The 12 Best Clean Energy Stocks to Fuel Your Portfolio in 2024

The transition toward renewable energy and reduced carbon emissions provide substantial growth runways for the clean energy sector – and related stocks – in the years and decades ahead. With most nations targeting net-zero emissions by 2050, solar, wind, hydrogen, and other zero-carbon technologies require rapid scaling. This article explores top public clean energy stocks positioned in front of these accelerating global decarbonization trends.

The worldwide clean energy industry saw over $1 trillion in asset financing and infrastructure commitments in 2021 alone as electrification and sustainability initiatives gained momentum. Renewable energy capacity additions are slated to hit $380 billion per year through 2030 as countries move aggressively to hit the Paris Agreement and net-zero pledges.

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Renewable Power Levelized Costs Plummeting

Generation Source	2020 Share of Global Electricity	2040 Projected Share
Renewables	29%	>60%
Coal	36%	<10%
Gas	23%	~15%
Nuclear	10%	10-15%

Source: IEA – Renewables Set To Become The Global Powerhouse

Adding industry statistic tables along with the sources helps provide relevant supporting data for the analysis of clean energy trends and stocks. Please let me know if you would like me to include any other additional tables or links within the article.

This exponential growth will generate substantial profit upside for companies developing low-carbon solutions – spanning technologies like solar PV panels, lithium-ion batteries, hydrogen electrolyzers, fuel cells, geothermal plants, biofuels, and more. Investors positioning portfolios to benefit from the anticipated $100+ trillion in climate tech infrastructure investments this century stand to realize outsized returns.

This article distills the clean energy stock universe highlighting prime publicly-traded companies strongly aligned with surging global renewable energy and transport electrification themes.

Key Takeaways

• Global adoption of solar, wind, EVs, hydrogen, and renewable power sources is slated to expand rapidly this decade
• Clean energy stocks are primed for exceptional revenue and profit growth if execution meets projections
• Leaders across renewables sub-sectors like Vestas in wind and Enphase in solar outlined
• Financial profile metrics, growth rates, and operational metrics differentiate winner stocks
• Anticipated policy shifts and energy inflation impacts require navigating some volatility

What Are Clean Energy Stocks

Clean energy stocks represent publicly-listed companies advancing renewable power generation, energy storage systems, electric mobility solutions, and related technologies reducing global carbon emissions:

• Wind turbine manufacturers like Vestas and Siemens Gamesa
• Solar panel and microinverter producers such as First Solar, SolarEdge, and Enphase
• Geothermal plant owner-operators including Ormat Technologies and Polaris Infrastructure
• Lithium-ion battery and energy storage leaders Albemarle, Livent Corporation
• Biofuels manufacturers Renewable Energy Group, Enviva Partners
• Hydrogen fuel cell makers Plug Power, Ballard Power Systems and Bloom Energy
• Electric vehicle leaders BYD Company, NIO, Li Auto, and Proterra
• Green hydrogen production technologies such as Nel ASA and ITM Power

Essentially any company facilitating expanded electrification of energy infrastructure through renewables, driving efficiency gains relative to fossil fuels, or supporting decarbonization of transportation is considered a clean energy stock.

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Key Industry Drivers

Four primary factors underpin the accelerating growth of companies within the clean energy sector:

1. Decarbonization Policy Mandates – Stricter emissions targets from governments forcing utility companies to add renewable generation and favor electric solutions over internal combustion across transport. These mandates incentivize private sector investments in clean technologies.
2. Levelized Cost Parity – Marked improvements in underlying technology performance and production scale benefits have brought the unsubsidized cost of solar and wind generation below alternatives like coal and gas-fired power on a levelized $/MWh basis in most geographies. This breaks down previous cost barriers.
3. Energy Security Policies – Geopolitical instability and supply chain vulnerabilities have increased policymakers’ focus on expanding domestic renewable energy assets improving national energy independence and security. This further supports growth in areas like solar, wind, and green hydrogen.
4. ESG Investment Flows – Trillions in investment dollars are reallocating toward companies helping combat climate change. This provides a steady funding tailwind to clean energy companies executing net-zero-aligned business models.

In combination, these drivers underpin a positive multi-decade growth outlook for clean energy stocks as the global economy pivots decisively toward renewable solutions.

Why Invest in Clean Energy Stocks

Here are six core reasons investors should evaluate and consider adding exposure to clean energy stocks:

Lithium-Ion Battery Megafactory Pipeline

BloombergNEF EV Battery Capacity Forecast	2020 GWh	2025 GWh	2030 GWh
Battery Megafactories	709 GWh	3,267 GWh	8,239 GWh

Source: BloombergNEF Electric Vehicle Outlook 2022

1. Exponential Industry Growth

Bloomberg New Energy Finance projects over $1.7 trillion per year in renewable capacity investments by 2030, rising from $380 billion last year.

