Renewable energy stocks are one of the best current purchases we can make in today’s financial climate. Renewable stocks are smart, long-term, clean energy investments for the potential multi-year growth of investors’ portfolios. It’s also a hot political issue globally.
People in thousands of different societies have realized the impact global warming has on our world.
Polar ice caps are melting, temperatures are rising, and fossil fuels are dwindling. If we continue on this same path without changes in how we live, Earth as we know it will devolve past the point of no return.
The New Energy Landscape
Renewable energy refers to alternative energy sources. This includes hydroelectric power, wind energy (from wind turbines), solar energy, and much more.
This industry has experienced rapid growth in the past few years. This growth is due to heightened awareness and social concern for the environment. Investors have beneficial financial expectations when investing in this fast-growing category of stocks.
The clean energy industry has experienced exponential growth in the past few years. This has increased power generating capacity by almost 10% in the last 10 years.
Many companies are now using renewable resources to power their facilities. They are also investing in energy development projects and using responsible energy-harnessing. Additionally, they are producing policies to gain the favor of the public at large.
The best clean energy stocks are determined by analyzing market growth, sustainability ratings, risk assessments, and stock reviews by reputable financial professionals.
Researching the wide variety of renewable energy businesses and the current stock market can provide enough information to find the best short-term and long-term investment options for beginner and advanced investors.
These are the methods we utilized to determine the top twelve best renewable energy stocks to invest in today:
- Analyze the ESG risk rating to see the potential for future investment loss
- Research the controversy level to determine any issues within the company
- Determine sources of capital and consistent income for ethical issues
- Analyze the sustainability rating in relation to ethical practices and long-term investment possibilities
- Research the technology used by the companies to see the focus on green solutions
Here are our top picks for the best renewable energy investments.
Best Renewable Energy Stocks To Invest In Today
1. Brookfield Renewable: Best Investment for Hydroelectric Power
Brookfield Renewable is one of the world’s leaders in producing sustainable hydroelectric power. This company is focused on developing its onshore and offshore wind energy, rooftop solar projects, and energy storage. It offers sustainable PPAs that can boost an individual’s diversity in their portfolio.
Brookfield Renewable is turning all of its resources towards hydroelectric and renewable energy. Their performance record makes potential investors feel comfortable investing in the business.
In the last 10 years, Brookfield Renewable has increased its annual rate by 10% and experienced over 5% of annual growth. This showcases the positives of what’s to come in the following years.
The future of Brookfield Renewable continues to look positive. The projected annual return until 2025 is about 25%. If you had any doubts about investing in hydroelectric power, Brookfield Renewable can change your mind.
Pros:
- High yield of 3.72%
- 4 out of 5 ESG risk rating
- ESG risk rating is 16.06 (low on the scale)
- Potential for long-term growth
Cons:
- According to Morningstar, contains 1 controversy (business ethics)
See Related: Solar Farm Income Per Acre: How Much Can You Earn?
2. Clearway Energy: Best Investment for Natural Gas
Clearway Energy is the best investment for long-term growth and portfolio diversity. This is a great option for eco-conscious investors looking to invest in renewable energy facilities,
This business sells its wind, solar, and natural gas power regularly to sustain a consistent cash flow and investment return. The company is a developer and operator of renewable energy projects, with solar and wind assets in 25 states.
Clearway Energy had high annual returns percentage of 10% since it first came onto the market. After getting new ownership in 2018 by Global Infrastructure Partners, the returns have increased even more. The change in ownership should encourage investors to take a chance on this stock because its growth is consistent.
Lastly, Clearway Energy is a great option for individuals looking to balance a socially conscious renewable energy stock with the potential to diversify their portfolio. Setting their sights on reaching upwards of 8% annual dividend growth in the upcoming 5 years, this stock is a smart choice with very little risk for beginner investors.
