- The Inflation Reduction Act allocates $369 billion toward fighting climate change by funding and developing green energy.
- As the world works towards cleaner energy and decarbonization, green energy stocks have ample room for growth.
- We look at stocks like Tesla, First Solar, Brookfield Renewable, and others for those who want to invest in renewable energy sources in 2022.
As the world tries to figure out how to fight climate change and reduce carbon emissions, many governments and companies are investing substantial resources in developing renewable energy sources. With the global economy focusing on transitioning towards new energy sources, a hefty amount of money is being invested in the infrastructure required to make such a move.
The Biden administration recently announced The Inflation Reduction Act, which intends to increase the rate at which businesses transition toward green energy sources. This is the largest investment in clean energy ever, with the government allocating $369 billion toward direct investments and tax credits. This move provides incentives for clean energy to be produced in the US, and many companies will seek to take advantage of these new opportunities.
Here are the best green energy stocks to invest in right now.
What’s investing in green energy all about?
Investing in green energy is about putting your money into companies using energy generated from natural sources. Governments worldwide are trying to pass legislation to increase the resources invested in renewable energy sources to rely less on fossil fuels.
Renewable energy sources that are low impact or naturally replenished like wind, solar, and water are better for the environment, they don’t emit greenhouse gasses. As the demand for renewable energy sources increase, many companies want to go green.
According to data from Allied Market Research. the global renewable energy market was worth $881.7 billion in 2020, and it’s expected to reach almost $2 trillion by 2030. The research also mentions that all renewable energy sources combined currently provide 7% of global energy demand.
Investing in green energy stocks allows you to put money towards companies focused on renewable energy sources, which many feel is the future of energy, period. At least the future of energy sector growth.
What are the best green energy stocks for 2022?
With the government further incentivizing companies to scale renewable energy sources with clean energy credits, this could be the ideal time to start investing money in this space. Here are the top seven green energy stocks that worth researching for investment right now.
1. Brookfield Renewable Partners L.P. (BEP)
Brookfield Renewable generates electricity with hydroelectric, wind, solar, and biomass sources. The company has a globally diversified portfolio of renewable power assets.
Brookfield is taking on a leadership role globally when it comes to decarbonization. They’re also investing in emerging future technologies like green hydrogen. Increasing prices of fossil fuels and a greater focus on renewable energy sources have helped Brookfield grow in the past year.
The stock closed at $34.51 on September 22 and has a one-year target of $41.88.
2. Tesla Inc. (TSLA)
The electric vehicle manufacturer is at the forefront of the green energy movement. Tesla also has a proven track record, and the company has been generating substantial profit from its regulatory credits. Tesla recently announced a deal for $5 billion worth of nickel with Indonesia as the company continues its search for this key material needed for producing electric vehicle batteries.
We’ve written about Tesla stock extensively. With Tesla AI Day coming up, there’s no telling what innovations the company is working on as they bring electric vehicles to prominence, among other cleantech staples and tech tech staples.
Tesla closed at $275.33 on September 23 with a one-year target of $305.77.
3. First Solar Inc. (FSLR)
First Solar is one of the leading solar panel makers worldwide, so the company is ready to grow as demand for solar panels increases. The company manufactures thin-film solar panels. There’s a huge opportunity in solar energy right now because governments plan on spending a significant amount of money on developments in this space. First Solar has been investing heavily to increase its solar panel manufacturing capabilities.
First Solar closed at $129.85 on September 23 with a one-year target of $133.26.
4. Stem Inc. (STEM)
Stem is a global leader when it comes to AI-enabled smart energy storage. The company realizes that smart energy storage to solar, wild, electric vehicle charging, and other renewable sources can increase revenue and reduce customer costs. For the government and other companies to reduce carbon emissions, they must use efficient energy storage systems. This is why we had to include Stem on our list of the best green energy stocks for 2022.
Stem closed at $13.94 on September 23 with a one-year target of $19.67.
5. Plug Power Inc. (PLUG)
Plug Power provides an alternate energy technology by focusing on providing an end-to-end green hydrogen ecosystem, from production to storage. They use electrolyzers in order to produce carbon-free green hydrogen. The company then transports this green hydrogen from its plants to partners worldwide with cryogenic trailers and mobile storage units. The company created the first viable market for hydrogen fuel cell technology to help its customers with decarbonizing. They believe in a revolution for meeting net zero goals instead of simply working on incremental change.
It’s worth noting that Plug Power just announced that they had commissioned the first ever electrolyzer for floating offshore green hydrogen production.
Plug Power closed at $22.63 on September 23 with a one-year target of $37.43
6. Clearway Energy
Clearway Energy is one of the biggest operators and developers of clean energy in the US. The company is presently focused on solar and wind generation projects. The stock pays a 3.7% dividend, so it’s also attractive for dividend investors. With the diversified renewable energy sources and earnings per share soaring, many analysts have been recommending a look at this stock.
Clearway Energy closed at $32.75 on September 23.
7. NextEra Energy (NEE)
They’re currently one of the largest wind and solar energy producers worldwide. The company has also been an industry leader in investing resources in renewable energy and its storage.
They also announced a plan to eliminate carbon emissions totally from operations by 2045. They plan on doing this by adding more than 50,000 megawatts of capacity when it comes to battery storage, adding hundreds of millions of solar panels, and replacing natural gas at power plants with renewable natural gas and green hydrogen. If you’re looking to invest in energy stocks, you have to consider the company leading the country’s decarbonization.
NextEra closed at $82.57 on September 23 with a one-year target of $96.99
How should you be investing?
The recent cash injection into greener energy is a sign that the government is confident that this is the future. It’s becoming clear that the world’s going green and that countries will continue investing in renewable energy sources. This means that many investors will be looking for companies in the renewable energy space.
While renewable energy is often looked at as the future, there’s still some hesitancy with investing in green energy stocks. If you want to invest in green companies but don’t know where to start, look into Q.ai’s Clean Tech Kit. By investing this way, you’re leveraging the power of AI to jump on the clean energy revolution. Trying to decide which individual company to invest in could be tricky as you have to conduct lots of research to see what these companies are working on.
With climate change becoming a greater concern globally, socially responsible investing is on the rise. Many countries and companies will have no choice but to invest significant amounts of money in renewable energy sources. With governments worldwide working on legislation to speed up the decarbonization process, there will be plenty of green energy stocks in high demand.
The one thing we can’t ignore when it comes to investing in green energy stocks is the overall broader economic situation with the Fed continuing to raise interest rates to combat inflation. Many stocks tumbled in 2022 due to high inflation and the inevitable consequences associated with that volatility. You must keep this in mind regardless of where you choose to invest.
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