It has made key strides in the development of wind turbines and energy-efficient software. For this article, we scanned Insider Monkey’s database of 943 hedge funds and picked the top 12 renewable energy stocks. That means these are the most popular renewable energy stocks among the elite hedge funds in the world. With each stock we have mentioned the number of hedge fund investors as of the end of the fourth quarter of 2022. The company has also started to leverage its expertise in inverters to create other smart energy solutions.
We are now at the beginning of the next big challenge—an enormous global buildout of renewable energy infrastructure. At least a nine-fold increase in renewable energy is needed to meet the emission reduction goals laid out in the Paris Agreement. But renewable energy requires a lot of land—especially for the onshore wind and utility-scale solar installations that are expected to make up the vast majority of new energy investments. This raises the potential for negative impacts to both local communities and natural habitats. We need a smart buildout that avoids conflicts, or the renewable energy transition could be stalled by land-use challenges. Corporate clean energy buyers are uniquely positioned to address this issue.
There’s potential for further resource generation from exploration assets in Australia and Canada. Energy stocks can be hot and cold, but when they’re hot, they can move as quickly as any tech stock. And it’s a popular sector to trade when oil prices skyrocket or geopolitical tensions ratchet up, as prices can become highly volatile and traders jump into the action. If you still want to invest in solar energy but would prefer something a little safer than stocks, an index fund such as Russell 1000 may be an excellent choice.
Remember that this segment of the economy is susceptible to massive swings in the market because it’s not fully ensconced amongst investors the same way an oil stock might be. You should monitor the performance of your holdings and exit positions that are no longer serving you. The demand for sustainable energy solutions rises exponentially as the world shifts towards a greener future. https://g-markets.net/helpful-articles/bullish-engulfing-pattern-trading-strategy-guide/ Unsurprisingly, investors are seeking the best green energy stocks to capitalize on this lucrative market. Within the realm of renewable energy, growth stocks are a key focus for those seeking high potential returns. Firms that engage in the production and distribution of energy from limited resources such as coal, oil and natural gas are considered nonrenewable energy stocks.
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ConocoPhillips (COP) is an oil and gas exploration, production and transportation company headquartered in Texas, with operations in 13 countries worldwide. Its constant cash flow enables it to earn interest income (in contrast to most solar module makers who have to pay interest to 3rd parties). Being financially strong, the company can continue both reducing the cost and developing its production facilities. In late winter of the current year, the firm singed an agreement with Enfindus (an international solar investing company) for a 1GW solar project.
Companies within the sector provide a variety of clean energy including solar, wind, hydroelectric, geothermal, and biomass. The largest renewable energy companies are headquartered in Spain and Denmark, but other big players are based in China, the U.S., and Canada. Canadian Solar (CSIQ, $35.86) is one of Wall Street’s best green energy stocks. CSIQ is a solar power company that provides integrated solutions including solar power products, services and systems. It is one of the world’s largest makers of solar photovoltaic products, as well as one of the largest solar power plant developers.
Boss Energy Ltd ($BOE)
But investors also need to make an informed decision to make sure they’ll get sufficient returns in the future. Oil and gas energy stocks often decline in value during a recession, because there is less demand and falling prices for their products during an economic contraction. But not every oil and gas company suffers—midstream stocks, for instance, make money from moving energy products around, and are less impacted by lower energy prices.
- Find out how this rapidly advancing industry can benefit your investment portfolio as we look at wind, water and solar energy investments.
- First Solar stock is up nearly 40% since the beginning of the year and is currently trading around 15% off its 52-week high of $232.
- Attempting to time investment decisions to take advantage of the boom and bust is a risky venture.
- As a result, you can unlock the potential for profitable investments with the top renewable energy growth stocks.
As countries like China and India continue to develop, their need for energy will grow, too. This means there will be plenty of future demand both for existing energy sources like oil and gas as well as growing needs for alternative sources. Headquartered in Houston, TX, EOG Resources engages in the development and production of oil and natural gas. The EOG in the company’s name once stood for “Enron Oil & Gas Company,” as it was formerly a major operating unit of the failed energy conglomerate, Enron.
