How I’d Invest $20,000 in Canadian Renewable Energy Stocks to Become Financially Independent

Renewable energy stocks remain some of the best future investments, and these three already show strength.

When you think about becoming financially independent, the idea of putting your money to work in something stable, reliable, and forward-looking is probably near the top of the list. And few sectors check all those boxes quite like energy, especially renewable energy. Canada has some top-notch energy stocks that don’t just provide power to the grid, but steady passive income to your portfolio. With $20,000 to invest, I’d be putting it into two standouts on the TSX: Brookfield Renewable Partners (TSX: BEP.UN) and Hydro One (TSX: H).

A solar cell panel generates power in a country mountain landscape.

Source: Getty Images

Brookfield

Renewable energy isn’t just a trend, it’s a massive, global shift, tapping into a sector that is likely to see long-term growth as more infrastructure, subsidies, and consumer habits tilt green. With that in mind, let’s start with Brookfield Renewable Partners. It’s one of the biggest pure-play renewable energy stocks in the world, and it’s based right here in Canada. Brookfield operates a massive portfolio of hydro, solar, wind, and storage assets across the globe. That global footprint helps reduce risk and provides a wide range of revenue streams. This isn’t an energy stock hoping to become profitable one day, it already is.

In its most recent earnings release for the first quarter of 2025, Brookfield Renewable reported funds from operations of $315 million, or $0.48 per unit. That’s a 7% jump from the same quarter last year. What’s driving that growth? For starters, the company brought new assets online, including acquisitions like Neoen and a pending deal for National Grid Renewables. At a time when many energy stocks are slowing down, Brookfield is speeding up. It’s got over $4.5 billion in available liquidity and continues to recycle capital into higher-return projects. This isn’t just a dividend stock, it’s a growth story, too.

Brookfield also pays investors for their patience. It currently offers a forward dividend yield of about 6.7%. That’s a solid income stream, especially when paired with the kind of long-term capital appreciation potential the stock has.

Hydro One

Now let’s shift to Hydro One. While it may not have the same global flair as Brookfield, it brings something else to the table: stability. Hydro One is Ontario’s largest electricity transmission and distribution utility. In other words, it keeps the lights on for millions of Canadians, and that’s not something people cut back on, even in a recession.

Hydro One has been steadily modernizing its infrastructure and making the grid more reliable. In 2024, it brought in $8.5 billion in revenue and $1.16 billion in net income. The energy stock also continues to invest in Ontario’s electricity future, with over $3 billion spent on capital improvements last year.

It raised its dividend again, now paying $0.3142 per share quarterly, which works out to an annual yield of about 2.4%. That may not sound like much compared to Brookfield, but it’s about as safe and predictable as income gets. With a $10,000 investment, you’ll have the peace of mind that comes from knowing Hydro One is about as essential as it gets.

Equal split

So, how would I split the $20,000? I’d go half and half, $10,000 into Brookfield for the higher income and long-term growth, and $10,000 into Hydro One for safety, stability, and dependable dividends. Together, that combo gives you a nice blend of yield, growth, and risk management.

That $20,000 would also give you about $907.64 in annual passive income right off the bat. And because both energy stocks have a history of increasing their payouts over time, that number could climb steadily in the years ahead, without you having to do a thing.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYTOTAL INVESTMENT
H$52.91189$1.26$238.14Quarterly$10,000
BEP.UN$30.74325$2.06$669.50Quarterly$10,000

When building a path toward financial independence, it helps to think about what kind of companies will be around, thriving, and paying you long after you’ve stopped working. Brookfield Renewable and Hydro One both fit that bill. They’re powering the future and in the process can help you power your own financial goals.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Renewable Partners. The Motley Fool has a disclosure policy.

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