6 Renewable Energy Stocks to Watch for in Winter 2022

If you want to invest in a greener future, renewable energy stocks can help you do that.
Alana Benson
Jan 20, 2022

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There are lots of reasons to be excited about advances in renewable energy: The field is helping to preserve the environment and creating new industries, and may make electric cars more affordable. If you want to get your investment portfolio involved in the green revolution, you can start by investing in renewable energy stocks.

Why should I invest in renewable energy?

Many people have personal or ethical reasons to invest in renewables, but the chance to help the planet isn’t the only potential benefit of including renewable energy in your portfolio. Investing in alternative energy can help diversify your holdings. When oil and other traditional energy resources are experiencing volatility, renewable investments may act as a stabilizing force.

Renewable energy is also becoming more affordable, making it more enticing to buyers and potentially to investors. The price of solar energy has dropped, as has the cost of solar panels themselves. Wind energy is also one of the fastest-growing energy sources in the world, and one of the cheapest.

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6 renewable energy stocks to watch

This list includes stocks involved in the production of renewable energy, ranked by market capitalization. Keep in mind that market cap is only one data point about these companies, and stocks that are currently performing well may not be the best-performing stocks next year — or even next week. Investing in individual stocks is inherently risky and should be done with caution.

» Don't want to pick your own investments? Check out the best robo-advisors for socially responsible investors

Name

Symbol

Current price

Market Cap in USD

Brookfield Renewable Partners L.P.

BEP

$34.98

9.7B

Algonquin Power & Utilities Corp.

AQN

$13.56

9.1B

Clearway Energy, Inc.

CWEN

$37.20

7.3B

NextEra Energy Partners, LP

NEP

$85.11

6.5B

Ormat Technologies, Inc.

ORA

$79.26

4.4B

Atlantica Sustainable Infrastructure plc

AY

$38.05

4.2B

Data is pulled from Google Finance and is up to date as of Dec. 3, 2021. Information is solely for informational purposes and not for trading purposes or advice. Quotes are not sourced from all markets. All stocks shown are traded on U.S. exchanges.

» Excited about energy stocks? Compare options among the best brokers for stock trading

An easier approach: ESG funds

If you’re excited about investing in wind and solar energy, there’s an easier way to do it than researching individual companies: mutual funds. These funds are like baskets of stocks — you invest in one fund and gain exposure to many companies all at once. ESG funds are graded in terms of their performance when it comes to environmental, social and governance factors. A fund that scores well in the “environmental” category likely avoids investing in companies with a large carbon footprint and may invest in multiple clean energy stocks.

According to independent research firm Morningstar, the number of sustainable index mutual funds and exchange-traded funds has more than doubled over the last few years — as has the money invested in them — giving sustainable investors more choice as to where they invest.

» Find alternative energy funds: Explore top-rated ESG funds

Frequently asked questions

The best energy stocks are the ones that work best for your individual portfolio, but here are a few to keep an eye on:

  • Brookfield Renewable Partners L.P. (BEP)

  • Algonquin Power & Utilities Corp. (AQN)

  • NextEra Energy Partners, LP (NEP)

  • Clearway Energy Inc. (CWEN)

  • Atlantica Sustainable Infrastructure PLC (AY)

  • Ormat Technologies, Inc. (ORA)

Contrary to popular belief, performance is not necessarily the most important thing to think about. Investing in the best-performing energy stock may sound like a good idea, but there are other factors to consider, including your existing portfolio allocation. For example, if you already have several solar energy investments, adding another one does not help you diversify your holdings. If your portfolio heavily represents one industry, and there is a widespread issue within that industry (such as a shortage of materials used to make solar panels), your portfolio is more at risk of being affected.

Also consider the kinds of investments you already have. For example, is most of your portfolio already made up of individual stocks? It’s a good rule of thumb to limit your exposure to individual companies — diversified investments like mutual funds are often a wise choice to make up the bulk of your portfolio.

Finally, always research a stock before buying it. How long the company has been in business, its annual revenue and its ESG score are all good things to consider before buying a stock.

This will depend on the particular stock. Some clean energy companies, such as Tesla, are fairly expensive. At the time of this writing, Tesla stock was priced over $660 a share. Other clean energy stocks, such as NextEra Energy, are far less expensive, selling for around $70 a share. Like all stocks, clean energy stock prices may fluctuate due to larger market forces — in this case, factors like new legislation, oil prices and public interest.

No, if your energy stocks decrease in value, you likely will not owe any money. If the company you invested in goes out of business, you lose the value of your investment, but you generally will not lose more than you invested unless you engaged in riskier trading strategies. For instance, if you bought a wind energy stock for $100 and the company went out of business, you would lose the $100, but you would not owe $100.

Disclosure: The author held no positions in the aforementioned investments at the original time of publication.

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