- The Inflation Reduction Act allocates $369 billion to combat climate change through financing and developing green energy.
- As the world works toward cleaner energy and decarbonization, green energy stocks have ample room to grow.
- We’re looking at stocks like Tesla, First Solar, Brookfield Renewable and others for those who want to invest in renewables in 2022.
As the world tries to figure out how to combat climate change and reduce carbon emissions, many governments and companies are investing significant resources in developing renewable energy sources. With the global economy focused on shifting towards new energy sources, a huge amount of money is being invested in the infrastructure needed to make the move.
The Biden administration recently announced the Inflation Reduction Act, which aims to increase the rate at which companies move toward green energy sources. This is the largest investment in clean energy ever, with the government committing $369 billion in direct investments and tax credits. This move provides incentives for clean energy production in the United States, 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 is investing in green energy?
Investing in green energy is about putting your money into companies that use energy generated from natural sources. Governments around the world are trying to pass legislation to increase the resources invested in renewable energy sources to rely less on fossil fuels.
Low-impact or naturally replenished renewable energy sources such as wind, solar and water are better for the environment, as they do not emit greenhouse gases. With the increasing demand for renewable energy sources, many companies want to become environmentally friendly.
According to data from Allied Market Research. The global renewable energy market was valued at $881.7 billion in 2020 and is expected to reach nearly $2 trillion by 2030. The research also states that all renewable energy sources combined currently provide 7% of global energy demand.
Investing in green energy stocks allows you to invest money in companies that focus on renewable energy sources, which many feel is the future of energy. At least the future growth of the energy sector.
What are the best green energy stocks for 2022?
With the government more incentivizing companies to expand renewables through clean energy credits, this may be the perfect time to start investing money in this area. Here are the top seven green energy stocks worth looking into to invest right now.
1. Brookfield Renewable Partners LP (BEP)
Brookfield Renewable generates electricity using hydroelectric, wind, solar and biomass sources. The company has a globally diversified portfolio of renewable energy assets.
Brookfield is taking a world leadership role when it comes to decarbonization. They are also investing in emerging future technologies such as green hydrogen. Increased fossil fuel prices and a greater focus on renewables 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 fore in the green energy movement. Tesla also has an impressive track record, and the company has made significant profits from its regulatory credits. Tesla recently announced a $5 billion nickel deal with Indonesia as the company continues its search for this key material needed to produce electric car batteries.
We've written extensively about Tesla stocks. As Tesla AI Day approaches, there's no telling what innovations the company is working on as it brings electric vehicles to the fore, among other commodities and tech.
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 manufacturers of solar panels worldwide, so the company is ready to grow as the demand for solar panels increases. The company manufactures thin-film solar panels. There is a huge opportunity in the field of solar energy now because governments are planning to spend a large amount of money on developments in this field. First Solar is investing heavily to increase solar panel manufacturing capabilities.
First Solar closed at $129.85 on Sept 23 with a one-year target of $133.26.
4. Steam Inc. (STEM)
Stem is a global leader when it comes to intelligent AI-enabled energy storage. The company recognizes that smart energy storage for charging solar, onshore, electric vehicles and other renewable sources can increase revenue and reduce customer costs. For government and other companies to reduce carbon emissions, they must use efficient energy storage systems. This is why we had to include Stem in our list of the best green energy stocks of 2022.
Stem closed at $13.94 on Sept 23 with a one-year target of $19.67.
5. Plug Power Inc. (PLUG)
Plug Power provides alternative energy technology by focusing on providing a comprehensive green hydrogen ecosystem, from production to storage. They use an electrolyzer to produce green, carbon-free hydrogen. The company then transports this green hydrogen from its plants to partners around the world with refrigerated trailers and mobile storage units. The company has created the first viable market for hydrogen fuel cell technology to help its customers remove carbon. They believe in a revolution to achieve zero net goals rather than just working on incremental change.
It's worth noting that Plug Power has just announced that it has commissioned the first-ever electrolyzer to produce marine green hydrogen.
Plug Power closed at $22.63 on Sept 23 with a one-year target of $37.43
6. Clearway Energy
Clearway Energy is one of the largest operators and developers of clean energy in the United States. The company is currently focusing on solar and wind power generation projects. The stock pays a dividend of 3.7%, so it's also attractive to dividend investors. With diversified renewables and soaring earnings per share, many analysts recommended taking a look at this stock.
Clearway Energy closed at $32.75 on September 23rd.
7. NextEra Energy (NEE)
They are currently one of the largest producers of wind and solar energy worldwide. The company has also been a pioneer in resource investment in renewable energy and storage.
They also announced a plan to completely eliminate carbon emissions from operations by 2045. They plan to do so 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 in power plants with natural gas. Renewable and green hydrogen. If you are looking to invest in energy stocks, then you should consider the company that is leading the decarbonization process in the country.
NextEra closed at $82.57 on September 23 with a one-year target of $96.99
How should you invest?
The recent cash injection into green energy is a sign that the government is confident this is the future. It is becoming clear that the world is going green and that countries will continue to invest in renewable energy sources. This means that many investors will be looking for companies in the field of renewable energy.
While renewable energy is often seen as the future, there is still some reluctance to invest in green energy stocks. If you want to invest in eco-friendly companies but don't know where to start, look into Q.ai's Clean Tech Kit. By investing in this way, you are leveraging the power of artificial intelligence to jump on the clean energy revolution. Trying to decide which individual company to invest in can be difficult as you have to do a lot of research to find out 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 large sums of money in renewable energy sources. With governments around the world working on legislation to speed up decarbonization, there will be plenty of green energy stocks in high demand.
The one thing we cannot ignore when it comes to investing in green energy stocks is the broader general economic situation with the Federal Reserve continuing to raise interest rates to combat inflation. Many stocks fell in 2022 due to rising inflation and the inevitable consequences associated with this volatility. You should keep this in mind no matter where you choose to invest.
Download Q.ai today To access investment strategies backed by artificial intelligence. When you deposit $100, we will add an additional $100 to your account.