Categories: Energy Stocks
Topics: Investing in Energy

Renewable Energy Stocks: The Best Way to Play the Clean Energy Transition

Editor’s Note: It seems like every week, a new headline about renewable energy is dominating the news. From a growing number of solar installations to falling costs related to the technology, something always seems to be happening that paints the picture of renewable energy becoming a dominant force in our society. All of this is out of necessity, but there’s going to be a lot of money made by the investors who back the right companies. That’s why Nick recently released a brand-new video on how to best take advantage of the green energy boom for the best profit potential. It shows you everything you need to know about this trend and how it’s going to make some investors very wealthy.

Renewable energy isn’t coming, it’s already here. 

Over the past few years, it’s been made clear just how important it is that we try to prevent the deadliest effects of climate change. 

Storms, wildfires, droughts, and countless other disasters have taken lives and caused untold damage, and much of that can be traced back to our reliance on fossil fuels. 

We’re now seeing a shift in attitude when it comes to how we use the resources around us to generate power. Oil and gas are out and renewable energy is in. 

Renewable power sources like wind and solar, among others, are seeing an uptick in popularity that’s only going to continue over the coming years until those fossil fuels are on the verge of being phased out completely. 

And as always, any time there’s a massive societal shift, there are ways to make a massive profit if you know exactly where to put your money. 

That’s what we’ll be looking at in this article. So continue reading to see just why investing in renewable energy is something every investor should be doing, and learn just what some of the best renewable energy stocks are. 

Why Invest in Renewable Energy?

Simply put, renewable energy is positioned to be one of the biggest investment sectors of the next few decades. 

The situation with Earth’s climate is growing increasingly dire. That’s why you’re seeing all of these headlines about new green energy technologies being introduced. Additionally, it’s why governments all over the world are ramping up efforts to rework power grids to get away from, or at least become less reliant on, oil and gas. 

Instead, wind, solar, and other forms of renewable power are taking center stage in power generation in the 21st century. 

The sector is going to be so big that 35% of global power generation will come from renewable capacity by 2025. This comes as electricity demand is set to grow 3% per year over the next three years, according to projections from the International Energy Agency. 

Here in the US, solar and other forms of renewable energy are projected to make up a quarter of the country’s electricity generation at some point next year. As this happens, it will take away market share from coal and gas. This signifies a massive shift away from the way things have been done for decades as we move into a greener future. 

Governments are being forced to acknowledge the damage being done by climate change, which is why you’re seeing this section of the energy market take off as much as it has and will continue to do. 

It also helps that, here in the US, the Inflation Reduction Act includes production and investment tax credits that companies can take advantage of. This will create more of an incentive for companies to put their money behind clean energy production to help the government meet goals related to fighting the effects of climate change. 

So how much road does this industry have ahead of it to grow? 

As of 2023, the industry is said to be worth somewhere around $1.1 trillion. By 2030, that number is projected to nearly double. That’s further proof that, as far as renewable energy and the fight against climate change has come, there is still much, much more to do. 

For investors, that means that the market is going to be rich with investment opportunities. 

Not only will there be plenty of opportunities to invest in the best renewable energy stocks but many of those picks will be long-term plays as this technology replaces long-standing fossil fuel power as entire countries rework their power grids to include things like solar panels and wind power. 

As an investor, the right investments will not only be growth stocks, they’ll be stocks that could serve as cornerstones of your portfolio for years to come. It’s just a matter of picking the right ones.

What Are the Best Renewable Energy Stocks?

When thinking about the best renewable energy stocks, there are a few names to consider. We’ll look at a handful here and how they can help investors take full advantage of the surge in renewable energy demand that the world will be seeing over the next few years. 

NextEra Energy 

NextEra Energy (NYSE: NEE) has the advantage of being one of the largest producers of wind and solar energy on the planet. It provides 5% of all generation in the US and has a presence in almost 40 US states as well as four provinces throughout Canada. 

It also has a business that acquires assets for renewable energy transmission and has spent time becoming a company that generates more than 95% of its electricity from renewable sources like natural gas, solar, and wind. 

From there, the company plans to ramp up its renewable energy capacity, and it plans for a projected earnings growth of between 6% and 8% from 2024 to 2026. 

This, along with the fact that the company is a Dividend Aristocrat, that is a company that has increased its dividend for at least 25 consecutive years, makes NextEra one name to consider when thinking about the best renewable energy stocks. 

If this is a sector you’re considering investing in, then NextEra is one stock that could serve as one of your cornerstone investments. 

First Solar 

First Solar (NASDAQ: FSLR) is an Arizona-based manufacturer of solar panels known for the manufacturing of cadmium telluride (CdTe)-based photovoltaic modules that offer greater efficiency and durability along with lower cost compared to traditional silicon panels. 

This has made it a leading manufacturer among solar panel makers, and it’s a good position for the company to be in. As the demand for renewable technology climbs, First Solar is setting its ambitions on providing utility-scale solar energy projects. 

The company has been working to increase its manufacturing capacity to make this a reality, and it has the cash on hand to do that to the tune of just over $1 billion. It could also use that money to make acquisitions in the space, thus improving its ability to carry out its goals related to expansion and developing solar technologies that keep it at the forefront of the sector. 

Factors like this are why First Solar is a favorite among renewable energy ETFs and why analysts see plenty of upside ahead for the company. From its current level of around $150 per share, analyst consensus is that it could climb to around $230 throughout 2024.

There’s no question, when talking about the best renewable energy stocks, many would consider First Solar to be one to watch.

More Names to Look At

As it stands right now, the companies I mentioned above are strong bets on thriving in the ongoing clean energy boom, but there are a few more I think you should know about.

These are other companies that are perfectly positioned to take advantage of the clean energy investment surge we’re about to see over the next few years. They offer everything from raw materials to improved battery technology that will be crucial to the sector, and they’re perfectly positioned to take advantage of the billions of dollars in stimulus that the Biden administration is pumping into the sector.

From that stimulus will come the kinds of profit opportunities that have the potential to generate trillions of dollars for investors who buy in. 

This is the kind of legacy-building wealth that only comes along once in a generation. Fortunately, it’s just the beginning of the trend, so the biggest windfalls haven’t been made yet. 

You don’t want to miss out on this opportunity, because there’s no telling when, or if, something this life-changing will happen again.

Keep your eyes open,

Ryan Stancil
Editor, Daily Profit Cycle