Table of Contents Contents
Some people choose to invest in renewable investments because they have a good return. Others choose to because they believe in green energy and what they can do for the planet. No matter your reason for choosing to invest in the green energy power sector, there are plenty of different options available in order to diversify your portfolio while making it more sustainable.
Best Renewable Energy Stocks to Choose From
When it comes to deciding which stick is best for you, there are plenty to choose from. It's important to look at more than just the company, though. Are you looking into investing in penny stocks, or do you prefer larger stocks? How much are you looking to invest? Are you just beginning your investing journey, or do you already have a diversified portfolio? Do the companies pay dividends?
These are all things you need to consider before deciding who to invest with. That said, here are some of the best green energy companies to invest in. That said, it’s important to keep in mind that these stock prices fluctuate and are often affected by oil prices as well as other factors. And, if these stocks don’t work for you, the Morningstar category equity has some great renewable energy stock choices as well.
Canadian Solar Inc (NASDAQ: CSIQ)
Canadian Solar Inc. manufactures solar panels. They manufacture solar modules (PV), and they run large-scale solar projects. It was founded in 2001 and has grown exponentially since then. Their overall goal is to bring solar power to those all over the world. Currently, they have delivered solar power to over 160 different countries, and the number is still growing.
As one of the world's largest solar power companies, it's no wonder that many people choose to invest in them. They are continually updating their technology and expanding their business. Their stock prices are also relatively low, which is a large incentive for investors. They are also in the top percentile for their category, so they are known to create a return. That said, though, there's always a risk when it comes to investing.
While Canadian Solar Inc. is a large Canadian company that has gone global, they're also known to have debt, which can be scary for investors. If a company goes under at any time, that could be a large hit to your investment portfolio. When you invest, your intention is never to lose money. This is an important factor to keep in mind before you invest, but just because there are large amounts of debt doesn't necessarily mean that they will go under. They could realistically stay active for many years to come. However, you can see any new information the company announced on their website.
Northland Power
Northland Power is a power producer that is headquartered in Toronto, Ontario. They were founded in 1987 but have only been publicly traded since 1997. They specialize in green power infrastructure assets and operate in select countries around the world. The resources that they deal with are mostly clean-burning natural gas, but they also deal with solar power as well as wind power.
The reason many investors looking to invest in green energy invest with Northland Power is not only because they are on a steady growth trajectory, it's because they're committed to building a sustainable as well as carbon-neutral world. They are constantly creating new and innovative green energy solutions to keep them ahead of the curve.
While there is always risk when it comes to investing, Northland Power is known for their consistent cash flow making it less risky to investors. These cash flows ensure a continual increase in value for investors and encourages more investors to start. Their management team also has a ton of experience in the different clean energy industries, allowing them to stand out above other companies.
NextEra Energy (NEI)
Unlike the other two companies we have listed above, NextEra is an American power company. It wasn't founded in Canada, and they are the largest power company in the world. They have also been around for just under 100 years. They were founded in 1925. Not only do they provide clean energy solutions, but they are also one of the largest investors in America's energy infrastructure.
This isn't all NextEra does though, they are also the parent company of Florida Power and Light Company which is also a large company. They are actually America's largest electric utility and sell way more than the rest. They provide power to over 12 million people. They also excel in wind power, solar power and battery storage.
While it may be scary to invest in an American electric power company, they are one the best clean energy companies in the world. Their revenue predictions are between 6% and 10% per year for the next 3 years. This is great news for investors. While nothing is guaranteed, it's a good indication that this could be a good investment.
Enphase Energy (ENPH)
Enphase Energy is another American energy technology company. Instead of being based in Florida, they are based in California. Their main focuses are manufacturing solar micro-inverters, battery energy storage, and residential Electric Vehicle charging stations. They have been doing this since 2006.
Since Enphase focuses on solar power, this is where their name is likely to be noticed. They are one of the most popular solar power companies in the world. So far they have installed micro-inverters in over 145 different countries, equaling around 63 million on over 3.3 million homes. Their motto is “Make, use, save and sell your own power.”
Besides the fact that Enphase sells one of the most popular solar power systems in the world, the reasons investors choose to invest in them is because of their numbers. They have a historical trend of increased cash flow growth every year, with another predicted future growth by the end of 2023. This shows investors that the chances of them earning a profit are higher than not. How much of a risk you choose to take from there is up to you.
Clearway Energy (CWEN)
Clearway Energy is a US energy company. They focus on both wind power and solar power and are one of the largest companies in the US. They previously owned a Thermal Business but have since sold it.
