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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.
5 best-performing renewable energy stocks
This list includes stocks involved in the production of renewable energy, ranked by 52 week price performance. Keep in mind that performance is only one data point, 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
Price performance (52 weeks)
Kenon Holdings Ltd.
Clearway Energy, Inc.
Atlantica Sustainable Infrastructure plc
Data is pulled from Fidelity's Stock Screener and is up to date as of March 2, 2022. 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.
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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.
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
Disclosure: The author held no positions in the aforementioned investments at the original time of publication.