3 I’m sorry that you have to sell shares of energy companies while you still can

The price of energy, especially in the consumer market, can be a major factor influencing inflation. After all, the type of energy a region or country depends on can significantly impact the cost of goods and services.

For example, in oil-rich states in the US and around the world, the price of crude oil is usually lower due to the lack of transportation and storage costs. This in turn results in cheaper petroleum derivatives such as gasoline and diesel, ending up with cheaper products that require crude oil for their synthesis. Elsewhere, cheap and available uranium allows nuclear power to be used as an option to provide even cheaper energy and therefore electricity.

However, not all energy suppliers are created equal, and some energy companies are more susceptible to macroeconomic trends than others. Whether wind, solar, nuclear or natural gas, no form of energy is immune to the effects of broader regional impacts on its supply. Therefore, three energy stocks should be sold due to the risk of rising production costs and, ultimately, reduced competitiveness.

Invesco Solar ETF (TAN)

For decades, solar energy has been touted as one of the cleanest forms of energy. Even Elon Musk has repeatedly called for using the United States’ vast desert areas to power the nation. He says 10,000-square-mile solar farms could power the entire country. While this is technically impossible with current technology or resources, this type of talk has made investors optimistic about publicly traded solar ETFs like Invesco Solar ETF (NYSEARCA:TAN).

Unfortunately for the fund, investor interest in solar power has waned over the past year, leading to a 32% loss over the past 12 months. As with all ETFs, TAN provides investors with insight into the overall adoption and viability of a particular sector. In this case, solar energy as a whole has failed to meet expectations, while nuclear energy continues to gain popularity around the world. Therefore, Invesco’s solar ETF is unlikely to deliver medium to long-term returns, as solar energy may remain a niche energy source for the foreseeable future.

Global X Wind Energy ETF (WNDY)

Another clean energy ETF, the so-called Global X Wind Energy ETF (NASDAQ:WNDY), almost 20% of its value has disappeared over the last year, and almost 50% over the last five years. This is largely due to the sheer costs of scaling wind energy. Considering that the largest turbines cost $400 million and generate only 12 megawatts, it’s easy to see why a wind farm-based ETF would struggle to achieve any goal.

Moreover, compared to nuclear energy, this industry appears to be even less profitable. For comparison, one average U.S. nuclear reactor produces as much energy as 431 2.32 MW turbines (equivalent to an average-sized industrial-scale turbine). These commercial turbines cost an average of $3 million to produce, which extrapolates to nearly $1.3 billion and hundreds of acres of land, equivalent to one operating nuclear reactor.

While the cost of megawatt-hours of wind and solar power is often lower than nuclear power, the capital investment needed to achieve optimal energy production is simply not on WNDY’s side. Therefore, with limited medium-term profitability, WNDY is among the energy companies worth selling.

Ameren (AEE)

Despite an attractive 3.8% dividend and a long-standing reputation among US energy companies, Amerena (NYSE:AEE) their best days may be behind them. This isn’t simply because the stock has lost 12% of its value in the last year; Relations with coal-fired power plants may be a bigger problem.

While the company has pledged to gradually close its largest and most polluting power plants, the capital investment required to overcome losses in energy production will likely reduce stock growth in the short term. Moreover, while the goal is lofty and will likely improve the company’s long-term trajectory, a second quarter of declining revenue and net income could result in a sell-off that pushes the price even lower.

Thus, Ameren is among the energy companies that should be sold for now, until a new minimum level is found, after which it may be a strong candidate for a more future-oriented portfolio.

As of the date of publication, Viktor Zarev did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com Publishing guidelines.