Key Takeaways
- Future energy will likely be green energy. While the world is moving away from fossil fuels, it might be a good time to buy green stocks.
- There are numerous green stocks on the stock exchange, this list has selected a wide variety, each offering a unique service to the industry as a whole.
- Many green stocks will likely be long-term investments due to the slow pivot toward green energy-only solutions.
Introduction
It might be hard to visualize the prospect of investing in green stocks whilst the US's mantra of the year is "drill, baby drill," but the world has significantly pivoted, for the most part, away from fossil fuels and has invested heavily in the green energy sector.
Knowing this type of energy will likely become the key source of energy in the future, investing in green stocks might pay off one day, in a big way. Below are my top stock picks that every investor should know in 2025.
What are green stocks?
So, what are green stocks? In essence, they are shares of companies that focus on renewable energy or eco-friendly technology, such as solar, wind, hydro, etc... When investing in green stock, you're buying into the business of clean energy development.
For numerous green stock investors, it isn't just about the potential returns but instead the sense that they are contributing to a larger movement, the pivot from fossil fuels, and supporting the adoption of the industry as a whole.
List of the best green stocks
- NextEra Energy (NYSE: NEE) - Best for Steady Gains
- Enphase Energy (NASDAQ: ENPH) - Best for Tech-Driven Growth
- Shoals Technologies (NASDAQ: SHLS) - Best for Solar Infrastructure
- Plug Power (NASDAQ: PLUG) - Best for Speculative Players
- First Solar (NASDAQ: FSLR) - Best for Solar Manufacturing
How did these stocks make our list?
Why these stocks specifically? This list was formulated based on each stock's potential future within the industry, combined with its contributing capacity, among other key factors listed below.
- Growth potential: Are these stocks positioned to capitalize off the industry?
- Financial health: Do they have a strong cash flow and maybe pay dividends?
- Unique edge: What makes them stand out compared to their competition?
- U.S. market access: Can their stocks be traded easily, even if they’re global players?
Best for steady gains
NextEra Energy (NYSE: NEE)
Florida-based green stock, NextEra is one of the world's top dogs when it comes to wind and solar. What makes it so special is not just its utility but also the sheer amount of energy this company produces, leveling out at 2,700 MW, which is enough to power over 112,000 homes a day.
Why NextEra?
Financially, NextEra has seen strong revenue growth; in 2024, the company saw a 5% increase to $28.1 billion compared to the previous year, largely due to a $7.1 billion Q2 from renewable projects.
Earnings per share (EPS) landed around $3.17, beating forecasts, and its dividend has been growing 10% yearly for over a decade, averaging a yield of 2.8% at $84 a share. Big bets on wind, solar, and U.S. Tax credits are key reasons driving this growth.
However, regulatory curveballs could hit its utility side, and rising interest rates might hinder new projects. For you, it’s a green stock that’s steady yet forward-looking and hard to pass up.
Best for tech-driven growth
Enphase Energy (NASDAQ: ENPH)
California-based green energy company focusing on microinverters, small devices that convert solar energy into home-ready power. The company's competitive edge comes from its more efficient inverters, as its tech lets each panel shine on its own, boosting output even when sunlight is scarce.
Why Enphase?
In 2024, the company generated $2.3 billion in revenue, a 15% decrease from 2023 due to a slowdown in solar panel demand; however, that company still announced a $440 million net income with a 19% margin.
At $110 a share, its P/E of 25 hints toward a potentially steady entry point and potential future growth. However, competition is clearly heating up, and if solar incentives drop, it could stumble. On the other hand, Enphase’s tech edge and global reach make it a green stock worth betting on if you’re after potentially high flyers.
Best for solar infrastructure
Shoals Technologies (NASDAQ: SHLS)
Not classed as a household name, at least not yet, Shoals Technologies is a Tennessee-based company specializing in electrical balance systems for solar projects. This involves the wiring and connections that tie solar panels together.
Why Shoals?
Shoal's competitive edge is the development of plug-and-play systems that cut the cost and time of the installation of solar projects, making solar projects faster and cheaper. It’s a green stock that’s quietly powering the solar boom behind the scenes.
In 2024, Shoal's revenue increased by 15%, to $450 million, compared to 2023, with a net income of roughly $60 million. In Q2 alone, Shoal's revenue increased by $120 million due to deals made with large utility companies and expansion into overseas markets.
At $8 a share, its P/E of 20 feels reasonable for potential future growth driven mostly by the industry's solar expansion and Shoal's knack for simplifying the installation process. However, if solar demand dips or competitors catch up, Shoals could take a hit, something you should consider before jumping into this stock.
Best for speculative players
Plug Power (NASDAQ: PLUG)
More of a wild card when it comes to the green stock industry, Plug Power is a New York-based company focused on the development of hydrogen fuel cells. They mostly use this technology to power forklifts, tricks, and other clean hydrogen tech.
Plug Power is considered a pioneer in the green hydrogen wave, partnering with giants such as Amazon and Walmart.
Why Plug Power?
Financially, Plug Power has a lot of volatility; in 2024, the company's revenue reached $900 million, up 10% the following year, but was still operating with a $400 million net loss. This loss is largely due to operational hiccups, market shifts, and their big bets on hydrogen not quite paying off yet.
At $1.5 a share, it’s cheap but volatile, and currently, its profitability is shaky. Hydrogen’s infrastructure lag could stall it entirely, so there's a lot of risk with this stock, but the payoff could be big.
Best for solar manufacturing
First Solar (NASDAQ: FSLR)
Based out of Arizona, First Solar is a leading solar panels maker, specializing in thin-film solar designed for large utility projects. Their competitive edge is in the company's affordability and offers more efficient solutions compared to silicon-based solutions.
U.S. and India, hitting 21 GW capacity in 2024. It’s a green stock that’s all about scaling solar power for the masses.
Why First Solar?
Certainly, a shining stock, as revenue soared to $3.8 billion in 2024, an increase of 25% compared to the previous year, and a net income of $1.1 billion, a 40% increase driven largely by a $1.4 billion backlog of orders and numerous U.S. Tax credits.
However, issues with the company's future are largely dependent on the supply chain, especially when shortages such as cadmium telluride (key ingredients needed to develop their solutions) coupled with growing competition from Chinese companies, meaning First Solar could see a challenging future during times of uncertainty.
Conclusion
There it is, our list of top green stocks every investor should know about. Each stock discussed is designed to offer its own contribution to the green energy sector's value chain, offering a fresh perspective on your portfolio and potential future gains.
I picked these based on their growth potential, financial muscle, unique edge, and easy U.S. market access, so you’ve got a mix that could fit whatever you’re feeling. The green energy shift’s not slowing down, and these could be your ticket to ride it.
Frequently Asked Questions
Are green stocks too risky in 2025?
Potentially, yes; due to the Trump administration's position to prioritize traditional methods of energy generation, green stocks may take second priority for several more years.
Why go green over traditional energy stocks?
Renewable energy is likely the future of energy generation, and companies that have invested in and developed large green energy solutions will likely capitalize on its boom in the future.
Can I start small with these?
Totally! Usually, brokers offer fractional trading services that allow you to purchase dollar amounts into shares, meaning you can invest any amount and own a piece of a share. In addition, brokers may also offer auto-investing features, enabling you to dollar-cost average green stock automatically.