Pros:
- Focuses on conventional generation and thermal businesses
- Invests in gas, oil, solar, and wind-fueled facilities
- 4 out of 5 for ESG risk rating
- 15.86 low ESG risk
Cons:
- According to Morningstar, 1 incident on the controversy scale (customer concerns)
See Related: Best Electric Vehicle Charging Station Stocks
3. First Solar: Best Investment for Solar Panels
Chances are you have seen solar panels on top of someone’s house before. This means the person is eco-conscious, spending more on a long-term alternative to non-renewable fuels and high oil and gas bills. For eco-conscious individuals, investing in First Solar is the best choice for putting money towards solar energy.
First Solar creates extremely small, thin-film solar panels, creating more usable solar energy than other manufacturing creations.
The small size and thin width of the solar panels make First Solar’s panels ideal for both small and large-scale projects. These thin panels are suitable for both residential solar energy systems and businesses.
Because of this diverse use, investors can expect consistent growth in the upcoming years due to the usability of the products. First Solar has generated nearly 10% of annual returns since its inception.
The effectiveness of the solar panels has made First Solar one of the world’s most widely-used solar panel makers. This has increased its worth and attracted new investors.
Furthermore, First Solar had a net cash balance of around $1.5 billion in 2021. This shows how this company has extensive capital to continue growing its reach in the upcoming years.
Pros:
- World’s first thin-film solar panel manufacturer
- 3 out of 5 for ESG risk assessment
Cons:
- 20.32 moderate ESG risk rating
- Moderate controversy level – Governance
- 3 issues: human capital, business ethics, and resource use
See Related: Best Green Companies Around the World
4. NextEra Energy Partners LP: Best Investment for Wind and Solar Energy Combination
If you are looking for a one-size-fits-all investment, look into NextEra Energy. This company focuses on producing both wind and solar energy to help reduce business and personal reliance on fossil fuels.
NextEra Energy keeps a consistent revenue stream by selling clean electricity to various businesses and companies. This keeps investors confident about the future state of the stock in upcoming years.
In addition, NextEra Energy has a great personal and professional track record. Not only does this business create high levels of shareholder value, but the 700% return in the last 10 years can put any beginner investor’s mind at ease with this stock.
The high levels of growth indicate the business will expand, a move that will surely only increase its annual rate and earnings potential.
With a range of between 5 and 8% of annual growth return through the end of 2023 projected by financial professionals, NextEra Energy promises to deliver at least 10% of dividend growth through 2022. This makes this a safe, promising, and high-potential stock for clean energy investments.
Pros:
- Uses nuclear, wind, and solar assets
- Created a Hydrogen Pilot Plan
- 3 out of 5 ESG risk assessment
- Sells energy throughout the US and Canada
Cons:
- 27.06 moderate ESG risk rating
- Moderate controversy level – operations and customer complaints
See Related: How to Store Solar Energy for Later Use
5. SolarEdge Technologies: Best Investment for Optimized Inverters
SolarEdge Technologies is one of the industry leaders in optimized inverters. This is an influential technology that maximizes solar panel output.
Using these optimized inverters in tandem with solar panels helps lower the cost of renewable energy. This helps to remedy one of the most common complaints in the industry today – high costs vs. non-renewable fuels.
SolarEdge Technologies is the leading producer of optimized inverters. They have a high level of projected growth up until the year 2050! For long-term investments, beginner investors should invest in this stock as a reliable option with room to grow in this expanding industry.
Since renewable energy is becoming more common globally and in the financial/stock industry, investors can feel good about investing their money in this high-growth company. This green business has the potential for diverse opportunities that can help diversify an otherwise risky portfolio.
Pros:
- Optimized inverters reduce energy costs
- Increases public accessibility
- Potential for outsized total returns
Cons:
- According to Morningstar, 24.64 ESG risk rating
See Related: Best Lithium Stocks to Invest in Today
6. SunPower Corp: Best Investment for Residential Renewable Energy
Clean energy should be affordable and accessible to everyone. For this reason, SunPower Corp is one of the most important stocks to research in 2021.
Energy sources, like solar power, should be produced with every person in mind. Instead of just creating large-scale energy systems for large-scale corporations, SunPower Corp makes both commercial and residential solar energy systems.
SunPower Corp created the money-saving initiative SunPower Financial. This new project continues to reduce the price of solar products, services, and systems for homeowners. Investing in SunPower Corp is a great pick for you if you are interested in making solar energy more prevalent in today’s society.
