4 renewable energy stocks to buy right now

Rupert Hargreaves explains why he’d buy these four renewable energy stocks to invest in the green energy revolution. 

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The renewable energy market’s booming, and I want to get in on the surging demand for green energy. As such, here are five renewable energy stocks I’d buy right now.

Renewable energy giant

When it comes to finding investments with exposure to the renewables sector, I think it is best to look outside the box. Many companies offer direct exposure to the sector, but even more offer indirect exposure. 

BP‘s a good example. This business is a major oil and gas producer, but it’s planning to invest tens of billions of dollars in green energy projects over the next few years. 

Should you invest £1,000 in BP right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if BP made the list?

See the 6 stocks

Some investors might want to avoid this company due to its exposure to fossil-based fuel production. That’s understandable. However, there aren’t many other London-listed businesses that offer the same kind of exposure and growth potential as BP, in my eyes, when it comes to renewable energy stocks. 

That’s why I’d buy the firm for my portfolio, despite the risks of investing in an oil-based business. Indeed, as a major polluter, the company could face rising costs as we advance. 

Energy storage 

One of the significant challenges the renewables industry faces is storing energy. Power generation from wind and solar assets can be volatile, so finding a way to harvest energy and smooth out grid volatility is vital for the sector. 

To play this theme, I’d buy the Gresham House Energy Storage Fund. The fund invests in utility-scale operational energy storage systems, primarily utilising batteries across Britain.

The investment trust has a target return of 8% per annum, before leverage, and 15% per annum when leverage is considered.

And recently, it raised another £100m from investors to fund expansion plans.  That said, while the trust has recently performed well, these are just targets. If it ends up overpaying for assets, returns could come in below expectations. A price war with competitors could also dent returns. 

Still, considering the need for energy storage and demand from investors for exposure to these assets, I think the firm can continue to expand. That’s why I’d buy the shares for my portfolio of renewable energy stocks today. 

Hydrogen power

Another way I’d play the energy storage trade is with hydrogen. As this sector’s quite experimental, I’d diversify my holdings. The two stocks I’d buy are ITM Power and AFC Energy

AFC produces alkaline fuel cells that consume hydrogen and pure oxygen to produce water, heat, and electricity. By comparison, ITM manufactures electrolyser equipment that can use renewable power to produce hydrogen from water. 

ITM is the more advanced of the two firms. Its technology is already being used by Shell to produce hydrogen at the oil major’s fuel stations. AFC is scaling up the production of its new H-Power systems, and we should see further progress on this front throughout the rest of the year. 

Both ITM and AFC are exciting renewable energy stocks, but their technology is still relatively new. Therefore, they’re speculative investments and may not be suitable for all investors. Nevertheless, I’m excited about their prospects and I’d buy both today. 

Should you invest £1,000 in BP right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if BP made the list?

See the 6 stocks

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Modern apartments on both side of river Irwell passing through Manchester city centre, UK.
Investing Articles

3 UK shares I’d consider owning for decades

This trio of UK shares are all ones our writer would like to own for the long haul. He only…

Read more »

Rolls-Royce's Pearl 10X engine series
Investing Articles

Yet another all-time high for the Rolls-Royce share price! Does it make sense for me to invest now?

Our writer understands why the Rolls-Royce share price has soared -- and recognises the potential to go higher still. So…

Read more »

UK financial background: share prices and stock graph overlaid on an image of the Union Jack
Investing Articles

5 British stocks Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Middle-aged Caucasian woman deep in thought while looking out of the window
Investing Articles

Is it too late to start investing at 40? Or maybe even 50?

Christopher Ruane explains the impact time can have on investment returns -- and why he thinks it's never too late…

Read more »

Santa Clara offices of NVIDIA
Investing Articles

Will Nvidia stock hit $100 or $200 first?

Christopher Ruane reckons there's a credible case for Nvidia stock to fall to $100, or soar to $200. So is…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

Should I put Greggs shares in my Stocks and Shares ISA?

Our writer considers whether there’s room in his Stocks and Shares ISA for the baker best known for its pies…

Read more »

Mother At Home Getting Son Wearing Uniform Ready For First Day Of School
Investing Articles

I’ve just earned £1,104 of passive income in 2 weeks, thanks to blue-chip UK dividend shares

Harvey Jones is building up his retirement savings one FTSE 100 dividend at a time. He's reinvesting every penny of…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

After 48 years, I think Warren Buffett’s 4 ‘rules’ are still relevant

Nearly 50 years ago, Warren Buffett listed four criteria that he used when assessing stocks. Our writer explains how he…

Read more »