With most nations targeting 80-100% carbon-free power by 2050, most clean energy segments are poised for compound annual growth rates exceeding 20% for years to come.

2. Profitability Inflection Point

Many clean energy leaders reached scale and are entering sustained profitability – providing fundamentals upside beyond just growth expectations. SolarEdge (35% operating margins) and Enphase (30% operating margins) demonstrate the profit leverage now being realized in renewable sectors.

3. Low Valuations Relative to Growth

Most clean energy stocks trade at Price/Sales and EV/EBITDA multiples materially below technology peers and the S&P 500 averages despite far higher top-line growth projections through 2030. This signal disconnects with strong fundamentals.

P/S Ratio Comparisons

Company	2022 P/S Ratio	3 Yr Revenue CAGR
SolarEdge	5.8x	29%
Bloom Energy	4.2x	22%
Tesla	15.6x	50%
Microsoft	12.4x	19%
S&P 500	2.4x	14%

4. Long Runways For Growth

Just 3% of vehicles globally are electric today while just 10% of primary energy demand is met by renewables. Enormous headroom remains for renewable technologies to expand market penetration in a sector moving to electrify everything.

5. Geopolitical Energy Security

Russia’s moves choking European gas supplies increased policymaker urgency to develop domestic renewables preventing reliance on hostile foreign energy imports long term. This cements support for clean energy leaders.

6. Hyper-Growth Segments

Emerging opportunities in green hydrogen production, energy storage, smart grids, and software optimization surround anchor clean energy sectors accelerating growth rates further for selected stocks.

Evaluating this combination of factors underscores the compelling risk-reward proposition clean energy equities offer investors today.

Try Out The: The 12 Best Clean Energy Stocks to Fuel Your Portfolio

12 Top Clean Energy Stocks

Here is a selection of the highest potential publicly-listed clean energy stocks across solar, wind, hydrogen, and geothermal technology leaders:

Solar Energy Stocks

SolarEdge Technologies (SEDG)

• Specializes in smart energy solutions optimizing power generation and management
• Leader in commercial and residential solar system power optimizers, and inverters (87% market share in MLPE)
• $2.7 billion 2022 revenues, 35% operating margins, 25.1% 3-year sales CAGR
• Top 5 holdings of the Invesco Solar ETF (TAN)

Enphase Energy (ENPH)

• Pioneered microinverter category transforming solar design capabilities
• Produces intelligent software managing solar and storage assets
• 54% revenue CAGR past 3 years – $1.4 billion 2022 revenues
• World’s #1 solar MLPE provider – 280 patents secured

First Solar Inc. (FSLR)

• Only U.S.-headquartered firm among the top 10 solar manufacturers globally
• Low-carbon thin film photovoltaic (PV) technology proven over decades
• Rapidly expanding module production capacity targeting over 20 GW by 2025
• $2.9 billion 2022 revenue, net cash positive balance sheet

Top Wind Energy Stocks

Vestas Wind Systems (VWS.CO)

• Global leader – installed over 184 GW of wind power capacity since 1979
• Dominant 31% share of cumulative worldwide onshore wind installations
• Key innovators increasing reliability and lowering the Cost of Energy
• FY 2022 guidance implies a 25% EBIT margin on $18 billion in sales
• Fortress balance sheet including $3 billion in cash

Ørsted A/S (ORSTED)

• A global leader focused entirely on renewables – offshore wind powerhouse
• Constructed 13.9 GW representing 35% of total global offshore wind capacity
• Added 5.6 GW (+22%) net offshore wind capacity past two years
• $3.5 billion 2022 EBITDA, well funded to drive deep offshore market growth

Siemens Gamesa Renewable Energy (GCTAF)

• Formed through 2017 merger – 2nd largest global wind turbine OEM by capacity
• Leader pushing offshore wind turbine scale – prototype 12 MW turbine under testing
• €9.1 billion order backlog implies solid growth underpinning stock
• Cost structure optimization and service growth boost profitability

Hydrogen Fuel Cell Stocks

Plug Power Inc. (PLUG)

• Leading maker of proton exchange membrane fuel cell systems and hydrogen solutions
• Growing rapidly – compound annual 30% sales growth over 5 years – $812 million 2022 revenue guidance midpoint
• Expanding rapidly in hydrogen fueling station installations for electric vehicles
• $5 billion cash via strategic investments confirms large ambitions

Ballard Power Systems (BLDP)

• Pure-play maker of proton exchange membrane fuel cell stacks/power modules
• Heavy early exposure to fuel cell applications for EVs, forklifts, and distribution trucks proves the viability
• Collaborations with industry leaders: Weichai, Mahle, Linamar, Siemens Energy confirming fuel cell traction
• Now seen reaching positive EBITDA levels in 2025 with operating leverage

