Top Green Energy Stocks to Buy in 2025

The rapid expansion of the green energy sector is welcoming sustainable development. In this fast-paced growth of environmental concerns, India is set to generate 50% of its electricity from non-fossil fuel sources. This goal is anticipated to be achieved by 2030. Most green energy companies in India welcome government support and initiatives to reach this objective. This passage will explore the best green and renewable energy stocks for 2025, key benefits, and considerations for investors.  

What are Green Energy Stocks?

Green energy stocks are the commodities of business enterprises operating to enhance the use of renewable resources like sunlight, hydropower, biomass, geothermal heat, and wind. The primary focus of such companies is to reduce carbon emissions in the country for a sustainable future. 

Today, investing in green energy stocks has become a popular choice for investors. And we’re here with some of the best stocks that could generate higher returns in the upcoming decades. Explore for more.  

List of Green and Renewable Energy (2025) Stocks

*Data is updated as of 13th November 2024

Factors to Consider When Investing in Green Energy Stocks

Investing in green energy stocks is quite beneficial for generating wealth. However, it is essential to consider some crucial factors in diversifying your portfolio. Here are some of the considerable factors discussed that could directly or indirectly impact the ROI (return on investment).

• ESG Performance: ESG (Environmental, Social, and Governance) could strongly indicate long-term sustainability. Top green energy companies in India are already excelling in such areas. Assess the company’s goals and initiatives to predict their future prospects for ESGs. 
• Diversified Investment: Ensure that your portfolio is diversified in more than one or two renewable energy stocks in India. Having potential stocks in the portfolio can spread investment and risks to balance the return. 
• Government Initiatives: The green energy sector is backed by government policies and support. It can significantly impact the performance of the best green energy stocks in India. Assess the current and upcoming government policies to analyse the change before anyone else. 
• Technological Integration: India has become a tech-driven market. Integration of new technologies in the green energy sector could bring a drastic change. Evaluate the organisational capabilities to adapt such technological integrations to identify the best renewable energy stocks in India. 

Green Energy Stocks Based On 1-Year Returns

*Data is updated as of 13th November 2024

Dividend Yield in Green Energy Stocks

The majority of investors are looking for stocks paying high dividends. This impeccable strategy of getting regular income with high returns has become popular in India. We know that not all companies have dividend payout policies. But don’t worry until you are with Univest. We have identified some of the best renewable energy stocks in India that provided impressive dividend payout for investors.

*Data is updated as of 13th November 2024

Benefits of Investing in Green Energy Stocks in India

India prioritises clean energy initiatives to achieve net zero emissions by 2070. In the Union Budget 2024-25, Finance Minister Smt. Nirmala Sitaraman announced that INR 6,250 crores was allocated to PM-Surya Ghar Muft Bijli Yojana. This encouraged the order books of businesses developing solar power projects in the country, and the stocks of these companies significantly increased. Investors could have numerous benefits from investing in green energy stocks in India in 2025. Let’s explore them together. 

1. Potential Growth

The green energy sector is full-fledged and can grow in the upcoming decades. For those who are seeking long-term growth in the stock market, investing in green energy stocks could be a stepping stone. As of now, India’s clean energy capacity has increased by 165%, and experts are anticipating this growth will continue. 

2. Government Initiatives

The Indian government has already introduced multiple policies and initiatives to promote the adoption of clean energy. This includes PLI (Production-Linked Incentives), ISTS (Inter State Transmission System), GTAM (Green Term Ahead Market), and more. Most policies were also added to the bucket list and are going to be launched shortly by GOI. Investors will benefit from such government support as it will bring significant growth in the best green energy stocks in India.  

3. Low Carbon Footprints

We are all aware of India’s aim to achieve net zero emissions by 2070. Renewable energy companies in India are integrating the best of their efforts to achieve this objective. Investing in green energy stocks could encourage one to contribute to low carbon footprints. This will result in more sustainability and less pollution in the environment. 

4. Diversified Portfolio

A diversified investment portfolio plays a vital role in generating balanced returns and high wealth. With the help of the best renewable energy stocks in India, one can create a diversified investment portfolio. Yes, it is possible. As we witness India focusing on low carbon emissions and more use of sustainable energy sources, shares of energy companies will face a significant rise in every new achievement. 

Risks Associated With Renewable Energy Stocks

The stock market is all about high-risk, high-reward play. However, not all investors have identical risk tolerances. Investing in green energy stocks in India comes with multiple risks that should be assessed in advance to safeguard against them. Here are some of the risks associated with renewable energy stocks in India. 

• Cost Inefficiency: Companies are currently using batteries for efficient energy storage. However, cost remains a barrier. Professionals are doing their best to find an alternative or to make storage solutions more efficient. To make a safe investment, be aware of upcoming trends related to clean energy storage. 
• High Requirement: The gap between demand and supply is significantly increasing daily. At night, most areas of India face a shortage of electricity. Due to insufficient supply, green energy stocks in India might have to suffer an imbalance. Consider investing in the right stock with proper research to safeguard against this risk. 
• Heavy Reliance on Thermal Energy: As of FY22-23, 75% of electricity generation in India was dependent on coal. This dependence is rooted in the cost-ineffectiveness of fossil fuel sources. Despite being an impeccable strategy, the transition to alternative energy sources is still challenging for renewable companies in India. 

Green Energy vs. Renewable Energy

Green Energy and Renewable Energy are often used interchangeably, but there is a difference. Not all renewable energy sources are green or clean. For example, burning wood is a renewable energy source, but we can not consider it a source of green energy. 

However, green energy will always be renewable in nature. Solar power is an example of this. Green energy is just a subset of renewable energy and focuses primarily on promoting sustainable energy generation in the economy. Both of these terms might have a crucial impact on the green energy stocks in India.  

Conclusion

The green industry sector in India has immense potential to grow in the upcoming years. Thus, if you identify the best green energy stocks in India, you can create a diversified portfolio in numerous ways. As an investor, you must conduct your own research before investing in green energy stocks in India. You can also consider Univest, the best stock advisory company, to manage your portfolio quarterly or yearly. Initiate your journey with five free trades now!

Frequently Asked Questions

1. What are the best green energy stocks to buy in 2025?

Ans. Here is the list of top green energy stocks that can boom in 2025. 

• NTPC Ltd. 
• JSW Energy
• Adani Green Energy Ltd. 
• Tata Power Company Ltd. 
• SJVN Ltd. 

2. Are there any penny stocks in the green energy sector in India?

Ans. Some green and renewable energy stocks in India are trading below INR 50. These include Orient Green Power Company Ltd. trading at INR 17.79, Tarini International Ltd. trading at INR 24.25, and SRM Energy Ltd. trading at INR 18.40.

3. What is India’s rank in producing green energy?

Ans. As per the Electricity Act of 2003, 100% of foreign direct investment is allowed in the green and renewable energy sector in India. The country ranks 5th in solar power capacity and 4th in wind power capacity worldwide. 

4. Who is India’s largest producer of green energy?

Ans. Here are the giant green energy producers in India. 

1. NTPC Ltd. (Market Cap. INR 3,74,000 cr.)
2. Adani Green Energy Ltd. (Market Cap. INR 2,39,000 cr.)
3. Adai Power Ltd. (Market Cap. INR 2,22,000 cr.)
4. JSW Green Energy Ltd. (Market Cap. INR 1,33,000 cr.)