While green energy has been around for many years, looming climate impacts and consumer awareness have turned it into one of the fastest growing economic sectors in the past decade. We’ve handpicked the 10 best green energy stocks with the highest growth potential for what can essentially be an investment in renewable energy’s present and future.
Money has been pouring in the field, and stockholders are betting on the growth of green energy assets. The stocks have been selected not only based on their potential but also on market capitalization and percentage growth since their initial public offerings.
We have also created a 85-page primer on the hydrogen industry and combined it with in-depth fundamental and technical analysis of five stocks – Plug Power, FuelCell Energy, Nikola, Bloom Energy and Ballard Power Systems. Click this Hydrogen Industry and Stocks Report link to learn more and download it at a discounted price of $49.99 during our holiday promotion!
Table of Contents
- Green Energy
- Solar Green Energy Stocks
- Wind Green Energy Stocks
- Hydro Green Energy Stocks
- EV Green Energy Stocks
- Hydrogen Green Energy Stocks
- Final Thoughts
- Risk Disclaimer
But before we delve into a detailed analysis of the 10 best green energy stocks, let’s take a look at the definition of green energy. The term is often used interchangeably with renewable energy. Still, there are some differences between the two. For example, biomass burning is a renewable energy source since it replenishes itself naturally. Yet, it is not necessarily green, as its energy generation process immediately releases greenhouse gas emissions into the atmosphere.
Green energy is a type of power generated via naturally abundant resources like sunlight, wind, water, or heat produced inside the earth. Antyhing that does not create greenhouse gases. If current trends continue, it is set to replace fossil fuels.
Fossil fuels have a limited supply on earth and take millions of years to replenish. Unevenly distributed across the globe, fossil fuels have also been at the heart of geopolitical issues and have mapped out the global distribution of power over the past century. State relations, international conflicts and social and economic instability can all be traced back to this nonrenewable energy source. What is more, fossil fuels release large amounts of carbon dioxide when burned, thus trapping heat in the atmosphere and creating global warming.
And as government, industry, and consumer attention is increasingly focused on finding climate-friendly alternatives, green energy stocks will continue their rise. In fact, demand for renewable energy technologies rose in 2020 despite the pandemic, while the consumption of all other fuels declined.
Relevant: What Are The Top 5 Carbon Capture Stocks?
The Russian-Ukranian war has further accelerated this tendency as it caused massive disruptions in fossil fuel supply and a subsequent wild spike in energy prices that triggered consumer unrest. Renewables are seen internationally as a solution that can bring energy independence while also taming the costs of electricity prices. Global economic and geopolitical leaders have joined forces to test the limits of the energy transition and speed up technology adoption, aiming to lower consumer bills.
We chose the 10 best green energy stocks from four-high potential green energy sectors: solar, wind, hydro, EVs, and hydrogen.
Solar Green Energy Stocks
According to projections, the global solar power market is expected to grow from $184.03 billion in 2021 to $293.18 billion in 2028 at a CAGR of 6.9% in a forecast period 2021-2028. Data also shows solar power now provides the lowest cost for electricity generation in history, driven by technological change, economies of scale, and learning effects derived from the expansion of manufacturing. The downward cost trend is followed by an annual exponential increase in solar installation that has run for more than 25 years and is likely to continue.
In 2021, more money was invested annually into renewables projects than into fossil fuel projects, and more new solar power was built than any other type of power sources. Solar installations now offers the most capital-efficient electricity generation except for wind, which is economically and physically efficient only when installed at very large scales. Combined, these factors come to show that solar power is now a better, lower-risk capital investment than new fossil-fueled electricity projects.
Now that we’ve outlined tha advantages of solar power, let’s take a look at the three most promising solar power energy stocks.
Enphase Energy Stock
- Market cap: 29,55 billion
- Percentage growth since IPO: 2 881,34%
- Initial public offering year: 2012
Enphase Energy (NASDAQ:ENPH) is a California-headquartered company that develops, manufactures and sells solar micro-inverters, energy generation monitoring software and battery energy storage products, primarily for residential customers. It was established in 2006 and was registered under the ticker NASDAQ:ENPH on March 30, 2012. The stock has grown 2881.34% since its IPO with a current market cap of 28.56 billion.
The company was founded with the mission to innovate and disrupt the solar energy market. It was the first to successfully commercialize the micro-inverter, a device that could provide enegry to household appliances or bring energy credits. Enphase Energy’s microinverters are scalable and compatible with the majority of different solar panels. The company also offers a structure different than that of conventional string converters, thus overcoming challenges caused by shading, soiling, and faulty panels.
