Here are Cowen's top picks in sustainable energy, including First Solar and Hannon Armstrong

Published Wed, Jun 3 20207:36 AM EDT

(This story is for CNBC PRO subscribers only.) The transition to cleaner forms of energy is well underway, and as interest grows in alternative sources of power, there are many ways for investors to benefit, according to Cowen. "We do not see a single silver bullet that will solve the world's energy crisis and, as such, believe there is room for multiple technologies to succeed over time, creating a large opportunity for investors to capitalize on next-generation energy technology investments," the firm said in a recent note to clients. "The future of energy is becoming distributed, decarbonized and digitalized." The firm said that some of the trends it is most excited about include renewable finance, smart grid networking as well as energy storage technology. With these themes in mind, Cowen compiled a list of top picks for investors with a long-term horizon. "We feel that this basket of companies is well positioned over multiple years, has defensible business models, and is poised for continued growth," the firm said. Here are some of the names on the list: First Solar Cowen has an outperform rating on shares of solar panel manufacturer First Solar . "We believe companies like First Solar in particular have a roadmap to lower cost to effectively make an acceptable financial return over the coming 2-3 years," Cowen analyst Jeffrey Osborne said. "First Solar continues to lead the pack in thin film efficiencies and in recent years the company has increased its efficiency at a rate 4x faster than multicrystaline [a type of silicon cell] solar panels out of China," he added. The firm has a $75 target on First Solar, which is 56% above where the stock currently trades. Shares are down 14% this year. Hannon Armstrong Cowen also has an outperform rating on shares of Hannon Armstrong , which finances alternative energy projects. The company's yield stands at 4.45%, which Cowen called attractive, while adding that the company looks "set to weather a challenging economic environment." "We see Hannon Armstrong's business model as well insulated from COVID-19 impact as the pipeline remains strong. With balance sheet rotation toward higher yielding assets complete and liquidity moves since quarter, HASI is primed to grow the balance sheet and grow Core EPS," Osborne said. The firm's $34 target represents a 10% upside to where shares currently trade. The stock is down 4% this year, but has rallied more than 16% in the last month. Itron Smart metering company Itron is also poised to benefit from the transition to cleaner energy, and Cowen sees shares rallying 18% to $78. The stock has shed more than 21% this year, but Cowen said that the pullback presents an attractive long-term buying opportunity. "Management has executed several restructuring initiatives and acquisitions, which well positions both the hardware and software & services sides of the business," Osborne said. TPI Composites While wind blade manufacturer TPI Composites has faced some disruptions due to Covid-19, Cowen said it still looks attractive over the long-term since it will benefit from the growing demand for wind power. "The company utilizes long-term supply agreements stipulating minimum and maximum pricing and volume terms, which improve revenue visibility and incentivize higher production levels," Cowen said. "Additionally, the company maintains a collaborative cost plan where design improvements and input fluctuations are shared with the OEM. This helps the company to drive capital efficiencies and improve margins over time." The firm has an outperform rating on the stock, and $24 price target, which represents a 13% upside. - CNBC's Michael Bloom contributed reporting.

A contractor for First Solar works on construction of the Tenaska Imperial Solar Energy Center South project in Imperial County, California.

Sam Hodgson | Bloomberg | Getty Images

(This story is for CNBC PRO subscribers only.)

The transition to cleaner forms of energy is well underway, and as interest grows in alternative sources of power, there are many ways for investors to benefit, according to Cowen.

"We do not see a single silver bullet that will solve the world's energy crisis and, as such, believe there is room for multiple technologies to succeed over time, creating a large opportunity for investors to capitalize on next-generation energy technology investments," the firm said in a recent note to clients. "The future of energy is becoming distributed, decarbonized and digitalized."

The firm said that some of the trends it is most excited about include renewable finance, smart grid networking as well as energy storage technology. With these themes in mind, Cowen compiled a list of top picks for investors with a long-term horizon. "We feel that this basket of companies is well positioned over multiple years, has defensible business models, and is poised for continued growth," the firm said.

Here are some of the names on the list: