5 Best Renewable Energy Stocks for 2025

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5 Best Renewable Energy Stocks for 2025

The global economy is rapidly working on switching energy sources. Due to climate change concerns, the world is moving away from carbon-based fossil fuels to cleaner alternative energy sources, including renewable energy. The decarbonization of the global economy will take trillions of dollars in investment each year.

Renewable energy will play a crucial role in this energy transition. Here’s a closer look at how to invest in the renewable energy industry.

Why invest?

Why invest in clean energy stocks?

Renewable energy sources, such as wind, solar, and hydroelectric power, supply more than 20% of the electricity generated by the U.S. power sector. The industry has been growing briskly, quadrupling its electricity-generating capacity over the past decade. Given increasing climate change concerns, the pace has quickened in recent years. It needs to continue accelerating to help rapidly decarbonize the economy.

Climate change is forcing companies and other institutions to focus on how they can do their part to decarbonize. Many companies are signing power purchase agreements (PPAs) with electric utilities and other electricity generators to specifically buy power produced from renewable sources.

Meanwhile, others are investing directly in renewable energy development projects. Some are making renewable investments to be viewed as socially responsible global citizens. However, clean energy is increasingly economical due to the falling costs of solar panels, wind turbines, and batteries for energy storage, making the sector a more attractive investment opportunity.

Governments are also working to accelerate global decarbonization by proposing and passing legislation to increase investment in the sector.

Many view these spending packages as only a down payment on the investment needed to decarbonize the economy. The view suggests that future legislation could further boost the country’s investment level.

Top renewable energy stocks for 2025

Five top renewable energy stocks in 2025

Many companies focus on renewable energy, putting them in an excellent position to benefit from this investment megatrend. However, a few energy companies stand out above their peers as the best renewable energy stocks to buy. Top-tier green energy companies include:

Data source: Ycharts. Market cap data as of Jan. 10, 2025.

Renewable Energy Stock

Ticker Symbol

Market Capitalization

NextEra Energy

NYSE:NEE

$138.9 billion

Brookfield Renewable

NYSE:BEP, NYSE:BEPC

$6.3 billion

Clearway Energy

NYSE:CWEN, NYSE:CWEN.A

$2.9 billion

First Solar

NASDAQ:FSLR

$20.1 billion

Constellation Energy

NASDAQ:CEG

$95.9 billion

Here’s a closer look at these leading renewable energy stocks.

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1. NextEra Energy

NextEra Energy (NEE 5.2%) is one of the world’s largest producers of wind and solar energy. It generates power at its Florida utilities and its energy resources segment, which sells electricity under PPAs to other utilities and large corporate buyers.

Few companies are betting bigger on renewable energy than NextEra Energy. The utility’s ambitious Real Zero plan aims to eliminate carbon emissions from its operations by 2045. It plans to significantly expand its solar energy and storage capacity while replacing natural gas in its power plants with green hydrogen and renewable natural gas.

NextEra has an excellent track record of creating shareholder value by investing in renewable energy. It has produced an average annual total return of 15.7% during the past 20 years (well ahead of the S&P 500’s 10.2% average annual total return). Its above-average growth rate has powered strong investment returns. NextEra has expanded its adjusted earnings per share (EPS) at a 9% compound annual rate since 2003. Meanwhile, it has boosted its dividend at a 10% annual rate during that period, pushing its growth streak to 30 consecutive years.

The company expects its investments to continue paying dividends to shareholders. It predicts earnings will increase at or near the top end of its 6% to 8% annual target range through 2027. It also expects to deliver dividend growth of around 10% annually through at least 2026. Meanwhile, it is likely to maintain one of the best balance sheets in the utility sector, giving the company the financial flexibility to continue expanding.

2. Brookfield Renewable

Brookfield Renewable (BEP 2.84%) is a global leader in renewable energy. It’s one of the world’s largest producers of hydroelectric power, which comprises almost half its portfolio. Brookfield also has been increasing its wind (onshore and offshore), solar (utility-scale and distributed generation, such as rooftop solar), and energy storage expertise. The company sells the bulk of its power under long-term PPAs that generate steady cash flow.

Brookfield has an excellent track record. It has increased its dividend payments at a 6% compound annual rate since 2001 while growing its funds from operations (FFO) per share at a 12% rate since 2016. The steady expansion of its portfolio through acquisitions and development projects has driven its growth.

Brookfield sees even more growth ahead. It believes it can deliver more than 10% annual FFO per share growth over the next decade, powered by rising power prices, its extensive pipeline of renewable energy development projects, and additional acquisitions. The earnings growth should enable the company to hike its dividend by 5% to 9% annually — making it one of the best renewable energy dividend stocks. It expects to maintain a top-notch balance sheet, giving it the financial flexibility to keep expanding.

Carbon Credits

Carbon credits are tradeable permits that grant permission to emit a specific quantity of carbon dioxide or other greenhouse gases.

3. Clearway Energy

Clearway Energy (CWEN 2.25%) 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. Clearway also sells its power via PPAs that generate a steady cash flow for the company.

The company has a lot of growth lined up. A combination of higher power prices, organic expansion projects, and secured acquisitions of operating assets and development projects provide Clearway with increasing growth visibility through 2027. It expects to grow its cash available for distribution by a 7.5% to 12% annual rate through 2027.

That positions the company to grow its dividend within its 5% to 8% annual target range for the foreseeable future. Meanwhile, it anticipates maintaining a solid financial profile, which will give it the flexibility to continue expanding. Clearway Energy is positioned to continue capitalizing on opportunities to increase its renewable energy operations in the coming years while creating substantial value for shareholders.

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4. First Solar

First Solar (FSLR -3.37%) develops and manufactures thin-film solar panels that use their larger size to generate more energy than competing technologies, making them ideal for utility-scale solar energy projects.

As one of the world’s leading solar panel makers, the company is in an excellent position as demand for solar panels accelerates. It’s actively investing to increase its capacity to produce solar panels and meet demand. Entering 2025, it had contracts in place to sell panels through 2030, giving it significant visibility into future revenue.

First Solar has the means to continue expanding because it boasts one of the best balance sheets in the sector. Even with its heavy investments in building new manufacturing capacity, the company expected to end 2024 with $500 million to $700 million in net cash. The cushion gives it tremendous financial flexibility to continue expanding to capitalize on the increasing demand for solar panels. It was building two new manufacturing facilities in the U.S. (Alabama and Louisiana), with the first factory starting up at the end of 2024 and the latter expected to begin producing panels in 2026.

It also has the flexibility to make acquisitions to enhance its technology and operations. For example, in 2023, First Solar acquired leading European thin film company Evolar to improve its ability to develop next-generation solar technology. Meanwhile, it bought a facility in Ohio in 2024 that it plans to turn into a new distribution facility for its manufacturing operations in the state.

Fiscal Quarter

In the financial world, a quarter refers to a three-month period used for reporting and recording financial performance, typically representing one-fourth of a company’s fiscal year.

5. Constellation Energy

Constellation Energy (CEG 0.35%) is the country’s largest producer of carbon-free energy. That’s largely due to its leading fleet of nuclear energy plants. The company also has a diverse mix of hydro, wind, and solar energy assets. Overall, Constellation powers more than 20 million homes and businesses, with 90% of its generation coming from carbon-free energy sources.

The company took a big step toward enhancing its already leading clean energy position in early 2025 by agreeing to acquire Calpine in a $26.6 billion deal. The transaction will create the country’s largest clean energy provider, adding Calpine’s natural gas, geothermal, and battery storage fleet to its portfolio. Those assets supply baseload power to help mitigate the intermittency of renewable energy.

The combined company expects to have ample opportunities to expand its clean energy capacity. Current and potential growth projects include nuclear energy restarts and renewals, solar plus battery storage projects, carbon capture and storage, and new natural gas capacity.

Related investing topics

Strong returns for investors

Climate change and socially responsible investing are major catalysts for the clean energy revolution. The trend will drive trillions of dollars of investment in renewable energy in the decades ahead.

