11 Best Green Stocks To Invest In 2023

In this article, we discuss the 11 best green stocks to invest in 2023.

Renewable energy and its associated sources like wind and solar have become significant subjects of discussion, not only among everyday consumers but also within the realms of businesses, investors, and financial experts. With global warming escalating each moment, there is a growing fixation within the global community to mitigate the impact of rapid climate change and preserve the planet and its resources for future generations. The adoption of renewable energy is on the rise, emerging as the fastest-growing energy source globally. As such, a number of companies and countries have set their sights on achieving net zero carbon emissions by 2050.

Recent advancements have shown encouraging signs, with 2022 marking a record-breaking year for new renewable electricity capacity. As an illustration, approximately 340 gigawatts (GW) of capacity was added during the year. The implementation of significant policies in 2022, such as REPowerEU in the European Union, the Inflation Reduction Act (IRA) in the United States, and China’s 14th Five-Year Plan for Renewable Energy, will provide added impetus to expedite the deployment of renewable electricity in the upcoming years. Notably, in 2022, China accounted for nearly half of all investments in green energy. Their investment in clean energy amounted to $546 billion, surpassing the United States, which invested $141 billion during the same period. Additionally, the European Union recently secured a provisional agreement to increase the proportion of renewable energy to 42.5% by 2030, up from the current 32%. That said, the United States isn’t lagging behind by any means. In the next decade, the nation’s yearly renewable energy capacity has the potential to triple, reaching 110 gigawatts (GW), propelled by advancements in clean-energy legislation spurring increased investments in the sector.

In addition, the International Energy Agency (IEA) predicts a 3% annual increase in global electricity demand from 2023 to 2025, surpassing the growth rate seen in 2022. The firm highlights that over 70% of this surge will likely originate from China, Southeast Asia, and India. Concurrently, developed economies are striving to boost electricity production and decrease dependence on fossil fuels, particularly in heating and transportation sectors. The IEA also forecasts that renewable energy sources like solar and wind power, along with nuclear energy, will collectively cater to over 90% of the additional global demand by 2025.

To take advantage of the growth of the global renewable energy industry, investors can look towards notable names within the industry that reign as some of the best clean energy stocks, including the likes of Tesla, Inc. (NASDAQ:TSLA), General Electric Company (NYSE:GE), and NextEra Energy, Inc. (NYSE:NEE).

Our Methodology

Following an extensive analysis of the renewable energy sector, we identified 11 of the best clean energy stocks with the highest hedge fund ownership during the second quarter of 2023. The hedge fund sentiment for each stock was extracted from Insider Monkey’s database, encompassing 910 top-tier hedge funds. Our selection specifically focused on stocks with significant involvement or infrastructure within the renewable energy sector.

11. Brookfield Renewable Partners L.P. (NYSE:BEP)

Number of Hedge Fund Holders: 13

Brookfield Renewable Partners L.P. (NYSE:BEP) is a publicly listed limited partnership that manages and oversees renewable power assets. The company’s corporate headquarters are based in Toronto, Ontario, Canada. The Brookfield Corporation (NYSE:BN) holds a majority ownership of 60% in the partnership.

Earlier in June of this year, the green energy corporation revealed its decision to purchase Duke Energy Renewables, an integrated developer and operator of renewable power assets in the U.S. They have an impressive portfolio, including 5,900 megawatts of operational and under-construction wind, utility-scale solar, and storage assets, along with a 6,100 megawatt development pipeline. This acquisition is valued at $1.05 billion in equity proceeds, approximately $265 million net to Brookfield Renewable Partners L.P. (NYSE:BEP).

In Q2 2023, 13 hedge funds had a stake worth $108.36 million in Brookfield Renewable Partners L.P. (NYSE:BEP). Robert Joseph Caruso’s Select Equity Group was the most prominent hedge fund holder in the second quarter with over 3 million shares worth $89.789 million.

ClearBridge Investments made the following comment about Brookfield Renewable Partners L.P. (NYSE:BEP) in its Q4 2022 investor letter:

“Rising interest rates remain the key risk to renewables utility Brookfield Renewable Partners L.P. (NYSE:BEP), an underperformer in the fourth quarter, though we view Brookfield’s stable fundamentals (with >90% of contracted cash flows having an average term of 14 years), inflation protection (~70% of power purchase agreements are indexed to inflation) and long-term growth opportunities as attractive in the current environment. Brookfield’s balance sheet is also relatively well-protected against rising rates given it has 97% fixed-rate debt with an average term to maturity of 12 years.”