Bloom Energy (BE)

• Leading producer of high-temperature solid oxide fuel cells converting methane gas into electricity without combustion
• Over 500 megawatts deployed to date – proven solution with 11+ years of field operation
• Transitioning production lines toward green hydrogen compatibility significantly expands the addressable market
• Added revenue dimension developing distributed hydrogen production infrastructure

Geothermal & Bioenergy Stocks

Albemarle Corporation (ALB)

• Global specialty chemicals leader – among largest lithium compounds producers
• Key lithium supplier feeding explosive growth in lithium-ion batteries for EVs and grid storage
• Low-cost lithium resource ownership driving industry-leading profit margins above 34%
• Set to grow lithium sales at 25-30% CAGR in line with robust demand
• Leveraged to large climate infrastructure spend – lithium is a key renewable enabler

Geothermal Development Associates Ltd. (GDA.V)

• Junior renewable power producer focused on starting commercial geothermal plants
• Currently advancing projects within the Rocky Mountain region and Gulf Coast area
• Leveraged undersupplied domestic geothermal electricity generation growth
• Speculative growth potential aligned with grossly underexploited US geothermal resource

Capstone Green Energy (CGRN)

• Designs, manufactures, and services microturbine systems running on renewable fuels
• Transitioning product mix toward renewable natural gas, hydrogen usage
• Strategic acquisitions enhancing business model integrating heat pumps, energy software, and power solutions

Renewable Energy Group (REGI)

• Leading North American producer of liquid transportation biofuels
• State-of-the-art biorefineries efficiently convert waste oils, and leftover grease into diesel fuels displacing oil
• Produces fuel meeting 90%+ greenhouse gas reduction thresholds – approved under carbon credit programs
• Positioning for low carbon intensity feedstocks (agricultural residues etc) to drive further decarbonization potential

Assessing Clean Energy Stocks

When analyzing individual stocks within the clean energy sector, investors should focus both on financial profile metrics reflecting fundamentals alongside qualitative drivers underpinning growth and technology competitiveness factors:

Key Financial Metrics

• Historical and Projected Revenue Growth Rates
• Declining Losses Leading To Expanding Profitability
• Debt Profile – Funding Capacity Without Dilution Risks
• Capital Expenditures Scalability

Key Qualitative Factors

• Technological Innovation/Advantages
• Management Execution Ability
• Brand/Reputation Position vs. Competitors
• Exposure to High Growth Clean Energy Sub-Segments

Leading companies will demonstrate consistently strong performance marrying both sets of factors – financials and qualitative strengths reflecting competitive advantages that can drive bookmark-beating growth. Being selective and avoiding unproven or speculative names without a handle on profit drivers is key.

Investing Approach in Clean Energy Stocks

Leading Clean Energy ETFs By Assets

Fund Name	Tickers	Assets Under Mgmt	Top 5 Weighted Holdings
iShares Global Clean Energy ETF	ICLN	$5.3B	ENPH 7.1%, ORSTED 6.8%, VESTAS WIND 5.9%, PLUG 5.8%, FSLR 5.5%
Invesco Solar ETF	TAN	$3.1B	ENPH 23.6%, SEDG 17.5%, SOL 14%, FSLR 10.6%, RUN 8%
First Trust NASDAQ Clean Edge Green Energy Index Fund	QCLN	$2.1B	TSLA 16.7%, ENPH 12.2%, CHPT 5.8%, BE 4.7%, SEDG 4.6%

 

Individual Stocks – For investors able to research clean energy sub-sectors and identify leaders well-aligned with political and economic tailwinds supporting hyper growth. Provides more targeted exposure than funds if the holdings mix is concentrated into the highest conviction names.

Mutual/ETF Funds – For passive investors, ETFs like the iShares Global Clean Energy ETF (ICLN) or the Invesco Solar Portfolio ETF (TAN) offer single tickers granting low-cost exposure to baskets of clean energy stocks spread across areas like solar, wind, geothermal and hydrogen.

Dollar Cost Averaging – Given political changes affecting incentives momentarily shock clean energy stock valuations, gradually accumulating exposure through dollar cost averaging helps smooth out entry points. This prevents buying all at once at peaks.

In Closing

Clean energy stocks stand at the vanguard enabling the global renewable energy transformation unfolding through 2050. While select segments face pressures from subsidy expiries and raw materials inflation – the overwhelming decarbonization mandates overwhelmingly favor clean energy leaders surfing the $100+ trillion megatrend reshaping how the world will generate and manage electricity into the future.

Astute investors allocating a portion of portfolios to the highest quality companies enabling mainstream solar, wind, EV, battery, and hydrogen adoption are likely to benefit from both disproportionate growth rates and expanding profitability profiles as execution matches ambition.