Roughly twenty per cent of the electricity produced mainly by the power sector comes from renewable energy sources like wind, solar, and hydroelectric power. Since 2000, the sector's capacity to produce power has increased by a factor of four. With rising concerns about climate change, though, the pace has picked up in recent years. A quicker pace of this will aid quick decarburization of the economy. Because of climate change, businesses and other organizations must consider what they can do to reduce their carbon footprint. More and more companies are entering into PPAs with utilities and other electrical generators to purchase renewable energy. Meanwhile, some are funding renewable energy initiatives through direct investments.

The Top Five Stocks in Renewable Energy

NextEra Energy

Among the world's leading manufacturers of wind and solar, NextEra Energy ranks high. Its Florida enterprises and energy resources division is responsible for electricity generation; this division then sells this power to other organizations and end consumers via power purchase agreements. NextEra Energy is one of the few significant corporations investing significantly in renewable energy. In 2022, the utility introduced its Real Zero goal to achieve carbon neutrality by 2045. It plans to replace natural gas in reactors with renewable hydrogen and highly renewable gas and considerably increase its solar storage and energy capacity.

Brookfield Renewable

Regarding renewable energy, Brookfield Renewable is at the top of the industry worldwide. In 2022, hydroelectric electricity will account for half of the company's total output, making it a global leader in this sector. Brookfield has also expanded its knowledge in onshore and offshore wind, utility-scale and distribution generation solar (including solar and wind), and energy storage. Long-term power purchase agreements (PPAs) provide the company with a constant revenue stream from selling its electricity.

Clearway Energy

When it comes to renewable energy generation facilities, Clearway Energy is a significant player in the United States. It has built cutting-edge natural gas-powered facilities to supplement its renewable energy sources like wind and solar. Clearway sells electricity under power purchase agreements (PPAs) as an additional revenue stream. By selling its thermal division in 2022, the company raised $1.35 billion in cash that was used in the growth of its renewable energy sector. As time has progressed, it has put its funds to good use by purchasing renewable energy assets. The corporation has more precise paths toward boosting its dividend due to these purchases.

First Solar

First Solar's thin-film solar panels are excellent for power distribution solar energy projects due to their bigger size and higher energy production per square foot compared to rival technologies. The company is poised to profit significantly from the rising demand for solar panels, as it is one of the world's foremost solar panel manufacturers. It is making severe financial commitments to expand its solar panel manufacturing capacity to satisfy consumer demand. Except for a new facility being built in India, all of its power until 2024 was sold out by the second quarter of 2022. On the other hand, it has panel sales contracts extending through 2026, guaranteeing a steady income stream well into the foreseeable future.

SolarEdge Technologies

SolarEdge Technologies creates cutting-edge inverter technology. The part improves solar panels' efficiency, reducing the system's overall energy costs. SolarEdge Technologies, like First Solar, stands to gain from the rapidly expanding market for solar power. The business has grown from its initial focus on inverters to developing new intelligent energy products. Through a series of strategic acquisitions, the company has broadened its product catalogue to serve a broader range of customers in the solar, storage, electric car charging, battery, uninterruptible power supply (UPS), electric vehicle powertrain, and grid services solution markets.

Conclusion

By keeping an eye on the most popular stocks, you may see the market's current values. When investing in stocks or funds focused on specific industries, it's essential to look ahead at the company's prospects rather than back at its past performance. You'll waste time and resources trying to catch up with yesterday's winners while missing out on today's potential stars. Even if a product is trending, you are not obligated to buy it. Warren Buffett famously quipped, "The stock market is an uncalled-strike game. You can sit back and wait for the perfect pitch to hit.