Much like Tesla, Inc. (NASDAQ:TSLA), General Electric Company (NYSE:GE), and NextEra Energy, Inc. (NYSE:NEE), Brookfield Renewable Partners L.P. (NYSE:BEP) is a prominent player in the race for renewable energy.

10. Fluence Energy, Inc. (NASDAQ:FLNC)

Number of Hedge Fund Holders: 19

Fluence Energy, Inc. (NASDAQ:FLNC) is a U.S.-based company specializing in renewable energy storage solutions and services. Additionally, they provide AI-powered digital applications tailored for renewable energy and storage purposes. Ranking among the best clean energy stocks to invest in, the company extends its services to approximately 47 international markets.

According to the 2023 Battery Energy Storage System Integrator Report by S&P Global Commodity Insights, Fluence Energy, Inc. (NASDAQ:FLNC) has secured the position of being one of the leading global suppliers of battery-based energy storage systems. This ranking is determined by the market share of projects that are either installed or in the planning stages. The report also highlights Fluence as one of the foremost storage providers in the U.S. market, holding a 22% market share based on the installed capacity measured in megawatts.

Fluence Energy, Inc. (NASDAQ:FLNC) experienced notable bullish sentiment from hedge funds during the second quarter of 2023 with a total of 19 hedge funds holding the company’s stock, collectively amounting to a stake value of $143.776 million. Comparatively, in the preceding quarter, 13 hedge funds possessed shares of Fluence Energy, Inc. (NASDAQ:FLNC), with a combined value of $122.270 million.

9. Clearway Energy, Inc. (NYSE:CWEN)

Number of Hedge Fund Holders: 29

Clearway Energy, Inc. (NYSE:CWEN) stands as a major renewable energy proprietor in the United States, boasting an impressive portfolio of over 5,500 net MW from installed wind and solar generation projects. The company possesses a varied collection of contracted assets in the United States, encompassing both renewable and traditional power generation as well as thermal infrastructure. This assortment, which includes fossil fuel, solar, and wind power facilities with the capability to cater to over two million residences and enterprises in the United States, makes Clearway Energy, Inc. (NYSE:CWEN) a prominent clean energy stock.

Clearway Energy (NYSE:CWEN) saw a 10% increase in October 6 trading following an upgrade by Bank of America from Neutral to Buy, accompanied by a price target of $27. This upgrade is based on the anticipation of rising power prices in California. Julien Dumoulin-Smith from BofA noted the potential for significant upside, citing the higher pricing in California’s power markets related to resource adequacy. He believes this will drive dividend growth above the average and effectively counterbalance the impacts of increased interest rates.

As of the close of Q2 2023, 29 hedge funds in Insider Monkey’s database reported having stakes in Clearway Energy, Inc. (NYSE:CWEN), worth collectively $114.9 million. This is compared to 25 hedge funds in the previous quarter that held stakes valued at $106.18 million.

8. SolarEdge Technologies, Inc. (NASDAQ:SEDG)

Number of Hedge Fund Holders: 43

SolarEdge Technologies, Inc. (NASDAQ:SEDG) is an Israeli solar technology company based in Herzliya. It provides a variety of different products such as solar inverters, optimizers, and energy management systems. Established in 2006, SolarEdge Technologies, Inc. (NASDAQ:SEDG) developed a DC optimized inverter system and was among the first to successfully commercialize Power Optimizers, making it one of the best clean energy stocks to look out for.

SolarEdge Technologies, Inc. (NASDAQ:SEDG) disclosed its Q2 non-GAAP EPS of $2.79 on August 1, surpassing market expectations by $0.23. The company experienced a notable 36.2% year-over-year revenue growth, reaching $991.29 million. However, it slightly missed the Street consensus by $4.6 million.

According to Insider Monkey’s second quarter database, SolarEdge Technologies, Inc. (NASDAQ:SEDG) was part of 43 hedge fund portfolios, compared to 42 in the prior quarter. D E Shaw is the largest stakeholder of the company, with 1.50 million shares worth $404.65 million.