TotalEnergies SE (TTE)
It takes considerable resources to explore new sources of energy, like drilling for new oil wells, not to mention research and development for sustainable energy technology that may not always pan out. These financial drains can potentially harm your long-term returns if enough of them coalesce. Headquartered out of San Ramon, Calif., Chevron is the second largest energy company in the United States and the third largest in the world. It’s a major producer of oil and gas, a supplier of aviation fuel and owner of over 7,800 Chevron and Texaco retail gas stations.
“And in terms of financials, many clean energy pure-play companies are not profitably or highly levered,” she says. Renewable energy investments may be tough to find, but experts say investors who look carefully will reap the benefits. BE is a company headquartered in San Jose, California, that has transformed the electricity space with its solid oxide technology. NEE, based in Florida, is the world’s largest utility company, with a market value of $152.37 billion. Looking ahead, Canadian Solar expects total module shipments of 5.9 GW to 6.2 GW in the first quarter of 2023 and revenues to be in the range of $1.6 billion to $1.8 billion, with gross margin of 18% to 20%.
For example, over the past 10 years the price of crude oil has gone from as high as nearly $110 a barrel to as low as less than $20 a barrel at the start of the Covid-19 pandemic. The value of energy stocks tends to track energy prices, making these investments more volatile and potentially riskier than stocks in other sectors. In response to the collapse of energy prices during the Covid-19 pandemic, Royal Dutch Shell cut its dividend, a blow to income investors who held its stock. It also shifted a sizable share of its spending away from capital projects for oil and gas and is now focusing more on the development of renewable energy projects. Constellation Energy is headquartered in Baltimore but has offices across the United States. It provides a variety of energy sources, including electrical, nuclear, and natural gas services.
The company sells the bulk of its power under long-term PPAs that generate steady cash flow. Few companies are betting bigger on renewable energy than NextEra Energy. The utility unveiled its Real Zero plan in 2022 to eliminate carbon emissions from its operations by 2045. It aims to significantly expand its solar energy and storage capacity while replacing natural gas in its power plants with green hydrogen and renewable natural gas.
- If you still want to invest in solar energy but would prefer something a little safer than stocks, an index fund such as Russell 1000 may be an excellent choice.
- They have already shown steady growth over their long history, but those numbers are expected to accelerate in the near future.
- The energy sector struggled throughout the Covid-19 pandemic, due to less travel and overall demand.
- So if you want to play the rise of energy stocks, consider investing in exchange-traded funds (ETFs) or mutual funds that focus on that specific sector.
- Like First Solar, SolarEdge Technologies should benefit from the accelerating growth of solar energy worldwide.
In the last five years alone, its stock price has soared by an impressive 23.25%. Investors have also been delighted with its status as one of the best green energy stocks, thanks to its lucrative dividend yield of 4.3%. The value of solar energy stocks has been reasonably stable in the last few years. As more customers understand the need for solar solutions and renewable energy, it is understandable why these companies have done a decent job, especially in the last couple of years.
You need to understand the dynamics of the industry but also the specific exposure that each energy company has, including the quality of its producing assets. By 2050, around 50% of global energy production is expected to come from wind and solar energy. As the public adopt new attitudes and behaviours for a more eco-friendly life, major energy and utility companies are investing heavily in new green initiatives. For example, Shell has spent around $2bn on investment in renewable energy since 2016. Clearway Energy is one of the largest owners of renewable energy generating facilities in the U.S. It complements its wind and solar energy portfolio with highly efficient facilities powered by natural gas.
The solar capacity added during the coming four years is expected to reach 700GW (out of 1.2TW of the total renewable energy development). This means that their economies will likely have to forsake expensive investments in energy transition projections in favor of more economically valuable investments. Oil, gas and coal companies are notorious for products that emit greenhouse gases, which worsen global warming. Not only is this an ethical concern, it also makes energy companies vulnerable to costly lawsuits, which can hurt your returns. The energy sector struggled throughout the Covid-19 pandemic, due to less travel and overall demand. Now that the world is beginning to reopen, there could be a new surge in travel, pushing up demand and prices for the best energy stocks.
Should you invest in the hottest energy stocks?
By market cap, 60% of the 18 U.S. clean energy companies covered by Morningstar come from the utilities sector and an additional 26% come from the technology sector. In fact, none of the companies in the list of U.S. clean energy plays are actually from the energy sector. These clean energy stocks are focused on green energy and trading at attractive valuations.