In Enphase’s microinverter system, each panel has a microinverter attached to it to generate AC independently, while the conventional converter combines DC power from multiple panels (“string” of panels) and converts it into AC. That means that if a microinverter fails, it affects the entire system. In Enphase’s system, if a microinverter fails, it will only affect one panel and not the whole system.
The company has reported an annual revenue growth from $217 million in 2012 to $1.382 billion in 2021, or an 84% increase. Its net income grew from a negative $38.22 million in the last three months of 2012 to a net profit of $51 million in Q1 2022. Enphase is a growth-oriented company, suitable for investors who want to promote a renewable energy transition while also profiting from an attractive investment opportunity on the green energy market.
SolarEdge Technologies Stock
- Market cap: $16.08 billion
- Percentage growth since IPO: 1 277.69%
- Initial public offering year: 2015
SolarEdge Technologies (NASDAQ: SEDG) is an Israeli company incorporated in Delaware that develops and sells solar inverters for photovoltaic arrays, energy generation monitoring software, battery energy storage products, as well as other related products and services to residential, commercial and industrial customers. The company was founded in 2006 and has offices around the world. It went public in March 2015.
The company stock has achieved the phenomenal growth of 1 277.69% since 2015 and SolarEdge Technologies is the second-largest company in the solar sector, with a market capitalization of $16.08 billion. Revenue has increased in each of the last six years and gross profit has also been on the rise as a percentage from gross revenue for the same period – from 25% in June 2015 to 32% in December 2021. The company is a leader in a growing field and sales are rising fast, which makes it one of the best green energy stocks picks for a profit-driven investor.
First Solar Stock
- Market cap: $7.78 billion
- Percentage growth since IPO: 194,99%
- Initial public offering year: 2006
First Solar Inc (NASDAQ: FSLR) is a company based in Arizona that manufactures solar panels and develops utility-scale PV power plants and provides services for the industry that include finance, construction, maintenance and end-of-life panel recycling. The company uses rigid thin-film modules for its solar panels as they generate more usable energy than competing technologies and that makes them ideal for utility-scale solar energy projects.
Solar first went public in 2006, trading under the ticker FSLR. The company is the second largest maker of PV modules in the world and is considered a popular pick among investors due to its innovation-driven mission to enable a world powered by cheap and clean solar energy. Solar also became the first company to lower its manufacturing cost to $1 per watt. It is one of the green energy stocks in an excellent position to create even more shareholder value as demand for solar panels keeps accelerating.
The company has announced it is developing two new manufacturing plants in Ohio and India that will double production of solar modules. That means there could be significant capacity growth ahead with new products coming up that should improve costs and margins from 2024 onwards.
Wind Green Energy Stocks
According to forecasts, the global wind power market size was worth $99.28 billion in 2021 and is expected to expand at a compounded annual growth rate (CAGR) of 6.5% from 2022 to 2030. The companies below are well-positioned to take advantage of this growth opportunity.
- Market cap: $24.25 billion
- Percentage growth since IPO: 605%
- Initial public offering year: 1998
Vestas Wind Systems (CPH: VWS) is the world’s largest wind turbine maker and a Danish manufacturer, seller, installer, and servicer of wind turbines, founded in 1945. The company comprises 16% of the world wind turbine market. It designs, manufactures, installs and services wind turbines in 87 countries, employing more than 25,000 people globally. The company has installed 154GW of wind capacity, which is more than any other company.
It has more data to interpret, forecast and exploit wind resources and deliver best-in-class wind power solutions than any other company in the world. Vestas’ business is split roughly to 50% turbine manufacturing and 50% service of wind farms. The service business comprises of long-term contracts, which provide solid cash flows and the turbine manufacturing business looks set to grow as wind is expected to become the most in-demand clean energy solution. The company is also willing to work with governments who want to speed up the renewables transition so proceeds from financing are on the horizon.
Vestas stock was released on the Copenhagen Stock Exchange in 1998. It has grown 605,01% since then, even though the shares have dropped 45% since January 2021 due to Covid-19 and Russian-Ukrainian war disruptions. The challenges of the stock downtrend are expected to be short-term and massive future investments in renewables are anticipated to fuel the expansion of Vestas’ wind projects.
TPI Composites Stock
- Market cap: $451.94 million
- Percentage growth since IPO: -10.55%
- Initial public offering year: 2016
TPI Composites (NASDAQ: TPIC) is the largest U.S.-based independent manufacturer of composite wind blades, supporting global wind turbine manufacturers. TPI operates composite products manufacturing plants in North America, Europe and Asia. The company was founded in 1968 and its IPO came at 2016.
