Last Updated on Feb 5, 2024 by Harshit Singh
It’s time to GO GREEN! The world is slowly moving towards sustainable solutions for everything, even energy. Many companies are planning and contributing to making Earth a better place to live. Several Indian companies are working with green energy. Let’s look at the top five green energy stocks in India.
Green energy vs renewable energy
Green energy is an umbrella term for all renewable energy sources that emit little to no pollution. Though the terms ‘green energy’ and ‘renewable energy’ are often used interchangeably, one essential difference exists between them. While green energy sources are considered renewable, not all renewable energy sources are considered entirely green.
For example, solar power is a green and renewable energy; burning wood is renewable because you can grow more trees, but it is not green, as it pollutes the atmosphere. Green energy is a subset of renewable energy.
What are green energy stocks?
Green energy stocks are companies involved in developing alternative technologies with renewable resources that emit little to no pollution. The most prevalent sources of green energy include sunlight, wind, and heat. They can also include low-impact hydroelectric sources and specific forms of biomass. Companies that work towards creating no carbon emissions with these resources and reducing the use of fossil fuels are considered green energy companies.
Types of green energy stocks
Numerous green energy stocks are available in India for investors to choose from. Here, we’ve highlighted a few key categories of green energy stocks you can buy from the bourses.
- Clean Energy Stocks: Green energy stocks that are engaged in producing and delivering clean, renewable energy sources like solar, wind, hydro, geothermal, and bioenergy are called clean energy stocks
- Solar Energy Stocks: Green energy companies that focus on producing energy through solar energy are called solar energy stocks. Also, solar energy companies are considered companies that manufacture solar panels and offer installation services for solar power projects on residential, commercial and utility scales.
- Wind Energy Stocks: Companies involved in producing or installing wind turbines. The stocks of these green companies are called wind energy stocks.
- Hydro Energy Stocks: Companies that manage hydroelectric power stations, which are used to leverage natural water flow to generate electricity. The stocks of these green companies are called hydro energy stocks.
- Geothermal Energy Stocks: It is a form of green energy company that encompasses companies involved in developing geothermal power plants, utilising the Earth’s natural heat to produce electricity.
- Bioenergy Stocks: Renewable energy companies capable of producing and supplying biofuels like ethanol and biodiesel and operating biomass power plants using organic materials are qualified as renewable energy stocks.
List of best green energy stocks in India (2024)
Note: The list of the top six green energy stocks is sorted by their 5-year Return on Investment (High to Low). The data is as of February 5, 2024.
About top green energy stocks in India
KP Energy Ltd
KP Energy Ltd is a small-cap green energy company in India that builds windmill infrastructure to develop geothermal energy. As for the performance of this green energy stock, the company has recorded 459% growth in the past year, the highest among the other green energy stocks in India. Moreover, the company’s market share has increased from 0.3% to 1.31% in the last 5 yrs.
Upon evaluating this green energy company on the Tickertape Scorecard, the company showcased good signs of growth and profitability, contributing significantly to its high buying recommendation from the analysts.
Zodiac Energy Ltd
Incorporated in 1992, Zodiac Energy Ltd is a solar energy solution provider. It is among the top renewable energy companies in India that provide turnkey solutions from concept to commissioning of power plants. This renewable energy stock has performed exceptionally well in the past year, recording a triple-digit growth, the highest among the other renewable energy companies in India. In addition, the renewable energy company’s market share has increased significantly in the past 5 yrs from 0.24% to 1.21%.
Borosil Renewables Ltd
The first and only solar glass manufacturer in India, Borosil Renewables Ltd, was founded in 1962. This small-cap green energy stock has recorded double-digit growth in the past year and expanded its production capacity to 2.5 GW annually. Upon evaluating this green energy company on Tickertape Scorecard, the company is showing exponential growth and profitability. Additionally, the company’s market share has increased from 16.75% to 20.34% over the last 5 yrs.