SunPower Corp is suspected of using innovative technologies and new ideas to reduce costs associated with purchasing and producing solar resources. The ever-growing societal push towards electric cars, solar power, and wind power has put SunPower Corp in a good position for the upcoming years.
Even though other businesses in the solar industry have stronger positions, such as a higher level of financial growth or higher level of return, SunPower Corp has a more compelling reason to invest in this business.
Pros:
- Distributed generation growth
Cons:
- Moderate controversy level – Business ethics issues
- 37.04 HIGH ESK risk rating
See Related: Best Solar Energy Stocks to Invest in Today
7. Adverse Technologies Holdings Inc.: Best Investment for Fuel Cells
Fuel cell systems are one of the more recent and innovative technologies that drive the industry forward. This makes it more competitive with the time-tested use of non-renewable resources.
Adverse Technologies Holdings Inc.’s revenue has increased by 643% in the past year. This makes this company’s stock a promising investment for this year.
Pros:
- Diversified portfolio
Cons:
- Net loss of $11.3 million in the 2021 year-end quarter
See Related: Best Portable Solar Panels for Home
8. Ameresco Inc: Best Investment for Multi-Faceted Renewable Energy Approach
Compared to other renewable energy stocks focusing on one aspect, Ameresco Inc. focuses on ALL of them. Ameresco uses its resources and capital to upgrade business infrastructure with green standards energy solutions, improved solar efficiency, and renewable energy power sources.
The company acquired Plug Smart, to help expand the vast range of services to include budget-friendly and eco-friendly investment projects.
Pros:
- The stock value has significantly increased in the past year
Cons:
- Financial terms of Plug Smart acquisition not disclosed, this could reduce public trust in the company
See Related: How Much is a Wind Turbine? Here’s What to Know
9. Northland Power: Best Investment for Offshore Wind Power
Northland Power is a Canadian company that provides renewable energy to North America, Latin America, Europe, and Asia. They use a wide range of renewable resources to produce electricity for projects in the mentioned countries. They utilize wind turbine power, solar panels, and other renewable sources.
Northland Power also uses the majority of its resources for harnessing wind power off of Asia and Europe to provide a long-term and consistent power source. With this company, investors boost the prevalence of offshore wind power in the renewable energy sector. They can also assure they are making smart investments for their multi-year financial portfolio.
Northland Power has a five-year projected valuation of over 108%. This indicates that investors who are in it for the long haul will experience a significant payoff.
Investors have noted the decline of the stock’s price in recent years. However, it is projected that a 5-year growth can eclipse the short-term potential pitfalls. Cash flow is projected to increase in the upcoming years, overshadowing the decline in price over the past 6-months of the stock’s life.
For those curious about investing in ESGs, wind power contributed over 60% of the business’s capital in 2020. Compared to the minimal results in 2014, this data shows the company’s commitment to utilizing wind power for its capital.
Pros:
- Promising expected 5-year return
Cons:
- Steady decrease in price for the last 6 quarters
See Related: Best ESG Target Date Funds
10. Suncor Energy: Best Investment for Reducing Greenhouse Gasses
Greenhouse gases are some of the main contributors to the declining state of the environment in the past decades. Reducing the production of greenhouse gasses can help people all over the globe have better predicted future lives for their families.
Suncor Energy is a diverse business that uses its resources and technology to work in various sectors of renewable energy. The company produces oil, owns wind power facilities, and invests wisely in renewable fuel companies.
Analysts who have researched this stock state that there is a promising percentage increase of 27.1%. The stock has risen over 50% in the past year. This recent short-term growth indicates this stock is best bought now, as the value and the price are expected to continually increase.
Suncor Energy has a market value of over $37.6 billion, with a substantial growth of over 455% in the latest quarter. Financial analysts claim this company will get rid of its’ existing debt due to the increased buyback price and dividend yield.
For investors who want to invest in a green initiative with a possibly high level of return, investing in Suncor Energy could be a smart choice.