Although the rising tide of clean energy should lift all boats, the top renewable energy stocks should generate some of the best returns for investors. Green energy companies that have already proven to be value creators and have the financial strength to capture opportunities should yield outsize total returns in the coming years.

FAQ

Renewable energy FAQ

What is renewable energy?

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Green energy sources include:

  • Wind.
  • Solar.
  • Hydro.
  • Biomass.
  • Geothermal.
  • Ocean waves and currents.
  • Green hydrogen.

Is renewable energy a good investment?

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The clean energy sector represents a massive opportunity for investors. However, they must pick stocks carefully since not all will take full advantage of this opportunity. Two key characteristics to look for are a strong balance sheet and a solar energy-focused growth profile. Those factors could give a company the power to generate higher returns.

Which stock is best for renewable energy?

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There are several top renewable energy companies. Brookfield Renewable is one of the best stocks for renewable energy. The company has a globally diversified renewable energy platform, including hydroelectric, wind, and solar operations. It also has a sustainable solutions business, which invests in manufacturing solar panels, producing green hydrogen, and making renewable natural gas. The company also has an excellent track record of growing shareholder value, including increasing its dividend at a 6% compound annual rate over the last 20 years.

Are there any renewable energy ETFs?

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There are several renewable energy ETFs. Three of the biggest by assets under management (AUM) in early 2025 were:

  • Invesco Solar ETF (NYSEMKT: TAN) with $873.6 million in AUM.
  • First Trust NASDAQ Clean Edge Energy Index Fund (NASDAQ: QCLN): $588.7 million.
  • iShare Global Clean Energy ETF (NYSEMKT: ICLN): $1.5 billion.

Expert Q and A

Expert Q&A on renewable energy

The Motley Fool got the chance to chat with investing expert Professor Priya Parrish of University of Chicago Booth School of Business. Here’s what Parrish had to say about investing in the renewable energy realm.

Expert advice

Professor Priya Parrish – Adjunct Assistant Professor of Strategy, University of Chicago Booth School of Business

Professor Priya Parrish

Adjunct Assistant Professor of Strategy, University of Chicago Booth School of Business

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The Motley Fool: What is renewable or green energy?

Professor Parrish: Energy generated from natural resources that does not product pollution. Solar, wind, and geothermal are examples of green energy sources that are also renewable. There are a number of businesses and investment opportunities related to the renewable energy sector, from infrastructure to financing and workforce development.

The Motley Fool: What’s your advice for someone looking to invest in renewable energy?

Professor Parrish: Investors with a genuine passion for and commitment to sustainability are more likely to succeed, as the market is complex and changing fast. Entrepreneurs in this sector are also more driven to take capital from those firms with a mission alignment. This is related to the need for sustainability investors to understand these markets in-depth from multiple angles.

This includes:

  • Both the supply and demand drivers
  • Policy and regulatory factors
  • Business models and operational considerations
  • Supply chain risks

We see successful investors bringing forward both operating experience in the energy, utilities, or infrastructure industries as well as a sound understanding of energy and commodity markets and policies.

The Motley Fool: What are some of the pros and cons of investing in renewable energy?

Professor Parrish: Investing in secular growth trends that are tied to real societal needs provides a strong investment backdrop for long-term investors. However, in the past few years we have seen an influx of capital looking to invest in sustainability deals as there is growing awareness of the opportunity. Many of these investors are unsophisticated and can create market noise. For investors willing to invest in developing a deep knowledge of renewable technologies, markets and companies, I think it is an opportunity worth pursuing.

The Motley Fool: What are some emerging areas of renewable energy? Are you particularly optimistic about any of them?

Professor Parrish: In addition to energy transition, we are optimistic about related opportunities in waste reduction, climate risk management in the supply chain, sustainable food and agriculture, and carbon capture.

Matt DiLallo has positions in Brookfield Renewable Partners, Clearway Energy, First Solar, and NextEra Energy. The Motley Fool has positions in and recommends First Solar and NextEra Energy. The Motley Fool recommends Brookfield Renewable Partners and Constellation Energy. The Motley Fool has a disclosure policy.

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