Founded in 1975 to accelerate power development in India, this large-cap green energy company engaged in generating electricity and selling bulk power to state power utilities. Over the last 5 years, the market share of this green energy company has increased from 63.03% to 65.96%. Upon evaluating the company on the Tickertape Scorecard, the company is showing exceptional growth in profitability, and the green energy stock is currently underpriced and not in the overbought zone.
Adani Green Energy Ltd
Founded in 2015, Adani Green Energy Ltd is one of India’s largest renewable energy companies with a market cap of Rs. 2,64,446.30 cr. This renewable energy company builds and operates solar and wind energy power plants in India. Over the last 5 yrs, this renewable energy company has witnessed an increase in the market share from 7.69% to 25.7%, and is showing good signs of profitability on Tickertape Scorecard.
Websol Energy System Ltd
This small-cap renewable energy company in India is a manufacturer of photovoltaic monocrystalline solar cells and modules. The company has recorded triple-digit growth in the past year and performs well on the Tickertape Scorecard.
Benefits of investing in green energy stocks in 2024
Considering the government’s long-term plans, which include reaching a non-fossil energy capacity of 500 GW and meeting 50% of the energy requirements from renewable energy by 2030, it is evident that the government is taking substantial steps towards a more sustainable and environmentally friendly energy landscape. Here are some of the reasons to invest in green energy stocks in 2024 –
- Booming Sector: The government has introduced new initiatives that propel the green energy sector upward. As a result, many green energy stocks have fared relatively well, with many stocks recording double-digit growth.
- Eco-Friendly: Green energy is produced from sources such as solar, wind, and hydro, which are eco-friendly.
- Reducing Carbon Footprints: As India aims to reduce the projected carbon emissions by one billion tonnes by 2030, adopting green energy is a pivotal step towards minimising carbon emissions.
- Portfolio Diversification: Adding green energy stocks to your portfolio can minimise the risk associated with your portfolio.
- Incentivised by Government: With global governments rolling out incentives and subsidies, green energy stocks stand out as appealing investment avenues.
Factors to consider before investing in green energy stocks
- Government Policies: With government policies subject to change (either increase or decrease of investment in sectors), analyse the current government policies around green energy companies.
- Innovation: Identify companies looking to scale their production by integrating new-age tools or technology to produce green energy.
- Competition: Identify companies in the green energy sector with a competitive edge and carefully analyse them before investing.
- Risk: You can identify risks associated with a company by checking the Red Flags on the Tickertape Scorecard.
The energy sector is vital to the global economy. With the world slowly shifting towards sustainable solutions, green energy is capturing everyone’s attention. Like always, a shift in consumer demand brings up new opportunities, old companies shift to a new way, and new companies emerge; the same can be expected for the energy sector. Apart from the listed top 5 green energy stocks, which stock has been on your watchlist in the same segment?
1. What are green energy stocks?
Green energy stocks are companies involved in developing alternative technologies to replace fossil fuels with renewable resources that emit little to no pollution.
2. Can green energy be a good investment?
Green energy has been developed with the aim of saving the environment. The world is slowly moving towards sustainable solutions, and as per the International Energy Agency, global renewable energy is likely to increase by ~95% by 2026. These facts suggest that green energy is the future, which can make it a long-term investment option.
3. Who is the largest producer of green energy in the world?
According to the World Economic Forum, China is the world’s biggest solar products maker and generator. In 2022, it bought 87.41 GW of new solar power into operation. This drove their total installed capacity to 392.61 GW. The country is a world leader in wind and solar energy production and aims to generate a third of its energy from renewable sources by 2025. China is also one of the biggest investors in renewable energy globally.
4. Which are the top 10 renewable energy companies in India?
5. Which are the top-performing renewable energy stocks in India?
Agni Green Power Ltd is one of the top-performing renewable energy stocks in India, with a gain of 153.02% in January 2024. Second on the list is SJVN Ltd, a mid-cap company that recorded double-digit growth in January 2024.