Here is what ClearBridge International Growth EAFE Portfolio has to say about SolarEdge Technologies, Inc. (NASDAQ:SEDG) in its Q2 2022 investor letter:

“We are well-positioned to participate in the accelerating energy transition. High and rising utility costs combined with policy support are driving increased penetration of home solar plus storage systems in Europe. Israel-based SolarEdge Technologies (NASDAQ:SEDG) expects to see significant growth in solar installations in this market led by Germany and Italy, among others, where consumers are not only demanding solar on the roof but a complete system solution including batteries. This phenomenon is accelerating revenue growth for these companies.”

7. Constellation Energy Corporation (NASDAQ:CEG)

Number of Hedge Fund Holders: 46

Constellation Energy Corporation (NASDAQ:CEG) is an American firm specializing in providing electric power, natural gas, and energy management services throughout the United States. The company delivers utility services to its customer base utilizing various energy sources such as fossil fuels, nuclear energy, and renewables. Established in 1999, Constellation Energy Corporation (NASDAQ:CEG) has its headquarters in Baltimore, Maryland.

On August 3, Constellation Energy Corporation (NASDAQ:CEG) reported robust Q2 results, achieving a GAAP EPS of $2.56, significantly surpassing estimates by an impressive margin of $1.94. Moreover, its revenue of $5.45 billion exceeded forecasts by $900 million.

In Q2 2023, Constellation Energy Corporation (NASDAQ:CEG) stock was held by 46 hedge funds, amounting to a combined value of $1.85 billion. William B. Gray’s Orbis Investment Management was the firm’s largest shareholder for the quarter, with a stake worth approximately $495.38 million.

6. Enphase Energy, Inc. (NASDAQ:ENPH)

Number of Hedge Fund Holders: 50

Enphase Energy, Inc. (NASDAQ:ENPH) is a company based in California, specializing in clean energy technology. The company provides a range of products including solar micro-inverters, EV charging stations, and battery energy storage solutions. A market leader with products in over 140 countries worldwide, Enphase Energy, Inc. (NASDAQ:ENPH) reigns as one of the best clean energy stocks to buy.

On September 21, Seaport Research upgraded Enphase Energy, Inc. (NASDAQ:ENPH) from Neutral to Buy, setting a price target of $180. The research firm highlighted the company’s expected benefits from ongoing share repurchases, growth in the European solar market, and “a clear emergent recovery in U.S. residential solar installations.”

According to the Insider Monkey database, 50 hedge funds were bullish on Enphase Energy, Inc. (NASDAQ:ENPH) in the second quarter of 2023. Of these, Philippe Laffont’s Coatue Management is the company’s leading shareholder, with stakes worth roughly $102.5 million.

Here’s what Carillon Tower Advisers said about Enphase Energy, Inc. (NASDAQ:ENPH) in its second-quarter 2023 investor letter:

“Enphase Energy provides solar microinverters and energy storage solutions. The company’s shares lagged benchmark counterparts amid concerns surrounding a near-term moderation in the growth of residential solar installation in the United States. Despite this, the company possesses a market-leading position in its core microinverter product and remains wellpositioned over the long term to benefit from ongoing solar adoption trends. Additionally, Enphase is focused on growing its international presence while also unveiling new products that could provide the next tailwind to its growth story.”

Similar to Tesla, Inc. (NASDAQ:TSLA), General Electric Company (NYSE:GE), and NextEra Energy, Inc. (NYSE:NEE), Enphase Energy, Inc. (NASDAQ:ENPH) ranks high among the best clean energy stocks to invest in.

5. First Solar, Inc. (NASDAQ:FSLR)

Number of Hedge Fund Holders: 50

First Solar, Inc. (NASDAQ:FSLR) is a U.S.-based company specializing in the manufacturing of solar panels and offering utility-scale PV power plants. The company provides a range of services, encompassing finance, construction, maintenance, and end-of-life panel recycling for comprehensive solar solutions.

On September 21, First Solar, Inc. (NASDAQ:FSLR) initiated the construction of its fifth fully vertically integrated manufacturing facility within the United States. This facility, located in Louisiana, represents an investment of around $1.1 billion. Upon completion, the facility is expected to augment First Solar, Inc. (NASDAQ:FSLR)’s global manufacturing capacity by 3.5 GW and is projected to commence commercial shipments by 2026.