What makes them different from the others is the fact that they're a full-scope platform. This means that they participate in every aspect of their projects from start to finish. They are a part of every process from design to daily operations. This is one of the reasons that they're so successful and people choose to invest with them.
Another great thing about clearway is the fact that they not only utilize their employees and their expertise, they also collaborate. They recognize that partnering with others can be a great way to meet your goals while still building your own platform.
The stock for Clearway Energy is also relatively affordable. Just like the rest of them listed here, it's under $100 US per stock. Your total cost will depend on MER fees as well as how many stocks you choose to purchase. Keep in mind that you don't have to just choose one either. You're able to make more than one investment if you choose to.
Algonquin Power & Utilities Corp (AQN)
Algonquin Power is a renewable energy company that has over $17.6 Billion in assets throughout North America as well as internationally. Their purpose is to sustain water and energy for life and they have over 1.2 million customers that provide electricity, water and natural gas services too.
Algonquin dabbles in a wide range of energy sources, including wind, solar, thermal and hydropower. On top of that, they have been in operation since 1998. They started out small, and now they have over 130 electrical generation, transmission and distribution facilities throughout the US, Canada and across the world. They have over 3.500 employees and 1.2 million customer connections.
While ultimately, the reason for investing is to become profitable, investors want companies to have a wide customer base. This not only ensures continued profits but also reduces their risk of losing their money. They also like to see the growth the company has gone through in order to help predict their future.
Algonquin started by developing hydroelectric projects in Canada, then in 2001 they expanded into Arizona with regulated water and waste treatment facilities. By 2004, they were into wind-generated energy and in 2009, they purchased their first electric utility. 2014 is when they ventured into solar energy with the acquisition of Empire District Electric Company in 2017. They then rebranded this to Liberty Power. This was only the beginning, though. They have continued to expand and grow since then.
Brookfield Renewable Energy Partners (BEP)
This company has a headquarters in Toronto, Ontario that owns and operates renewable energy assets including hydroelectric, wind, solar and distributed energy across 5 different continents. This is only one of the reasons that investors choose this company. Some others are that they are in a strong financial position and allow their investors to see them, including their information from the first half of the year. They are also a leader in decarbonization.
On top of that Brookfield Renewable Partners demonstrates diverse and high-quality cash flows and has multiple levers to grow these cash flows. They demonstrate this by delivering 12-15% total returns and 5-9% yearly distribution growth. They also have a lot of subsidiaries including Brookfield Asset Management, that helps to build their portfolio.
Enbridge Inc (ENB)
Enbridge is actually one of the largest renewable energy partners in Canada. They started investing in renewable energy production in 2002 with a wind farm, and now, they have over $8 billion in capital for renewable energy and power transmission projects. In total, Enbridge has invested in:
- 23 wind farms
- 16 solar energy projects
- 1 geothermal project
- 1 power transmission project
If you are considering investing in Enbridge, you can do so through the Canadian or the US market. They list all of their quarterly financials on their website for investors to access as well which is great when you are trying to make investing decisions.
The main businesses that Enbridge is involved in are liquid pipelines, natural gas pipelines and gas exploration, gas utilities and storage, and renewable energy. This is because they are practically approaching the global energy transition. It happens over time. They are developing new energy sources while still keeping the costs as low as they can. Enbridge is so large it moves about 30% of the crude oil produced in North America. They also transport at least 20% of the natural gas consumption in the US.
TransAlta Renewables (RNW)
TransAlta Renewables' main focus in the renewable energy sector is wind power with wind turbines. On top of being one of the largest wind power generators in Canada, which makes them attractive to investors, they also are one of the largest publicly traded renewable energy companies in Canada. They have 48 renewable energy facilities, and not just wind. They also have hydro and gas.
TransAlta Renewables continues to grow their assets and there's no sign of this slowing down anytime soon. Their stocks keep gradually increasing with the increasing demand, as well as their returns. While there's always room to lose money, currently this company is on the upswing and is committed to their investors.
Innergex Renewable Energy (INE)
Have you ever heard of run-on-river hydroelectric power facilities? Well, Innergex Renewable Energy is their owner, developer, and operator. They also produce wind energy and have solar farms. They have operations in North America, South America and France. Their focus is to produce power by using 100% renewable resources and transition to a carbon-neutral global economy, meaning eliminating carbon-based fossil fuels.
If you are looking for a company that solely focuses on the renewable energy industry then this may be the option for you. A lot of the other companies also use other resources instead of just the 100% renewable energy sources (natural resources) because the energy transition is still ongoing. This company is ready for the future and is currently focusing on renewable energy.
