This article was produced 2 April 2025. 

Key takeaways: 

• Decarbonisation efforts are the fundamental driver supporting growth outlooks for renewables investments. 

• In terms of exposure, renewables producers are a natural starting point for consideration, but indirect exposure may also be sought via equipment manufacturers and critical input suppliers further along the supply chain. 

• A wide range of renewables ETFs trade on the ASX and US share markets, offering diversified exposure to this investment thematic. 

• Past performance and trends are not an indicator of future performance or trends. 

• It is important to do your own research before making decisions to invest. 

Amid the transition to renewables — underpinned by carbon emissions targets like net zero — an increasing number of investors are looking for investment opportunities that align with this societal shift. This segment, while still relatively modest to date, is expected to continue growing as the energy transition gathers momentum. 

Not only are governments around the world investing substantial money into infrastructure to support the transition, but in the process, they are also setting policy and incentives to garner broader buy-in from the population and corporations — ranging from tax credits to subsidies, amongst other measures.  

As a result, companies across a range of industry segments are also investing heavily in this space. Whether it be with the intention to futureproof operations, take a leadership position around renewables, or address ESG concerns, there is a greater emphasis on renewables across the business world than at any other time through history. 

With a strong long-term growth outlook for renewables, investment opportunities range from the likes of renewables producers, equipment manufacturers including critical input suppliers, as well as thematic ETFs. 

Renewables Producers 

Central to the transition to net zero are renewables, which firmly puts the spotlight on investment opportunities related to alternative energy producers across the likes of wind, solar, hydro energy and even bioenergy. 

Operators across these segments generate power from renewable sources, thereby providing direct exposure to the companies that are expected to help bridge the gap as far as energy supply.  What’s more, many countries, including Australia, are likely to require a diverse assortment of energy formats to build a dependable, efficient and cost-effective energy grid. 

There are various ASX-listed names focused on renewable energy generation. This includes traditional utilities firms such as AGL Energy (ASX: AGL), Origin Energy (ASX: ORG), APA Group (ASX: APA), each of which have pivoted their operations to repurpose some of their assets to serve renewables, while also boosting the overall capacity of their renewables portfolios.  

ASX opportunities also extend to pure-play renewables suppliers like Meridian Energy (ASX: MEZ) and Mercury NZ (ASX: MCY), which generate 100% of their energy supply from renewables assets. 

The US is also home to several renewables producers, with the largest being NextEra Energy (NYSE: NEE), but other high-profile names include but are not limited to Brookfield Renewable (NYSE: BEP), and Clearway Energy (NYSE: CWEN). 

Equipment Manufacturers and Critical Input Suppliers 

An alternative area for investment in the renewables space relates to the companies that are either manufacturing equipment, supplying key inputs, or providing services to support the distribution of renewable energy. 

Often, this encompasses companies further down the supply chain, which have an indirect role to play as far as advancing the roll-out and uptake of renewables. 

For example, it includes stocks that focus on battery storage technology like Novonix (ASX: NVX) and EnerSys (NYSE: ENS). It also covers critical minerals suppliers such as Pilbara Minerals (ASX: PLS), Sociedad Quimica Y Minera de Chile SA (NYSE: SQM), Albemarle (NYSE: ALB), and Nickel Industries (ASX: NIC). Each of these companies provide integral raw materials like lithium, nickel and cobalt that support battery solutions storing renewable energy in the grid. 

A more niche area for investment exposure centres on companies involved in the manufacturing process of wind turbines and solar panels, or even the installation and servicing of said equipment. In the US, this includes GE Vernova (NYSE: GEV), Sunrun (NASDAQ: RUN), First Solar (NASDAQ: FSLR), and  JinkoSolar Holding (NYSE: JKS), to name just a few players. 

Renewable Energy ETFs 

Such has been the growth in the renewables investment thematic, there are now many exchange-traded funds (ETFs) that specifically focus on this theme. 

The benefit of opting for an ETF to gain exposure to renewable energy is that it provides instant diversification by virtue of its many underlying holdings. 

In contrast, direct investments in these categories, be it renewables producers or companies further along the supply chain, involve greater risk. This is especially the case since this area of the market is still relatively young, with growth prospects dependent on a variety of long-term factors. 

There are US-listed ETFs that provide exposure to renewables, including the iShares Global Clean Energy ETF (NASDAQ: ICLN) and the Invesco Solar ETF (NYSE: TAN). 

Investors with a preference for the local share market will also find that the ASX is home to several popular ETFs that offer exposure to renewables.  

For example, the Global X Battery Tech & Lithium ETF (ASX: ACDC) focuses on companies involved in battery technology and sourcing lithium. On the other hand, the VanEck Global Clean Energy ETF (ASX: CLNE) and the Betashares Climate Change Innovation ETF (ASX: ERTH) focus on businesses with operations that relate to decarbonisation or developing clean energy technology. 

Investing in Renewable Energy 

While the renewables investment thematic might still be in its infancy, the long-term growth profile for decarbonisation and net zero are fundamental drivers in this space. 

Investors have an abundance of opportunities available for consideration if seeking exposure to this growing theme.  

From individual companies involved in producing renewables like wind, solar and hydro, to other companies further along the supply chain that supply critical minerals or manufacture and service the equipment used to generate renewable energy, global markets are now home to a wide range of renewables investments. 

There are also many ETFs, both at home and abroad, that offer targeted exposure to a diversified basket of renewables firms, thereby reducing the risk that comes with investing in a single company, particularly where a holding might be exposed to regulatory or policy risk in certain jurisdictions.