According to Insider Monkey’s second quarter database, 50 hedge funds were bullish on First Solar, Inc. (NASDAQ:FSLR), compared to 39 hedge funds in the last quarter. Robert Pohly’s Samlyn Capital held a significant position in the company, with 1.26 million shares valued at $239.5 million.

4. PG&E Corporation (NYSE:PCG)

Number of Hedge Fund Holders: 51

PG&E Corporation (NYSE:PCG), also recognized as Pacific Gas and Electric Company, operates as a utility company based in California. The company supplies electricity to a vast customer base exceeding 5 million in California. Its electricity generation methods encompass natural gas, solar plants, hydropower, and nuclear energy.

On October 12, PG&E introduced its Microgrid Incentive Program (MIP), an innovative project designed to provide financial assistance for multi-customer microgrids proposed by community, local, and tribal governments. The MIP, a competitive grant program spanning the state and endowed with a $200 million budget, aims to accelerate the establishment of clean-energy community microgrids within disadvantaged and vulnerable communities throughout California.

On August 7, UBS analyst Gregg Orrill elevated PG&E Corporation (NYSE:PCG)’s stock rating from Neutral to Buy, concurrently raising the company’s price target to $21 from $19. This adjustment was based on Orrill’s assessment that PG&E Corporation (NYSE:PCG) has notably reduced the wildfire risk associated with its equipment by approximately 90% since the years 2017-18.

In Q2 2023, PG&E Corporation (NYSE:PCG)’s stock was owned by 51 hedge funds. Dan Loeb’s Third Point Management was the most prominent stakeholder in the company with 54 million shares worth $933.120 million.

Third Point Management made the following comment about PG&E Corporation (NYSE:PCG) in its Q1 2023 investor letter:

“Our strategy is to preserve liquidity and buying power to take advantage of markets when they “break”. While overall indices remain elevated, we are finding more chances to provide liquidity across all three asset classes in which we invest – credit, structured credit, and equity – opportunities which have been key drivers of performance for the fund. Our portfolio is balanced across industries with a focus on event-driven names including companies involved in spin-offs, significant cost-cutting, or other types of under-appreciated business transformation. PG&E Corporation (NYSE:PCG), which is still our largest position, continues to deliver strong performance, down 50bps in the first quarter but up 6.2% for the year to date after the Fire Victims Trust sold another 60 million shares in a block trade.”

3. NextEra Energy, Inc. (NYSE:NEE)

Number of Hedge Fund Holders: 59

NextEra Energy, Inc. (NYSE:NEE) stands as a prominent figure in the realm of green energy worldwide. With an impressive 67 gigawatts of generation capacity, a significant portion hails from renewable sources. The company has set ambitious goals aligned with its ‘Real Zero’ plan, striving to eradicate all carbon emissions by 2045. The corporation has consistently increased its dividends for 27 successive years, presently disbursing a quarterly dividend of $0.4675 per share. As of October 14, the stock reflects a dividend yield of 3.43%.

NextEra Energy, Inc. (NYSE:NEE) was a part of 59 hedge fund portfolios, the same as in the previous quarter, as per Insider Monkey’s database. The collective value of stakes owned by these hedge funds is over $918.3 million.

2. General Electric Company (NYSE:GE)

Number of Hedge Fund Holders: 71

General Electric Company (NYSE:GE), established in 1892 and registered in the state of New York with headquarters in Boston, is a prominent American multinational conglomerate. The company operates across various divisions, encompassing aerospace, power, renewable energy, digital industry, additive manufacturing, as well as venture capital and finance.

During the second quarter, General Electric Company (NYSE:GE) disclosed a non-GAAP EPS of $0.68 and revenue of $16.7 billion, surpassing predictions by $0.22 and $1.5 billion, respectively. The company enhanced its FY 2023 organic revenue growth projection, shifting it to a low-double-digit range from the initial high-single-digit range. Additionally, the adjusted EPS outlook was raised to $2.10 to $2.30 from the earlier projection of $1.70 to $2.00.

