Many investors are intrigued by President Biden's longer term climate change goals; he has already reversed Trump administration environmental and energy regulations, while rejoining the Paris Climate Agreement, points out Bernie Schaeffer, editor of Schaeffer's Investment Research.

The new administration has lofty $2 trillion goals to fight climate change, and that includes a heavy investment in solar and hydrogen economies. That means stocks such as Plug Power Inc. (PLUG) and First Solar, Inc. (FSLR) could stand to see some legislative tailwinds in the coming years.

Shorter term, both PLUG and FSLR are two of Schaeffer's top 2021 picks in the alternative energy space. PLUG has had a historic year, scoring a 1,553% year-over-year gain. That's not a misprint.

And if the COVID-19 vaccine sends oil prices higher in 2021— as the economy reopens and demand increases — the security may become even more popular, with investors quickly moving into renewable energy stocks as U.S. consumers experience sticker shock after a long period of low gas prices.

While Plug Power stock is currently trading below record levels, the shares broke out above multi-year highs in August, when the security rallied past potential resistance at the $12 level — the site of its 2011 and 2014 peaks.

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A short squeeze could fuel additional gains for the security going into 2021, too, as this year’s positive price action did very little to convince shorts about the company’s growth prospects.

In fact, short interest hit a multi-year high halfway through November, and the 66.53 million shares sold short account for a whopping 28.9% of the stock’s available float.

FSLR also emerged as a strong performer in 2020 and closed out the year with a 61.3% year-to-date gain. Even better news is that the stock is already bouncing off its 50-day moving average.

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What’s more, declining short interest has acted as a tailwind since the security’s March 18, 2020 three-year low of $28.47.

And given that 8.9% of the stock’s available float is still sold short, traders are likely to continue hitting the exits going forward. In fact, short interest has already dropped 3.5% during the past two reporting periods.

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