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In 2024, a first in US history, solar and wind provided the US with more energy than coal. The two clean energy sources contributed 17% of America’s power mix, while coal contributed 15%. This trend is not likely to be reversed as the US continues to build more clean energy infrastructure.
Spurred by climate objectives, technological innovation, and government incentives, the green energy market is gaining robust traction. From solar panels and wind farms to electric car charging, clean energy is transforming the way America fuels its future.
In this article, we will discuss US clean energy investments, identify top green energy investment opportunities, and review the challenges in US green energy market.
US Green Energy Market Landscape
As of 2024, solar, wind, and hydro accounted for nearly 22% of the total US electricity generation. The US Energy Information Administration (EIA) expects this could increase to 24% in 2025. A decade ago, it was just 12%.
Solar
The US administration expects most of the growth in the renewable energy sector will happen in the solar segment, because of the government policies. President Trump, on his inaugural day, signed executive orders restricting onshore and offshore wind energy developments.
In the last 10 years, the growth of solar has been spectacular. The country has 248 GW of solar capacity installed, powering up to 41 million homes. In the last decade, the average annual growth rate of solar deployments was 28%.
A report from S&P Global Market Intelligence mentions solar power is expected to lead capacity addition in 2025. Despite the slowdown, 63 GW of solar deployment is planned for 2025. This is around 51.7% of the total renewable energy capacity addition planned for this year.
Wind
Politics aside, wind has seen spectacular growth in the last two decades. Since 2010, wind energy capacity has more than tripled from 47 GW to 147.5 GW.
However, for the first time since the mid-1990s, wind generation has declined in 2023, despite the capacity addition of 6.2 GW. In 2023, the average utilization fell to an eight-year low of 33.5%, compared to 35.9% (all-time high). The decline in generation may indicate saturating market conditions after decades of rapid growth. But, decline is not uniform across the country and varies regionally, depending on the wind conditions.
Battery Storage
Battery storage is the backbone of renewable reliability. According to S&P Global Market Intelligence, the total operating battery storage in the US reached 17.3 GW in 2023, up from 7.3 GW in 2022.
In 2024, an additional 11.3 GW of storage was installed across all sectors, marking a 33.3% year-on-year increase. And, in 2025, the capacity addition of 18.2 GW of utility-scale battery storage is planned to be added to the grid.
Why Consider Investments in Green Energy?
The transition from fossil-based power sources to renewable energy has created a lot of investment opportunities. Despite the rapid growth, the green energy sector still offers a lot of investment opportunities. How? Let’s look at them one by one.
Secular Growth Potential
In 2023, global clean energy investments crossed $1.8 trillion, with the US capturing the lion’s share. Closely following the investment trends in the global energy segment, the balance is tilted towards green energy.
Since 2019, investments in green energy have surpassed investments in fossil fuels by a big margin. In fact, in 2023, for every dollar invested in fossil fuels, $1.8 is going to clean energy.
According to the Bloomberg NEF Report, global investments in energy transition exceeded $2 trillion in 2024, of which the US accounted for $338 billion in investments.
Source: IEA
Private investments in the green energy segment witnessed strong growth. In full year 2024, global PE investments in renewables surged to $25.9 billion, marking a year-on-year increase of 64%. While, deals in fossil fuels rose to $15.3 billion.
Government Policy Tailwinds
Tailwinds from favorable government policy are also helping the green energy sector. The President’s Inflation Reduction Act (IRA), passed in 2022, provided a big boost to the clean energy sector in the US.
The IRA provided $500 billion in new spending and tax breaks to boost clean energy, reduce healthcare spending, and increase tax revenues. As per the act, IRA would provide $400 billion in new funding towards clean energy in an attempt to lower carbon emissions by 2030. The IRA was designed to accelerate the decarbonization plans.
Another important legislation signed was the Infrastructure Investment and Jobs Act (IIJA), which came into effect in 2021. The act allocated $1.2 trillion, including more than $500 billion in new funding across each of the 18 categories of infrastructure. It earned $65 billion to modernize power infrastructure, $7.5 billion for building EV charging infrastructure, and $3 billion for battery manufacturing.
Rising ESG and Institutional Demand
Environmental, Social, and Governance (ESG) are the key considerations for institutional capital allocation. From pension funds to sovereign wealth funds, they are under increasing pressure from stakeholders to decarbonize their portfolios to meet climate-aligned targets.
Despite the macro challenge, Global ESG assets are predicted to hit $40 trillion by 2030. It has already surpassed $30 trillion in 2022, according to Bloomberg Intelligence.
Large institutional investors like BlackRock, the Norwegian pension fund, and CalPERS have publicly committed to net-zero investment strategies.
Top US Renewable Energy Stocks
As the green energy ecosystem matures and evolves, there are certain companies that are emerging as leaders across various verticals of green energy. These companies are backed by strong fundamentals, favorable policy tailwinds, and long-term growth visibility. Let’s look at the green energy investment opportunities.
Solar Energy Stocks USA
Solar energy remains the fastest-growing green energy segment, thanks to its falling costs, rooftop adoption, and utility-scale installation. Some of the listed solar energy stocks in the US are:
First Solar (FSLR): The company specializes in utility-scale solar panel manufacturing and is known for its thin-film solar modules. First Solar is a direct beneficiary of the IRA’s domestic manufacturing policy.
