Right now, there may not be a better industry to invest in than green energy stocks. The industry offers a great mix of growth potential and low risk. Industries like tech stocks may offer slightly more growth potential in the long run. However, investing in tech stocks is far riskier.
With renewable energy, there is far more certainty in your investments. First off, these stocks have resilient operations today. The generators that produce electricity are very defensive. Plus, these companies have long-term power-purchase agreements in place, so their sales are highly robust.
So, you can buy green energy stocks knowing they’re a relatively safe investment that offer major long-term growth potential. But why exactly is renewable energy one of the best industries to invest in today?
The renewable energy industry has been gaining in popularity recently, and for good reason. Climate change continues to worsen around the world. It’s only becoming more clear that drastic measures need to be taken in order to slow and eventually reverse the effects of climate change.
Electric vehicles have become highly popular over the last few years for this reason. Automobiles and the whole transportation sector account for roughly 15% of all greenhouse gasses that are emitted.
However, electricity generation accounts for even more of the greenhouse gas emissions than the transportation sector. In fact, some estimates have electricity and heat combining to make up almost double the emissions that transportation causes.
So, it’s clear how badly we need to grow our clean energy infrastructure. That need for clean energy is creating a major opportunity for investors.
There are a variety of ways you can invest in green energy stocks for the long term. One of the most common ways is to buy a renewable energy generator.
The best green energy stocks to consider
There are numerous high-quality renewable energy generators to consider in Canada. One of the biggest and best is Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP).
Brookfield is a great choice, not just because it’s so large and dominant. However, it’s also a top choice because Brookfield is well known to have some of the best management.
The company is constantly looking all over the world for its next deal where it can recycle capital into an attractive investment. You can count on Brookfield to not only grow well in the renewable energy industry but recycle capital and source the highest-potential deals for shareholders.
Currently, Brookfield has massive generating capacity with hydro, wind, and solar as the main assets in its portfolio and continues to look for more growth as the industry continues to grow rapidly.
For years management has executed to perfection, growing its operations and shareholder value in the process. Going forward, though, Northland’s plans for expansion look even more impressive.
The company is planning on investing up to $20 billion over the next five years. This will go to growing its operations through new organic projects, assessing potential utility investments, and looking for ancillary clean energy businesses such as those in the cleantech space.
This is a prudent outlook from Northland and exactly what you would expect from one of the top growth stocks in the green energy sector.
A top cleantech stock to buy today
An example of a high-quality cleantech stock Northland could target is Xebec Adsorption (TSX:XBC). Whether or not it ever gets taken it out, though, the stock is still an incredible long-term growth investment.
The green energy stock builds industrial equipment that can capture, filter, and purify naturally occurring gasses. It can then transform these gasses into renewable natural gas or hydrogen, creating completely clean energy.
This type of technology is still early, but as we’ve seen recently, the green revolution is ramping up considerably. This makes now the perfect time to buy a stock like Xebec, especially considering the major discount you can get these days.
So, if you’re looking for high-quality and safe long-term growth stocks, these are the top green energy companies to buy today.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Daniel Da Costa owns shares of NORTHLAND POWER INC. and Xebec Adsorption Inc.