Pros:
- Focuses on reducing carbon, emissions, and waste
- High level of guaranteed return
Cons:
- Moderate controversy level – employee concerns
- ESG risk rating of 30.45 – High
See Related: Clearway Energy, Inc. ESG Profile (CWEN.A): Is It Sustainable?
11. Capstone Green Energy: Best Investment for Energy-As-A Service
Capstone Green Energy is considered a higher risk than other clean energy stocks. Still, the promising future of this company and the focus on EaaS practices makes this a smart long-term investment.
Capstone Green Energy provides many products and services within the industry. This includes clean energy solutions, storage opportunities, hydrogen-based options, and EaaS.
If you are an investor who wants to invest in a business focused on providing a wide range of green energy solutions, Capstone could be your best bet. Not to mention, younger investors building their portfolio’s foundation can feel confident about this stock.
The company realizes the methods that ‘Millenials’ and ‘Gen Z’ investors have with their money, opting for stocks that correlate with their ethics. Capstone Green Energy confirmed that Gen Z is more likely to invest in sustainable products than other generations.
The company was recently rebranded from Capstone Headwaters to Capstone Partners. It continues to build its financial position to encourage investors of all ages to invest in sustainable energy.
Although the company has a lower margin than other investment options, it is confident that focusing on EaaS services can boost its revenue and reduce its loss in the coming years.
Pros:
- Focus on younger investors
- One of the only EaaS-focused businesses
- $17.2 million in revenue during second quarter of 2021
Cons:
- Lower demand vs. other renewable energy businesses
See Related: Domino’s Pizza, Inc. ESG Profile (DPZ): Is It Sustainable?
12. Amyris: Best Investment for Bioscience Solutions
Amyris may not be specifically focused on ‘energy’ when compared to other renewable energy businesses, Amyris has a green-focused initiative that provides cleaner product ingredients.
Haven’t you ever looked at the back of your shampoo bottle and wondered what those ingredients mean?
Chances are the list of ingredients is extremely long and filled with chemicals that might harm your hair and skin health. Instead of using environmentally harmful products, you can shop for biosynthetic and all-natural alternatives.
Amyris does just that. This company produces biosynthetic versions of the chemicals found in healthcare products. This includes conditioners, shampoos, perfumes, deodorants, and skincare products.
In short, Amyris provides green products for companies that want to make their business sustainable. This makes this stock more valuable to investors interested in clean, green, and renewable resources.
This stock is good for advanced investors who enjoy researching their investment opportunities. Amyris has mixed reports regarding financial stability in the long term and the short term. There is also no significant risk assessment of this stock for individual investors.
Amyris was the victim of a sharp drop in stock prices in the last quarter of 2021. However, the third-quarter earnings in 2021 showed a dramatic increase, increasing nearly $28 million from the previous year.
Since the stock had a sharp uptick in value, followed by a severe price decrease just a few months later, this green stock is a riskier venture than other options.
Pros:
- Penny stock for new investors
- $27.6 million increase from previous year
- Currently-low buy-in price of just $6
Cons:
- Riskier investment for both short and long-term gain
- Stock price plummeted on November 8, 2021
Why You Should Invest in Renewable Energy Stocks
Now that you know renewable stocks to consider investing in today, stay true to your morals, help the environment, and see a return in investment over the years.
You might also be wondering – why should I take the chance with clean energy stocks vs. other safe options?
Rising Market Share
Since fossil fuels are non-renewable – meaning they’re gone forever – they are unpredictable once they are gone. Renewable resources like wind, solar, or natural oil can be harnessed virtually forever.
The new focus on shifting towards renewable resources and innovative technologies has made businesses in the clean energy sector more desirable for investments.
Just a few years ago, the global renewable energy market’s market value was around $928 billion. This price is expected to skyrocket to $1.5 trillion in the next 5 years.
With an annual predicted growth rate of over 6.1%, clean energy businesses are the wave of the future. With the rising market share of renewable businesses, the other fuel market prices are expected to drop.
The focus on renewable energies will replace the current reliance on harmful fuels. The expansive hydropower production centers and large-scale solar/wind power are predicted to increase by almost 15% by 2030.