Sunrun (RUN): It is the biggest provider of photovoltaic systems and battery energy storage in the US. The company primarily caters to residential customers.
Enphase Energy (ENPH): The company is primarily engaged in the manufacturing of solar micro-inverters, battery storage solutions, and the setting up of EV charging stations for residential customers.
Wind Energy Stocks USA
Wind energy has been a major contributor to utility-based renewable capacity across Texas, the Midwest, and offshore regions. Some of the listed companies involved in the wind energy business are:
NextEra Energy (NEE): The company is the world’s largest generator of renewable energy from wind and sun. It has over 119 wind energy projects in the US and Canada. NextEra is also into battery storage solutions and nuclear energy.
GE Vernova (GEV): GE Vernova is a major energy company that was spun off from General Electric in 2014. The company is the world’s largest manufacturer of wind turbines and is also into hydro, nuclear, and gas power.
Battery Storage Stocks in the US
Battery storage is the fastest-growing green energy vertical. It is critical in solving the intermittency of wind and solar energy. Some of the listed battery companies in the US include:
Tesla (TSLA): Tesla is more than an EV player. Its battery storage vertical has become a major growth driver for the company. Its battery storage deployments have jumped from 14.7 GWh in 2023 to 31.4 GWh in 2024.
Fluence Energy (FLNC): Fluence Energy is a joint venture between Siemens and AES Corporation. It is a global leader in the development and manufacture of energy storage products and services and cloud-based software for renewables and storage assets.
Stem Inc. (STEM): Stem was founded in 2009 through a SPAC deal valued at $1.35 billion. It is a global leader in AI-enabled software and services that allow its customers to plan, deploy, and operate clean energy assets.
Renewable Energy ETFs USA
For investors seeking diversified exposure in US renewable energy stocks, renewable energy ETFs offer an efficient and cost-effective choice. These ETFs or funds hold stocks of renewable energy companies across verticals. Some of the widely followed renewable energy ETFs are:
- iShares Global Clean Energy ETF (ICLN)
- Invesco Solar ETF (TAN)
- Invesco Global Clean Energy ETF (PBD)
- First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN)
- SPDR S&P Kensho Clean Power ETF (CNRG)
Key Risks and Challenges
Policy Uncertainty: One of the biggest hurdles in the growth of the renewable energy sector is the policy uncertainty. Changes in government priorities also impact the sector. For instance, Trump’s second term as President has been marked by a clear preference for fossil fuels over renewables. Any potential policy changes around IRA and IIJA can dampen sector growth momentum.
Technology Bottleneck: Despite advancements in green energy technologies, there are a few limitations. Solar and wind energy are intermittent, meaning their generation depends on favorable weather conditions. This makes energy storage essential for grid stability. While battery costs have declined, large-scale storage solutions are still not cost-competitive.
Hydrogen, as a green source of energy, remains expensive and is in the early stages of adoption.
Global Competition: The global green energy race is intensifying, with China controlling a major part of the supply chain for solar panels, rare earth minerals, and Li-ion batteries. US companies may face lower profit margins due to cheaper imports from Asia.
While the IRA was meant to address the supply chain bottlenecks, reorganizing the supply chain takes time. Trade dynamics between countries will continue to impact the green energy segment.
Market Volatility: Best US green energy stocks often trade like high-growth technology stocks. Many are not profitable and reinvest their entire cash flow into their expansion. This leads to a distortion in valuation, resulting in increased interest rate sensitivity and impact on investor sentiment.
For instance, during the rate cut cycle, all future cash flows become less attractive, leading to compressed valuations. This hurts smaller and unprofitable companies. Moreover, the clean energy sector is driven by government incentives and regulatory developments.
Conclusion
Clean energy stocks USA offer a unique blend of opportunity and risk. Strong tailwinds from regulation, innovation, and strong ESG sentiment continue to make the sector attractive. If you are looking to invest in US green energy stocks, check out the valuation risk, policy uncertainty, and global competition. A diversified, well-researched approach, whether through individual stocks or ETFs, can help capitalize on this generational energy shift.
Disclaimer – This article draws from sources such as the Financial Times, Bloomberg,and other reputed media houses. Please note, this blog post is intended for general educational purposes only and does not serve as an offer, recommendation, or solicitation to buy or sell any securities. It may contain forward-looking statements, and actual outcomes can vary due to numerous factors. Past performance of any security does not guarantee future results.This blog is for informational purposes only. Neither the information contained herein, nor any opinion expressed, should be construed or deemed to be construed as solicitation or as offering advice for the purposes of the purchase or sale of any security, investment, or derivatives.The information and opinions contained in the report were considered by VF Securities, Inc.to be valid when published. Any person placing reliance on the blog does so entirely at his or her own risk, and does not accept any liability as a result.Securities markets may be subject to rapid and unexpected price movements, and past performance is not necessarily an indication of future performance. Investors must undertake independent analysis with their own legal, tax, and financial advisors and reach their own conclusions regarding investment in securities markets.Past performance is not a guarantee of future results.
