5 Best Renewable Energy Stocks for 2026 – The Motley Fool

Investment Report on Renewable Energy Stocks with Emphasis on Sustainable Development Goals (SDGs)

Introduction: The Global Energy Transition and SDGs

The global economy is undergoing a rapid transition towards new energy sources driven by concerns about climate change and the urgent need to achieve the United Nations Sustainable Development Goals (SDGs), particularly SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action). This transition involves shifting away from carbon-based fossil fuels to cleaner, renewable energy sources. Achieving this decarbonization requires trillions of dollars in annual investments, which aligns with SDG 9 (Industry, Innovation, and Infrastructure) and SDG 12 (Responsible Consumption and Production).

Renewable energy is central to this shift, offering significant opportunities for investors to support sustainable development while potentially earning attractive returns.

Why Invest in Clean Energy Stocks?

Several factors are driving growth in the renewable energy sector, supporting SDG 8 (Decent Work and Economic Growth) and SDG 13 (Climate Action). The benefits of investing in clean energy stocks include:

• Growth Potential: Rapid expansion of renewable sources such as wind and solar energy, contributing to sustainable industrialization (SDG 9).
• Climate Change Mitigation: Increasing awareness and action on climate change (SDG 13) are accelerating decarbonization efforts, with many companies adopting renewable power to reduce their carbon footprint.
• Social Responsibility: Corporate investments in renewables enhance environmental stewardship and social responsibility, supporting SDG 12 and SDG 17 (Partnerships for the Goals).
• Government Support: Legislative frameworks and incentives promote investment in renewable energy infrastructure, advancing SDG 7 and SDG 13.
• Dividend Income: Renewable energy producers often generate stable cash flows through long-term power purchase agreements (PPAs), enabling attractive dividends for investors.

Top Renewable Energy Stocks in 2026

The following companies exemplify leadership in renewable energy investment, contributing directly to multiple SDGs including SDG 7, SDG 8, and SDG 13.

1. NextEra Energy

   NextEra Energy (Ticker: NEE) is among the world’s largest producers of wind and solar energy, operating utilities and energy resource segments that sell electricity under PPAs. Its ambitious Real Zero plan targets carbon neutrality by 2045, expanding solar and storage capacity and replacing natural gas with green hydrogen and renewable natural gas, supporting SDG 7 and SDG 13.

   • Market Cap: $174B
   • Dividend Yield: 2.71%
   • Consistent EPS growth (~9% CAGR since 2004) and dividend growth (10% annually)

2. Brookfield Renewable Partners

   Brookfield Renewable (Ticker: BEP) is a global leader in hydroelectric power, wind, solar, and energy storage, with most power sold under long-term PPAs ensuring steady cash flow. Its growth strategy aligns with SDG 7 and SDG 13 by expanding renewable capacity and dividend payments.

   • Market Cap: $8.6B
   • Dividend Yield: 5.29%
   • Dividend growth at 6% CAGR since 2001 and FFO growth at 8% CAGR since 2015
   • Targets >10% annual FFO growth through 2030

3. Clearway Energy

   Clearway Energy (Ticker: CWEN) owns a large portfolio of renewable generation facilities in the U.S., combining wind, solar, and efficient natural gas plants. Its growth prospects through 2030 support SDG 7 and SDG 13 by increasing clean energy availability.

   • Market Cap: $4.3B
   • Dividend Yield: 4.90%
   • Expected 7-8% compound annual growth in cash available for distribution (CAFD) per share through 2030

4. First Solar

   First Solar (Ticker: FSLR) manufactures thin-film solar panels optimized for utility-scale projects, supporting SDG 9 and SDG 7 by advancing clean energy technology and infrastructure. The company maintains strong financial health to meet growing solar panel demand.

   • Market Cap: $26B
   • Gross Margin: 40.32%
   • Contracts secured for 54.5 gigawatts of panels, ensuring revenue visibility
   • Strong balance sheet with $1.6B to $2.1B net cash expected at end of 2025

5. Constellation Energy

   Constellation Energy (Ticker: CEG) is the largest U.S. producer of carbon-free energy, primarily through nuclear power, complemented by hydro, wind, and solar assets. Its recent acquisition of Calpine enhances its clean energy portfolio, supporting SDG 7 and SDG 13.

   • Market Cap: $96B
   • 90% of generation from carbon-free sources
   • Growth projects include nuclear restarts, solar plus battery storage, carbon capture and storage, and natural gas capacity

Benefits and Risks of Investing in Renewable Energy Stocks

Benefits

• Growth Potential: Increasing global demand for renewable energy aligns with SDG 7 and SDG 8, offering strong investment returns.
• Passive Income: Stable cash flows from PPAs enable dividend payments, supporting economic growth (SDG 8).
• Environmental Support: Capital investment in renewables advances climate action (SDG 13) and responsible consumption (SDG 12).