TPI Composites stock is currently experiencing a down cycle that started in February 2021 and has brought the stock to a negative 9,07% since its IPO. Q1 2022 earnings results showed the company missed on both earnings and revenue, reporting a quarterly gross profit loss of -122.4% and a 4.9% decrease in revenue from $404.68 million to $384.87 million compared to previous year. That was mainly due to reduced demand for wind blades, halted production, and global supply chain issues.
However, management forecasts increasing margins, utilization, and blade production as well as rapid growth in the clean transportation sector in 2022. The company has recently entered the electric vehicle and transportation market as it is utilizing its manufacturing and engineering expertise to produce lightweight, durable, and cutting edge components for Proterra (PTRA), Navistar, and General Motors (GM). Revenue from transportation market operations is expected to add financial boost during volatile wind blade demand cycles, similar to those experienced in 2021.
Hydro Green Energy Stocks
The hydropower sector is another renewable energy source that harnesses the power of water to produce electricity. The global hydropower generation market size came at $ 219.14 billion in 2021 and is projected to reach $317.8 billion by 2027, growing at a CAGR of 5.9% from 2020 to 2027.
Brookfield Renewable Partners Stock
- Market cap: $10.19 billion
- Percentage growth since IPO: 26 228.57%
- Initial public offering year: 2013
Brookfield Renewable Partners L.P. (TSE: BEP.UN) (NYSE: BEP) is a publicly traded limited partnership, headquartered in Toronto, Canada and a pure-play renewable power operator. It is 60% owned by Brookfield Asset Management. The company’s assets consist of over 200 hydroelectric plants, wind farms, solar facilities, and storage facilities, with approximately 21 GW of total generating power.
It was established as Brookfield Renewable Energy Partners in 2011, but the name was changed to Brookfield Renewable Partners in 2016. Brookfield Renewable Partners began trading on the TSX in November 2011 and on the NYSE in June 2013.
About 70% of the company’s total generation comes from hydropower facilities located in Canada, the United States, Brazil and Colombia, with approximately 7.9 GW of capacity. 22% come from wind power and the rest – from solar and storage facilities. The stock is a compelling choice for investors as it is a pure-play renewables company with strong growth potential, world-class management and an attractive dividend yield. These fundamentals set it apart from other green energy companies that are sometimes unprofitable and trading at very high valuations.
EV Green Energy Stocks
Electric vehicles (EVs) is one of the highest exponentially growing green energy sector. Global EV sales doubled in 2021 on a year over year basis to 6.6 million, according to the International Energy Agency (IEA). The worldwide electric vehicle market is anticipated to grow from $287.36 billion in 2021 to $1,318.22 billion in 2028 at a CAGR of 24.3% in the forecasted period. We consider those projections to be conservative: the market has the potential to double YoY going forward as analysts call for EV sales to more than triple by 2025.
- Market cap: $836.88 billion
- Percentage growth since IPO: 20 937.15%
- Initial public offering year: 2010
Tesla, Inc. (NASDAQ: TSLA) is an American multinational automotive and green energy company headquartered in Austin, Texas. It designs and manufactures electric vehicles (cars and trucks), battery energy storage from home to grid-scale, solar panels, solar roof tiles, and related products and services. The company has achieved unmatched growth of its shares since its IPO in 2010. Tesla stock soared 20 937.15% since then to its current levels to around $807, making it one of the world’s most valuable companies. Its market capitalization comes at $836.88 billion which – for comparison – far exceeds oil major ExxonMobil with a market cap at $377.04 billion.
Tesla is considered the gold standard for mission-driven companies around the world. It aims to accelerate the world’s transition to sustainable energy and managed to put EVs on the global map of the transportation industry. It disrupts and revolutionizes the whole clean energy sector and is one of the most prominent bets for a green energy stock, holding massive growth potential.
- Market cap: $2.42 billion
- Percentage growth since IPO: -40.02%
- Initial public offering year: 2020
Nikola Corporation (NASDAQ: NKLA) is an American company headquartered in Phoenix, Arizona, U.S. that develops battery electric and hydrogen fuel cell trucks. Named after the famous inventor Nikola Tesla, the company stands out as innovative and disruptive for the heavy duty trucks sector as it has managed to commercialize EV and hydrogen fuel cell trucks. It went public in 2020 and in 2022 shipped 11 Tre battery electric trucks (BEV), marking a milestone of its first ever deliveries to customers.
For the whole 2022, the company projects deliveries of between 300 and 500 of its first battery-electric semitrucks to customers – known as the Nikola Tre. The corporation is expected to grow exponentially in the coming years, pioneering in the exponentially growing market of clean hydrogen. Nikola also develops hydrogen production and infrastructure and claims it can deliver hydrogen at market leading prices and within the ranges required to offer competitive lease rates for its truck customers – something that excites investors in green energy stocks.
