In this article, we will look at the Best Renewable Energy Penny Stocks to Buy.
The renewable energy industry has moved from a policy-supported niche to a larger part of the global power system, and that shift has widened the field for both smaller public companies and large developers, as noted by the IEA. In earlier phases, IEA noted, growth was closely tied to subsidies, feed-in tariffs, and national decarbonization targets. More recently, the industry has also been driven by economics: lower solar module costs, wider corporate power demand, higher retail electricity prices in some markets, and the growing need for storage, grid equipment, and distributed generation.
By the end of 2024, global renewable power capacity had reached 4,448 gigawatts, according to IRENA. The agency said 585 GW was added in 2024 alone, up 15.1% year over year, with solar accounting for 452 GW of that increase and wind contributing 113 GW. Renewables also accounted for 92.5% of total power capacity additions in 2024, up from 85.8% in 2023. Separately, Ember reported that low-carbon sources supplied 40.9% of global electricity generation in 2024, reflecting how renewables are no longer a marginal part of the system.
That scale matters for smaller listed companies, including penny stocks, because industry growth is no longer limited to headline utility-scale projects. The IEA expects global renewable power capacity to increase by almost 4,600 GW between 2025 and 2030, with solar representing nearly 80% of the expansion. It also said distributed solar applications, including residential, commercial, industrial, and off-grid systems, are expected to account for 42% of overall PV expansion. That creates space for smaller firms tied to components, local project development, balance-of-system equipment, storage, and specialized services, even as the largest capacity additions remain concentrated in major markets and large incumbents.
The industry’s near-term direction still points to growth, but not evenly. The IEA, in its Renewables 2025 analysis, said renewable capacity is expected to grow faster in more than 80% of countries during 2025-2030 than in the prior five-year period, while warning that grid integration, financing, permitting, and supply-chain concentration remain major constraints. In other words, the market is still expanding, but execution risk remains high, which is especially relevant for smaller renewable names trading at penny-stock valuations.
Methodology
We used online screeners to narrow down on renewable energy penny stocks (share price below $5) and limited our selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. We then ranked them by the number of hedge funds holding stakes in them as of Q4 2025. These stocks are also popular among Wall Street analysts.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
11. XCF Global, Inc. (NASDAQ:SAFX)
Number of Hedge Fund Holders: 4
XCF Global, Inc. (NASDAQ:SAFX) is one of the best renewable energy penny stocks to buy.
On March 10, 2026, the company said it had received stockholder approval at its March 6 special meeting to remove the share cap that had limited the number of shares EEME could buy under an existing term sheet. That approval allows EEME to purchase the remaining shares it had committed to acquire as part of XCF’s ongoing capital raise.
XCF said EEME had already bought 38,000,000 common shares for $3,800,000 before the update. The company expects EEME to buy the remaining 62,000,000 shares for a total investment of $6,200,000, split into two equal tranches, subject to closing conditions. XCF also said the first merger closing is expected in March 2026, with the second targeted by March 31, 2026, if those conditions are met.
The company added that, after the second closing, the combined business is expected to retain the XCF Global name and Nasdaq ticker symbol SAFX. It also said DevvStream shareholders would receive contingent value rights tied to 20% of the net proceeds from certain legacy DevvStream commercial claims.
XCF Global, Inc. (NASDAQ: SAFX) is a sustainable aviation fuel company focused on helping decarbonize air travel. Its New Rise Renewables Reno facility is operational and has permitted nameplate production capacity of 38 million gallons per year.
10. FTC Solar, Inc. (NASDAQ:FTCI)
Number of Hedge Fund Holders: 7
FTC Solar, Inc. (NASDAQ:FTCI) is one of the best renewable energy penny stocks to buy.
On March 10, 2026, FTC Solar said it signed a five-year, 1,000-megawatt expansion to its tracker supply agreement with Strata Clean Energy, deepening an existing relationship between the two companies. The new agreement is scheduled to take effect in the second half of 2027.
The deal builds on the companies’ earlier three-year, 500 MW tracker supply agreement that began in September 2024, under which FTC Solar became Strata’s preferred supplier. FTC Solar said the expansion followed the successful completion of the initial 500 MW of projects using its Voyager 2P solar tracker technology.
The announcement came just days after FTC Solar reported fourth-quarter 2025 financial results on March 5. Revenue rose to $32.9 million in the quarter, up 26.2% from the prior quarter and 148.9% from a year earlier. The company also said gross margin improved by about 1,500 basis points year over year, while management pointed to stronger commercial traction, a larger project pipeline, and continued recovery in its business.
FTC Solar, Inc. (NASDAQ:FTCI) provides solar tracker systems, software, and engineering services that help solar power installations improve energy production by optimizing panel orientation.
9. OPAL Fuels Inc. (NASDAQ:OPAL)
Number of Hedge Fund Holders: 8
OPAL Fuels Inc. (NASDAQ:OPAL) is one of the best renewable energy penny stocks to buy.
On March 9, 2026, OPAL Fuels announced that it had closed a new $180 million preferred stock facility with an affiliate of its majority shareholder, Fortistar. At the closing, the company issued $120 million under the facility, with the remaining $60 million available for future drawdowns.
The company said about $100 million of the initial funding was used to fully redeem the Series A Preferred Units previously owned by Mendocino Capital, LLC, a wholly owned subsidiary of NextEra Energy, Inc. The remaining funds may be used for general corporate purposes, including working capital, capital expenditures, and project-level financing.