Risks

• Near-term Growth Headwinds: Factors such as tariffs, policy changes, and interest rates may temporarily impact growth.
• Competition: Increasing competition could pressure profit margins and growth rates.

Factors to Consider When Investing in Renewable Energy Stocks

• Business Model: Differentiation between manufacturers of renewable technology and power producers affects risk and revenue profiles.
• Financial Strength: Strong financial health is critical to support capital-intensive renewable projects, aligning with SDG 9.
• Growth Prospects: Review of order backlogs and development pipelines is essential to assess future performance.

High-Powered Total Return Potential for Investors

The clean energy revolution, driven by climate change mitigation and socially responsible investing, is expected to mobilize trillions of dollars in renewable energy investments over coming decades. This trend supports multiple SDGs, including SDG 7, SDG 8, and SDG 13.

Top renewable energy companies with proven value creation and financial strength are positioned to deliver superior total returns while advancing sustainable development goals.

Expert Q&A on Renewable Energy Investing

Professor Priya Parrish, Adjunct Assistant Professor of Strategy at the University of Chicago Booth School of Business, provides expert insights on investing in renewable energy, emphasizing the importance of aligning investment strategies with sustainability objectives and long-term value creation.

Conclusion

Investing in renewable energy stocks offers a compelling opportunity to contribute to the achievement of the Sustainable Development Goals, particularly SDG 7 (Affordable and Clean Energy), SDG 8 (Decent Work and Economic Growth), SDG 9 (Industry, Innovation, and Infrastructure), SDG 12 (Responsible Consumption and Production), and SDG 13 (Climate Action). Careful evaluation of companies’ business models, financial health, and growth prospects is essential for investors seeking to support sustainable development while pursuing attractive financial returns.

1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 7: Affordable and Clean Energy
   • The article focuses on the transition to renewable energy sources such as wind, solar, hydroelectric, and nuclear energy.
   • Companies like NextEra Energy, Brookfield Renewable, Clearway Energy, First Solar, and Constellation Energy are highlighted for their roles in producing clean energy.
2. SDG 13: Climate Action
   • The article discusses decarbonization efforts to combat climate change by shifting away from fossil fuels.
   • NextEra Energy’s Real Zero plan to eliminate carbon emissions by 2045 is an example of climate action.
3. SDG 9: Industry, Innovation and Infrastructure
   • The development and manufacturing of renewable energy technologies such as thin-film solar panels by First Solar.
   • Investment in energy infrastructure and storage technologies.
4. SDG 12: Responsible Consumption and Production
   • Promotion of sustainable energy production and long-term power purchase agreements (PPAs) that ensure predictable and responsible energy supply.
5. SDG 8: Decent Work and Economic Growth
   • Growth potential in renewable energy stocks supports economic growth and job creation in the clean energy sector.

2. Specific Targets Under Those SDGs Identified

1. SDG 7: Affordable and Clean Energy
   • Target 7.2: Increase substantially the share of renewable energy in the global energy mix.
   • Target 7.3: Double the global rate of improvement in energy efficiency.
2. SDG 13: Climate Action
   • Target 13.2: Integrate climate change measures into national policies, strategies, and planning.
   • Target 13.3: Improve education, awareness-raising, and human and institutional capacity on climate change mitigation.
3. SDG 9: Industry, Innovation and Infrastructure
   • Target 9.4: Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies.
4. SDG 12: Responsible Consumption and Production
   • Target 12.2: Achieve the sustainable management and efficient use of natural resources.
5. SDG 8: Decent Work and Economic Growth
   • Target 8.4: Improve progressively, through 2030, global resource efficiency in consumption and production.

3. Indicators Mentioned or Implied to Measure Progress

1. Renewable Energy Capacity and Production
   • Gigawatts of renewable energy capacity installed or contracted (e.g., First Solar’s 54.5 gigawatts of solar panel contracts).
   • Share of electricity generated from renewable sources (e.g., Constellation Energy’s 90% carbon-free generation).
2. Carbon Emissions Reduction
   • Carbon emissions eliminated or reduced (e.g., NextEra Energy’s Real Zero plan to eliminate carbon emissions by 2045).
3. Financial and Economic Indicators
   • Investment levels in renewable energy (implied by discussion of trillions of dollars needed annually).
   • Dividend yields and growth rates as indicators of financial health and sustainability of renewable energy companies.
   • Growth rates of earnings per share (EPS), funds from operations (FFO), and cash available for distribution (CAFD) per share as measures of company performance and sector growth.
4. Energy Efficiency and Technology Development
   • Advancement in renewable energy technologies such as thin-film solar panels.
   • Expansion of energy storage capacity and new technology adoption (e.g., hydrogen and renewable natural gas).

4. Table of SDGs, Targets, and Indicators

Source: fool.com