Hydrogen Green Energy Stocks
Hydrogen is a clean energy source – a colorless gas, derived from water, that when burned releases energy without any greenhouse gasses, replacing entirely conventional fossil fuels. The global hydrogen generation market size was valued at $129.85 billion in 2021 and is forecasted to expand at a compound annual growth rate (CAGR) of 6.4% from 2022 to 2030. Demand for hydrogen was seen at 90 million metric tons for 2020 and according to conservative scenarios, by 2030 should spike to at least 212 million tons per year and between 500 and 900 million tons by 2050 annually.
- Market cap: $10.10 billion
- Percentage growth since IPO: -89.08%
- Initial public offering year: 1999
Plug Power (NASDAQ: PLUG) is a U.S.-based company, a leader in the hydrogen economy and one of the best green energy growth stocks. Its main business is manufacturing and selling hydrogen fuel cell systems that replace conventional combustion from fossil fuels and vehicles powered by electricity. It is a leader in the hydrogen fuel cells sector and the largest, most popular company driving the hydrogen economy, developing technologies disrupting traditional energy markets. Plug Power is in a leading position to drive forward the powerful clean energy solution green hydrogen. An investment in a Plug Power stock is an investment in green hydrogen in the medium and long-term across all value chains.
The company is also projected to grow exponentially. Revenue is forecasted at $900 million for 2022 (it was about $500 million in 2021), over $1.1 billion for 2023, over $1.7 billion for 2024 and about $3 billion in 2025. That revenue growth (500%) outpaces the hydrogen market growth around 10 times from 2020 till 2025 (55%). Currently, the Plug Power stock is 89% lower than its IPO price and almost 40% down since the start of the year.
The recent shortcomings for the shares are mostly considered an overeaction to some mishaps on U.S. climate spending and global economic uncerstainties which are causing investors to worry about the high risk and nascent hydrogen economy. However, over the long run, the company is seen as advancing its financial positions and rapidly accelerating its global hydrogen market share.
If you’d like a more detailed analysis of Plug Power and their prospects in 2023 and beyond, check out our Hydrogen Industry and Stocks Report.
Bloom Energy Stock
- Market cap: $3.03 billion
- Oercentage growth since IPO: -24.78%
- Initial public offering year: 2018
Bloom Energy (NYSE: BE) is a public company established in 2001 and headquartered in California, the U.S. It was publicly released in 2018. Bloom Energy manufactures and sells solid oxide fuel cells that produce electricity on-site. The company’s core product is the Bloom Energy Server, which is a stationary power generation system converting fuels like natural gas, biogas or hydrogen into electricity through an electrochemical process without combustion.
As a result, the servers emit less carbon emissions compared to conventional gas-fired power generation and eliminate other forms of air pollution entirely. The company is also a future player in the green hydrogen market with its recently introduced Bloom Electrolyzers that are 15% to 45% more efficient than any other product on the market.
Relevant: What Are The Hottest Top 5 Hydrogen Stocks?
Bloom Energy stock is one of the best green energy stocks as it is anticipated to grow following revenue upward expectations. Revenue in 2021 came at $972.2 million, and for 2022, it was $1.1 billion to $1.15 billion. In 2024, Bloom is expected to achieve stable revenues that could hit more than $2 billion. Even though the stock has fallen more than 24% since its public offering due to a nervious market reaction to the whole hydrogen sector, its fundamentals are pointing to stability in operations and expansions via international partnerships.
Substantial investments for the decarbonization of the global economy are expected to take place in the coming years and decades. IEA estimates that annual green energy investment need to reach over $4 trillion by 2030 and more than $100 trillion over the next three decades to achieve net zero targets.
If you’d like a more detailed analysis of Bloom Energy and their prospects in 2023 and beyond, check out our Hydrogen Industry and Stocks Report.
The continuous development and maturing of green energy sectors like EVs, fuel cell technologies, energy storage, and hydrogen will support scalabilty, decrease risk for private and public investments and reduce regulatory barriers, further boosting the green energy stock market.
An issue of national and international security, climate change is accelerating the global economy’s determination to switch to cleaner and greenhouse gas-free sources of energy, thus giving an additional advantage to renewable energy solutions.
With all those factors in place, saying that investing in green energy is a good idea would be an understatement.
Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Carbon Herald). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock, you should do your own research and reach your own conclusion or consult a financial advisor. Investing includes risks, including loss of principal.