The Senate passed a $1.2 trillion bipartisan infrastructure package, including funding to accelerate clean energy investments. This shows how the world is focused on moving environmentally friendly energy sources.
Renewable Growth
The next reason to invest in these stocks is the long-term growth in the renewable energy sector. In the past few years, this sector has seen arguably the biggest jump in value and predicted income compared to any other industry.
Non-renewable fuel sources are still widely used worldwide due to their lower prices and availability. But, sustainable energy is finally starting to take place in the energy industry.
The imminent threat of non-reversible climate change has compelled companies to look for alternative energy sources.
Renewable ETFs
Individuals can make a substantial investment in the industry by looking at exchange-traded funds that match their moral and ethical qualifications.
By investing in an ETF, investors can be sure their hard-earned money will go towards a wide range of businesses interested in clean energy, renewable resources, green products, and conservation measures.
Furthermore, the value of renewable ETFs is continually growing – and is projected to do so in the upcoming years. Analysts recommend finding an ETF with a vast array of companies involved in the clean energy industry to diversify your portfolio and hedge your bets.
Clean Energy ETFs
This is the best time to invest in clean energy ETFs. This is because of the increasing value of clean energy stocks, increasing harmful effects of hydrocarbon deposits on the environment, widespread availability of renewable ETFs, and increased public interest in sustainable energy.
Large companies that may have previously focused on non-renewable resources are now turning their income and resources towards clean energy, making clean energy ETFs more profitable for investors.
Unstable Oil Markets
Due to the growing social concern of climate change, the oil demand plunged in the last two years. The low demand led to a lower price, resulting from the classic demand vs. price correlation.
For the first time in American history, the price of oil fell into the negatives, highlighting how investing in fuel company stocks is not the best move for new investors.
Instead, investors should look to invest in more stable clean energy companies. The price of fossil fuels is unstable, having dropped significantly and continuing to fluctuate as the world navigates the changing society due to the pandemic.
Potential investors should look to invest in renewable resources and not harmful industries and transportation companies emitting destructive greenhouse gasses.
Since the industry is growing in popularity and prevalence worldwide, this, coupled with the unstable fossil fuel prices, has made ‘green’ investments wiser for individual investors.
New Employment Opportunities
Another benefit of investing in clean energy stocks is the potential to create new jobs. As of early 2022, over 11 million people are employed within the industry around the globe.
The increased importance placed on clean energy solutions indicates this sector will continue to increase steadily in the upcoming years.
Instead of needing more jobs for fossil fuel extraction, the clean energy industry’s expansion is expected to reach upwards of 43 million people in the next 30 years.
This shows that the total number of jobs could increase by approximately 30 million by 2050 – helping create employment opportunities for individuals across the world.
Technological Gain
The next benefit of investing in clean energy stocks is the potential for technological improvements as the industry progresses.
Like anything in the beginning phases of its life cycle, the clean energy industry has the potential for incredible growth in terms of financial gain, energy usage in societies, and new technology for harnessing alternative power sources.
Coming up with new technology has already influenced the popularity and cost measures associated with the energy industry. Although they may seem small, technologies like inverters and controllers have increased the effectiveness and efficiency of energy products and services.
Investing in new energy storage methods is a new improvement that can make energy more accessible, affordable, and usable for businesses and individuals.
Finding new ways to store energy and harness energy when needed makes it possible to secure renewable resources to use safely later, increasing the longevity of renewable technologies.
Finding new ways to store energy can help societies that do not have access to enough wind to harness ample wind power to provide energy to the desired population. Making energy storage more of the norm is essential to providing easily-accessible energy to the entire grid.
Increasing Capabilities
In tandem with creating new technologies to boost the reach and accessibility of clean energy, the growing capabilities of alternative energy sources showcase a promising future for this industry.
This energy sector continues to grow due to widespread social concern for climate change, cheaper acquisition methods compared to non-renewable resources, and increasing solar and wind capabilities.
Bioenergy continues to grow in popularity, accounting for just over 1/10 of the total supply of renewable energy sources. In the upcoming five and 10-year projections, it is hypothesized that bioenergy will increase by 25% and experience annual growth of between 3-6% by 2030.
Related Resources