In the second quarter, 71 hedge funds had a stake worth nearly $10.2 billion in General Electric Company (NYSE:GE). In the previous quarter, the company was a part of 59 hedge fund portfolios with a combined stake of $7.6 billion. The most prominent stake in Q2 was held by Chris Hohn’s TCI Fund Management with 41.65 million General Electric Company (NYSE:GE) shares worth $4.575 billion.

Vulcan Value Partners made the following comment about General Electric Company (NYSE:GE) in its Q1 2023 investor letter:

“General Electric Company (NYSE:GE) was a material contributor during the quarter. With the successful spin-off of GE HealthCare in early January, the company operates in two major markets: GE Aerospace and GE Vernova. GE Aerospace powers three out of every four commercial flights. GE Vernova helps generate 30% of the world’s electricity and has a meaningful role to play in the energy transition. The company’s service activities, which are higher margin and more resilient, represent approximately 60% of revenue and 85% of its backlog. The company reported strong fourth quarter 2022 results and management’s 2023 outlook is positive.”

1. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 79

Tesla, Inc. (NASDAQ:TSLA), headquartered in Austin, Texas, is a prominent American multinational company specializing in electric vehicles, stationary battery energy storage units for various scales (from residential to grid-level), solar panels, solar shingles, and associated products and services.

In September 2023, Tesla Inc. (NASDAQ:TSLA) was granted the green light by the Public Utility Commission of Texas to initiate two trial programs for its Virtual Power Plant (VPP) initiative. This authorization empowers owners of Tesla Powerwall systems to sell surplus solar-generated energy back to the Electric Reliability Council of Texas (ERCOT) grid, forming a sizable distributed battery capable of aiding peak demand and averting blackouts. Anticipated is further approval for an additional six VPPs by Tesla Inc. (NASDAQ:TSLA) in Texas, benefiting from a conducive ERCOT market, enabling real-time experimentation and tangible real-world impacts.

Based on the Insider Monkey database, Tesla, Inc. (NASDAQ:TSLA) was in the portfolios of 79 hedge funds during the second quarter of 2023, positioning it as the top green stock to invest in. Notably, Cathie Wood of ARK Investment Management has expressed a strong bullish sentiment towards Tesla, Inc. (NASDAQ:TSLA) for an extended period and emerged as the leading hedge fund holder of the company.

Baron Funds made the following comment about Tesla, Inc. (NASDAQ:TSLA) in its Q1 2023 investor letter:

“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells EVs, related software and components, and solar and energy storage products. Following a sharp decline at the end of 2022, Tesla’s stock rebounded in the first quarter of 2023 on investor expectations that Tesla will continue to grow vehicle deliveries and maintain solid gross and operating margins despite a potential recession, competition in China, and vehicle price reductions. We wrote a long piece on Tesla last quarter and refer readers back to it, because for long-term investors not much has changed over the last three months. Tesla did hold its first Investor Day in March, and several Baron analysts and portfolio managers attended. We toured the Austin Gigafactory, drove in a Cybertruck, boarded a Semi truck, and spoke with a wide swath of Tesla senior managers. During the formal presentation, Tesla highlighted, among other things: (1) its broad and deep bench of executive talent supporting CEO Elon Musk; (2) its “Master Plan 3–Sustainable Energy for All of Earth,” which featured EVs, renewable power from solar and wind, and stationary electric storage; (3) its vehicle assembly innovations, including massive casted parts (building Model Y bodies with single front and rear castings, replacing a substantial number of parts and fastening steps), a stainless steel exoskeleton (for Cybertruck), and its next-generation highly efficient “unboxed process” for its next-gen $25,000 vehicle; (4) a future permanent[1]magnet electric motor that will not require any rare earths; and (5) the massive untapped market opportunity for commercial stationary electric storage, branded Megapack, as the world steadily shifts to renewable energy. As long-term shareholders, we have witnessed Tesla exploit its innovative Model 3/Y now-global mass-market platform to increase vehicle deliveries from barely a standing start to over 1.3 million units, while achieving industry-leading margins and reinforcing its iron-clad balance sheet to almost $23 billion in cash (and effectively no recourse debt). We expect Tesla’s next-generation EV and Megapack products to have a similar impact on company results.”

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Disclaimer: None. 11 Best Green Stocks To Invest In 2023 is originally published on Insider Monkey.