Management said the financing would support OPAL Fuels’ next stage of growth by helping fund the development and construction of new renewable natural gas projects and fueling infrastructure for heavy-duty transportation. In the related 8-K, OPAL Fuels said the new Series A Preferred Units carry preferred quarterly distributions of 12% per annum, compounded quarterly.
OPAL Fuels Inc. (NASDAQ:OPAL) is a producer and distributor of renewable natural gas for heavy-duty trucking and other transportation markets. The company also develops and operates RNG production projects and fueling infrastructure across the United States.
8. Gevo, Inc. (NASDAQ:GEVO)
Number of Hedge Fund Holders: 10
Gevo, Inc. (NASDAQ:GEVO) is one of the best renewable energy penny stocks to buy.
On March 5, 2026, Gevo reported fourth-quarter and full-year 2025 financial results and paired them with a business update centered on its Gevo North Dakota platform. The company posted fourth-quarter revenue of $45 million and full-year revenue of $161 million. Loss from operations narrowed to $2.2 million in the quarter, while non-GAAP adjusted EBITDA reached $7.7 million, marking Gevo’s third straight quarter of positive adjusted EBITDA. Gevo also generated $20 million of positive operating cash flow in the fourth quarter and ended the year with $117 million in cash, cash equivalents, and restricted cash.
The North Dakota asset was a key part of the update. Gevo said the plant produced a record 69 million gallons of low-carbon ethanol in 2025, up 3% from 67 million gallons in 2024. Management also approved a capital plan to expand Gevo North Dakota’s ethanol capacity to 75 million gallons per year, while aiming to produce more co-products, improve energy efficiency, capture more carbon dioxide, and strengthen operational reliability. The company said those projects are expected to begin delivering returns in early 2027.
Management tied the stronger results to execution across fuels, carbon markets, and tax credit monetization. Gevo sold $52 million of production tax credits in 2025 related to Gevo North Dakota and received about $41 million of cash proceeds during the year. It is now targeting neutral-to-positive cash flow from operations for 2026 and has reaffirmed its near-term goal of reaching a run-rate non-GAAP adjusted EBITDA of about $40 million per year.
Gevo, Inc. (NASDAQ:GEVO) is a renewable fuels and carbon management company focused on low-carbon ethanol, renewable natural gas, carbon removal credits, and sustainable aviation fuel development.
7. Montauk Renewables (NASDAQ:MNTK)
Number of Hedge Fund Holders: 10
Montauk Renewables (NASDAQ:MNTK) is one of the best renewable energy penny stocks to buy.
On March 11, 2026, Montauk Renewables reported full-year 2025 results showing revenue of $176.4 million, essentially flat from $175.7 million in 2024, as a 29.0% drop in average realized RIN pricing to $2.33 offset the stronger natural gas index pricing, which rose 51.1%, and higher RIN volumes sold. The company sold 44.1 million RINs in 2025, up 20.5% year over year, while RNG production increased 1.0% to 5.6 million MMBtu when adjusted for the prior-year sale of an RNG facility.
Profitability weakened. Net income fell 82.0% to $1.7 million, operating income dropped 94.7% to $0.9 million, and adjusted EBITDA declined 16.5% to $35.6 million. Management attributed the pressure mainly to higher operating and maintenance costs at RNG facilities, including increased utility expense, preventative maintenance, wellfield operational enhancement programs, media change-outs, and disposal costs at Apex, Atascocita, Rumpke, and Raeger. Renewable electricity operating and maintenance expense also rose, driven mainly by non-capitalizable costs at the Montauk Ag Renewables project.
For 2026, Montauk expects RNG revenue of $175 million to $190 million on production of 5.8 million to 6.1 million MMBtu. It also guided for renewable electricity revenue of $35 million to $41 million and production of 195 thousand to 207 thousand MWh, with the increase tied to the anticipated commercial operation of the Montauk Ag Renewables project in North Carolina.
Montauk Renewables, Inc. (NASDAQ:MNTK) is a renewable energy company focused on recovering biogas and converting it into renewable natural gas and renewable electricity. Headquartered in Pittsburgh, the company operates landfill methane-fueled projects across multiple U.S. states.
6. Stem, Inc. (NYSE:STEM)
Number of Hedge Fund Holders: 11
Stem, Inc. (NYSE:STEM) is one of the best renewable energy penny stocks to buy.
On March 10, 2026, UBS lowered its price target on Stem to $12 from $18 but kept a Neutral rating, citing a slower software sales outlook. The firm also reduced its adjusted EBITDA estimates for 2026, 2027, and 2028 to $10 million, $22 million, and $41 million, respectively, from prior forecasts of $17 million, $29 million, and $50 million. The revised target followed Stem’s fourth-quarter 2025 results, which the company had released on March 4.
Stem reported fourth-quarter 2025 revenue of $47.2 million, down 15% year over year, which the company said was mainly due to sharply lower battery hardware sales as part of its software-focused strategy. At the same time, software, services, and edge hardware revenue rose 62% to $46.5 million. Fourth-quarter non-GAAP gross margin improved to 45% from 36%, adjusted EBITDA rose to $5.5 million from $4.2 million, and net loss narrowed to $16.0 million from $51.1 million.
For full-year 2025, revenue increased 8% to $156.3 million, while software, services, and edge hardware revenue climbed 25% to $141.4 million. Stem also posted full-year adjusted EBITDA of $6.7 million, compared with a loss of $22.8 million in 2024, and ended the fourth quarter with $48.9 million in cash and cash equivalents.
Stem, Inc. (NYSE:STEM) provides software, services, and energy management technology for clean energy assets, helping customers monitor, optimize, and operate storage, solar, and other distributed energy systems across global markets.
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