of the world’s leading clean energy providers, including battery storage. The company offers a range of solutions including lithium-ion batteries, flow batteries, and solid oxide fuel cells. 

The company also offers an All-in-One Home Energy Storage System that uses lithium-ion batteries and an inverter to store the extra energy generated by renewable sources, usually solar panels. The company doesn’t break out battery storage exclusively, but its Energy Resources division generated $2.58 billion in revenue or about 34% of its total topline number.

NEE stock is up over 14% in the last 12 months despite dropping below its 50-day simple moving average after reporting earnings in October. However, there are concerns that certain elements of the company’s renewable business will be affected by potential tariffs. For its part, the company says it has “safe-harbored” most of its projects through 2029.

Don’t Let Short-Term Headwinds Cloud Your Opinion of Enphase Energy

Enphase Energy Inc. NASDAQ: ENPH is a pure-play energy storage company. The company’s microinverters and home energy storage solutions have a simple goal. That is, to harness energy from solar panels so that homeowners and businesses have a reliable power source in the evenings or when the sun isn’t shining.

The stock is down nearly 81% from its all-time high hit in November 2022. The most significant reason for the poor performance is that the fortunes of Enphase are irrevocably tied to the solar industry. And that’s been a rough ride as the supply chain and rising interest rates have impacted demand. There are also concerns about the amount of competition in the company’s business. 

Where Enphase has excelled, however, is running a profitable business. Despite revenue dropping precipitously in the last two years, the company is still solidly profitable and is generating positive free cash flow.

As of January 16, 2025, ENPH stock is trading at around $63 per share. That’s over 50% below the consensus price target of $95.59. And despite the sell-off, the stock is within about 10% of its 50-day moving average.