The renewable energy field has made many advances in the past few years. The field is working to preserve the environment and create new industries. According to the International Energy Agency (IEA), renewable energy reached 30% of global electricity generation capacity in 2020. Additionally, they see renewable energy overtaking coal to become the largest source of energy generation by 2025. Hopefully, it’ll supply a third of the world’s power.
You too can be a part of this in terms of how you invest your money. The chance to help the planet isn’t the only benefit of investing in renewable energy stocks. Investing in alternative energy can help to diversify your portfolio. In case oil and other traditional energy sources are experiencing volatility, your renewable energy investments can act as a counterforce. Lastly, renewable energy is also becoming more affordable, making it more available to buyers and investors.
The cost of solar panels and solar energy has decreased. Wind energy is one of the cheapest and fastest-growing energy sources around the world. Disclaimer: Keep in mind that the exact numbers listed below will have probably fluctuated by the time this article is published.
1. First Solar (NASDAQ: FSLR)
First Solar is one of the leaders in developing thin-film solar panels. Firstly, panels produce electricity at a much lower cost per watt than traditional silicon-based panels. Secondly, they do a lot better in the heat and humidity and are able to shed snow and debris more quickly. Lastly, they have a strong balance sheet, carrying a large net cash position that provides the company with interest income. This sets them apart from their competitors as their competitors tend to have a lot of debt on their balance sheets and have to pay interest to third-party lenders.
Solar’s good financial health reduces their costs and lets them continue to expand their manufacturing capabilities. Investors can most likely expect high growth potential as the company expands its solar manufacturing capacity.
2. Brookfield Renewable Partners (NYSE:BEP) (NYSE:BEPC)
Brookfield is one of the largest publicly traded renewable energy companies. They run a global multi-technology platform that includes solar energy, hydroelectric, and wind generation facilities as well as energy storage assets. They sell the majority of their power under fixed-rate power purchase agreements or PPAs. These long-term contracts give the company continuous cash flow which Brookfield uses to pay a high dividend and invest in expanding their portfolio. Also, they have a very strong balance sheet with a lot of cash, available credit, and one of the highest investment-grade bond ratings in the renewable energy sector. They claim to have the capability to invest $800 million to $1 billion every year into expanding their renewable energy portfolio. This should result in cash flow growth per share of 11% to 16% every year and support annual increases in their dividend of 5% to 9%.
3. NextEra Energy (NYSE:NEE)
They operate under two different segments. Firstly, rate-regulated electric utilities distribute power to businesses. Secondly, consumers and a competitive energy segment that produces electricity and moves natural gas under long-term, fixed-fee agreements. Both of these combined help to produce more energy from the sun and wind than any other company. In addition, they have a steady cash flow which they use to pay dividends and invest in expansion.
In addition to the stable business model, they have one of the highest credit ratings among the largest electric utilities. NextEra Energy controls NextEra Energy Partners (NYSE: NEP), which gives them more investment capacity. This is because they can sell contracted clean energy assets to them for cash in order to reinvest. Additionally, they have the capacity to invest billions of dollars in the next few years in renewable energy projects which could increase growth at least 6% to 8% per year and allow them to increase their dividend by about 10% per year.
4. Renewable Energy Group, Inc. (NASDAQ: REGI)
This company, based in the United States. They provide clean fuels like biodiesel, renewable diesel, and a mix of the two known as REG Ultra Clean. They run twelve biorefineries around America and Europe. They’re part of the Fortune 1000 list of top companies for revenue.
5. SunPower Corporation (NASDAQ:SPWR)
This company, based in Silicon Valley, is partly owned by Total SE (NYSE: TOT), a French multinational oil and gas company. They develop and produce solar panels and photovoltaic cells and have received more than 1,000 patents for solar innovation.
6. Canadian Solar Inc (NASDAQ:CSIQ)
This company, producing Solar PV Modules. It has subsidiaries in twenty different countries and its clients come from more than 150 different countries. Canadian Solar recently announced that they have decided to use the money raised to add manufacturing capacity and double their module shipments in 2020.
7. JinkoSolar Holding Co., Ltd. (NYSE:JKS)
This company was previously a water manufacturer in 2006 and has transitioned to being a solar panel manufacturer. In just over a decade, this Chinese renewable energy company is at the top of the industry by market share. They were also listed in Fortune’s list of 100 Fastest Growing Companies in the World in 2016.
8. CropEnergies AG (XETRA:CE2.DE)
This company is a subsidiary of Sudzucke, a German sugar producer. They are the leading European producer of ethanol. Though it’s not as clean of a resource as wind or solar, it’s still a viable source of renewable energy. They also produced biofuels from renewable raw materials like sugar syrups, wheat, and raw alcohol from wheat, barley, and maize.
9. First Trust Global Wind Energy ETF FAN
This is a concentrated ETF that invests $406 million, or 60%, in wind-industry companies. The rest of their portfolio is invested in companies involved in wind-power generation. They hold some large, traditional power companies like Duke Energy Corp. and NextEra Energy Inc. The portfolio has 50 stocks weighted by market capitalization and the expense rate is 0.62%.
10. Invesco Global Clean Energy ETF PBD
Lastly, This is another ETF that has $301 million in assets and follows an actively managed strategy. In other words, they follow an index designed to include companies with greater potential for stock-price appreciation. They hold around 100 stocks with a modified equal weighting and their expense ratio is 0.75%.
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