3 Canadian Green Energy Stocks to Buy and Hold in Your TFSA for a Sustainable Future

Renewable energy stocks are some of the best options for long-term growth, and these are top options.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published April 29, 2025 8:45 pm EDT

Building a greener future is not just about recycling and driving an electric car. It can also happen in your investment portfolio. One of the easiest ways to back the global transition to clean energy is to invest in renewable energy companies inside your TFSA. With a Tax-Free Savings Account (TFSA), any gains or dividends are tax-free, making it a perfect tool for long-term wealth building. Right now, three green energy stocks on the TSX look especially appealing for a sustainable future. So let’s take a closer look.

A steel grain silo storage tank with solar panel in a yellow canola field in bloom in Alberta, Canada. — Source: Getty Images

Capital Power

Capital Power (TSX:CPX) is not a flashy name, but it is one of the strongest green energy investments you can make today. Based in Edmonton, it owns and operates power plants across North America, focusing heavily on low-carbon and renewable energy sources. In its most recent 2024 results, Capital Power reported adjusted funds from operations (AFFO) of $817 million and net income of $701 million.

Furthermore, the energy stock pays a quarterly dividend of $0.6519 per share, or about $2.61 annually. With the stock price around $47.52, that gives a very attractive dividend yield of about 5.6% at writing. Even better, Capital Power has a track record of raising its dividend, guiding for about 6% growth through 2025. Beyond the numbers, the company is investing heavily in carbon capture and hydrogen projects, showing it is not just talking about a green future, it’s building it.

Boralex

Boralex (TSX:BLX) carved out its own space in renewable energy. The energy stock focuses on wind, solar, and hydroelectric power facilities. Its operations span Canada, France, the United States, and the United Kingdom, giving it a nice geographic diversification. Boralex’s 2024 full-year results showed net earnings of $74 million. It faced some challenges with poor wind and hydro conditions in the fourth quarter. Yet Boralex continued moving forward with big construction projects, including large-scale wind and solar farms in Ontario and Québec.

The energy stock’s long-term growth plan is firmly intact, aiming to nearly double its installed capacity by 2025. Boralex offers a smaller dividend compared to Capital Power but makes up for it with growth potential. For TFSA investors who are comfortable with a little more volatility in exchange for more upside, Boralex fits nicely into a green portfolio.

Innergex

Innergex Renewable Energy (TSX:INE) rounds out the trio. The company is a pure-play renewable energy producer, developing and operating hydroelectric plants, wind farms, solar parks, and battery storage systems. The energy stock operates across Canada, the U.S., France, and Chile. In its most recent earnings update, Innergex posted third-quarter earnings per share of $0.05, beating analyst expectations.

Looking ahead, it expects 2025 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to range between $825 million and $875 million, which would represent about 13% growth from its 2024 guidance. Innergex also expects free cash flow per share to rise by 10%, hitting between $0.75 and $0.95. INE stock pays a healthy dividend, with a current yield around 6%. Like Boralex, Innergex is investing heavily in future growth projects, including new wind and solar assets, which should support both earnings and dividend stability in the years ahead.

Bottom line

Putting these three energy stocks together into a TFSA gives you a blend of growth, income, and sustainability. Capital Power brings a reliable dividend and cash flow from a diversified energy mix. Boralex adds faster growth potential through its global wind and solar projects. Innergex gives you a well-established pure-play on renewables, with strong cash generation and an international footprint. Together, they form a green energy trio that can grow inside your TFSA without the taxman taking a cut.

The world is changing quickly, and the companies leading the renewable energy shift are positioned for decades of opportunity. By investing through a TFSA, you not only build wealth but also support a cleaner, more sustainable future. With strong revenue, expanding projects, and attractive dividend yields, Capital Power, Boralex, and Innergex offer a smart and meaningful way to grow your money over the long term.