SolarEdge Technologies (SEDG)
SolarEdge Technologies is a green energy company that's headquartered in Israel. They sell solar inverters for photovoltaic arrays, software to monitor energy generation, battery energy storage products, among other things.
While this isn't a Canadian or US company, for the past decade, it's been the top-performing green energy stock. For this reason, it's the only green energy company we have listed that shares are over $100 USD each. It's actually one of the most used solar energy systems, and its revenue has consistently grown over the years. Current investors seem to be happy with their investment, so more investors keep buying in,
First Solar (FSLR)
First Solar is another choice for one of the top renewable energy stocks to purchase in Canada. They have been around since 1989 and are an American company. They also claim to be the largest US headquartered solar PV manufacturer. If you choose to invest with First Soar, they have their financials on their website so you're able to see their yearly and quarterly net income.
Boralex (BLX)
Boralex is a Canadian company that’s based in Quebec and they focus on creating energy from renewable resources. Their main sources of energy are solar, wind and hydroelectric. They have multiple wind and hydroelectric projects across Canada, as well as a solar and thermal project.
While Borelex operates in Canada, it also operates in the US and France. Currently, they’re France’s largest onshore producer of wind power. If you choose to invest them, there shares are fairly affordable at under $50 per share and all of their financials can be found on their website.
Ballard Power Systems (BLDP)
Ballard Power Systems is a little different from the other sustainable stocks we discussed. Instead of specializing in traditional sustainable energy, Ballard specializes in hydrogen fuel cell technology. Essentially, they work to create energy from the combination of hydrogen and air. Specifically, their technology is used in heavy duty trucks and other large methods of transportation.
If you’re looking into investing in Ballard, all the information that you need can be found on their website. Their share prices do very but they can often be found for under $20.
What About Penny Stocks?
If you are looking for cheaper stocks, you can also go with penny stocks, but keep in mind that they can be riskier than regular stocks. This is because they often aren't listed on the markets and are from smaller or newer companies. The ones above, the larger stocks, are from larger companies and have protocols they need to follow when listed on the regular market. That said, there still are plenty of penny stocks; just do your research.
Why Invest in Renewable Energy?
While you may have your own reasons for investing in renewable energy, one of the main reasons is that it's the energy of the future. As time goes on and these forms of energy become more mainstream, the stock prices will only go up. Since there are so many incentives to switch to renewable energy, you see more and more people starting to invest in their stocks,
On top of that, they're a great way to diversify your portfolio. It's important to keep a varied profile because then, that way you aren't putting all of your eggs in one basket, so to speak. It also helps to protect the environment. The more invested in clean energy sources, the more these sources can be utilized.
RIght now, the fossil fuel prices are unstable with many different supply chain issues , and, as part of the USA's Inflation Reduction Act, they are focusing more on clean energy sources. This means that more resources are going to be put into green energy instead of fossil fuels. Investing in fossil fuels is unstable and a lot riskier.
Ways to Invest in Green Energy
Just because stocks are the traditional way to invest in green energy doesn't mean it's the only way. Many people invest in them through ETFs and mutual funds. This is great because the portfolios are already assembled for you, and you don't have to stress as much. Many people do this if they are already hoping to add ETFs (Exchange-traded funds) and mutual funds to their portfolios and want to start their green energy investigation journey.
Clean Energy Stocks and Interest Rates
With the increase in inflation and interest rates in the last few years, many renewable energy stocks did take a bit of a hit. That said, there is some good news for long-term investors. As the interest rates decrease there’s becoming a stabilization in these stocks. And, because of the long-term demand, the stock's past performances aren’t likely to predict their future. However, it’s always a good idea to speak to a financial advisor regarding your financial situation, and they can help you make the most informed decisions.
Overview
In line with the world's goal to reduce carbon emissions and combat climate change, more and more alternative energy companies are emerging. That said, there are also a bunch of more established companies already building their clientele all over the world, and these are the companies that many investors choose to purchase clean energy stocks in order to help reduce greenhouse gas emissions.
It can be overwhelming to decide which companies you wish to invest in. That said, there are plenty of different options, and you can invest in more than just one. While they are generally similar in the fact that they all work with renewable energy sources, they vary slightly, too. The locations where they work vary, too, and not all companies offer their services in North and South America. And they all have different market caps. With all that in mind, though, the final choice is yours. As always, before you invest, be sure to do your research so you can find the best energy stocks for you.
