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Renewable Energy Group Inc (REGI), NextEra Energy, Inc. (NEE): Five Best Stocks to Buy in Renewable Energy

Will advances in solar technology finally push its share of energy production to levels once promised? I”m optimistic that solar can enjoy the same growth that wind has witnessed in the past decade, although I’m not sure I would open a position at current prices. Then again, at its market cap of just $3 billion, you could make the case that SunPower Corporation (NASDAQ:SPWR) is a great long-term play. If you haven’t noticed, that’s the Foolish way to look at things.

Valero Energy Corporation (NYSE:VLO)

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You may wonder how Valero Energy Corporation (NYSE:VLO) makes a list for renewable energy. However, I believe that the nation’s third largest refiner has potential as a budding renewable-energy play for investors. Valero became the third largest ethanol producer in the country — with 1.2 billion gallons of annual capacity — after acquiring 10 state-of-the-art biorefineries in recent years. It’s a relatively new venture, but look for the company to begin building second-generation biofuel manufacturing capacity by the end of the decade.

Valero Energy Corporation (NYSE:VLO) has also made investments in next-generation biofuel technologies such as green crude and algae farms, although each will take considerable time to prove effective at commercial scale. In addition, the company erected a 50 MW wind farm in 2009, but its sole purpose is to supply power to its 70-year-old refinery in Sunray, Texas. Does that qualify as green crude?

Waste Management, Inc. (NYSE:WM)

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Rounding out the alphabetically sorted list is Waste Management, Inc. (NYSE:WM). You may think this is another unusual play in renewable energy, but the company is developing a vast portfolio of waste-to-energy technologies that turn the status quo on its head. The waste-service provider has discovered how to efficiently use the garbage in its landfills to produce compressed natural gas fuel, clean electricity, and manmade carbon sinks for the betterment of the environment.

The company believes its landfills produce more electricity each year than the entire American solar industry. Perhaps more astonishing, an ambitious goal to increase renewable-energy production 67% by 2020 is on schedule. That would give Waste Management, Inc. (NYSE:WM) an energy portfolio capable of powering more than 2 million homes and offset nearly 3.7 million tons of coal. Invest in a sleek renewable-energy stock and enjoy one of the best dividends on the market. What more could you want?

Foolish bottom line
We’ll probably never live in a world that generates more power from renewable energy than from fossil fuels, but that won’t stop an ambitious group of companies from trying. That ambition equates to opportunities for savvy investors, even if it does seem like a long shot today. The truth is we can never rule out game-changing technologies from being developed. For instance, Pittsburgh-based Aquion Energy is developing grid-level energy storage solutions that could alleviate the large fluctuations of wind and solar power generation. If we could store wind energy generated in off-peak hours and feed it to the grid during peak usage, the United States could technically generate all of its electricity from wind alone. Maybe all of that ambition will pay off after all.

The article 5 Best Stocks to Buy in Renewable Energy originally appeared on and is written by Maxx Chatsko.

Fool contributor Maxx Chatsko has no position in any stocks mentioned. Check out his personal portfolio or his CAPS page, or follow him on Twitter, @BlacknGoldFool, to keep up with his writing on energy, bioprocessing, and emerging technologies.The Motley Fool recommends and owns shares of Waste Management.

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