On November 11, the Financial Times reported that the U.S. clean energy industry faces a significant setback following Donald Trump’s election victory. The article highlights that several developers have halted projects, and investors are selling shares due to uncertainties about policy direction and federal funding under the incoming Trump administration. According to Mike Carr, president of Solar Energy Manufacturers for America, approximately half a dozen clean energy projects are awaiting policy certainty before proceeding.
Trump’s election, combined with the prospect of a Republican-controlled Congress, has led to a sharp decline in renewable energy stocks. The iShares Global Clean Energy ETF dropped 7% after the election. Additionally, short sellers of renewable energy stocks reportedly profited over $1 billion in the aftermath.
Despite the turbulence, some industry leaders and analysts remain cautiously optimistic, suggesting that the economic case for renewable projects could persist under a Trump administration. They also believe that existing tax credits for power generation and manufacturing may remain intact. However, they warn that sectors such as offshore wind and electric vehicles may face significant challenges. Trump has pledged to repeal the Inflation Reduction Act, a major driver of U.S. clean energy investment, and vowed to expand oil and gas production while halting offshore wind projects and EV mandates.
Biden’s target to reduce emissions by 50-52% from 2005 levels by 2030 is at risk under a second Trump term. Such a shift could result in an additional 500 million tonnes of carbon emissions in the energy sector by the end of the decade.
US Renewable Energy Sector Continues to Grow, Despite Challenges
While uncertainties loom over the renewable energy sector, the industry continues to demonstrate resilience. According to a report by Rhodium Group, a New York-based research institute, the renewable energy and transportation investment in the United States has continued to break records, reaching a new high of $71 billion in the third quarter of 2024. This marks a 12% increase from the same period in 2023 and a nearly unbroken quarter-on-quarter growth trend over the past three years.
The report highlights that renewable investment accounted for 5% of total US private investment in structures, equipment, and durable consumer goods, up from 4.5% in the third quarter of 2023. Retail investment was a major driver of this growth, increasing by 9% relative to the previous quarter, largely due to a surge in zero-emission vehicle (ZEV) sales. However, investment in renewable technology manufacturing remained flat quarter-on-quarter, while investment in deploying technology to decarbonize energy and industrial production slipped 7% quarter-on-quarter.
The report also assessed the progress of the US renewable electricity transition and found that the current pace of capacity expansion is falling short of what is needed to deliver a 40% reduction in net GHG emissions below 2005 levels by 2030. The analysis of projects in the pipeline suggests that both solar and wind are underperforming, aligning more closely with a scenario that would yield only a 30% reduction by 2030.
Despite the challenges and uncertainties facing the renewable energy sector, the industry’s resilience and potential for growth remain evident. With that in context, let’s take a look at the 10 best renewable energy penny stocks to invest in.
Our Methodology
To compile our list of the 10 best renewable energy penny stocks to invest in, we used clean energy ETFs plus online rankings to compile an initial list of 25 renewable energy stocks trading below $5 as of November 22. From that list, we narrowed our choices to 10 stocks according to their hedge fund sentiment, which was taken from the database of 900 elite hedge funds as of Q3 of 2024. The list is sorted in ascending order of their hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Renewable Energy Penny Stocks to Invest In
10. Gevo, Inc. (NASDAQ:GEVO)
Number of Hedge Fund Holders: 7
Stock Price as of November 22: $1.39
Gevo, Inc. (NASDAQ:GEVO) is a company focused on developing and selling renewable fuels, including gasoline, jet fuel, and diesel. The company places a significant emphasis on sustainable aviation fuel (SAF) and is exploring commercial opportunities in renewable natural gas (RNG), hydrocarbons for gasoline and diesel fuel, and other sustainable chemicals and materials like polyester. Gevo, Inc. (NASDAQ:GEVO) also holds intellectual property aimed at the large-scale deployment of net-zero hydrocarbon fuels and chemicals.
During the third quarter that ended on September 30, Gevo, Inc. (NASDAQ:GEVO) entered into a definitive agreement to acquire Red Trail Energy’s ethanol production, carbon capture, and sequestration assets, which is expected to make the company’s adjusted EBITDA positive in 2025. This acquisition, combined with the company’s existing renewable natural gas (RNG) business, Verity, and other initiatives, positions Gevo, Inc. (NASDAQ:GEVO) for significant growth and profitability.
Additionally, Gevo, Inc.’s (NASDAQ:GEVO) acquisition of CultivateAI is also aimed to enhance the company’s Verity platform and provide comprehensive, data-driven solutions for carbon abatement in food, feed, fuels, and industrial markets. This acquisition supports the company’s ability to identify and capitalize on emerging trends in the sustainability space.
9. Montauk Renewables, Inc. (NASDAQ:MNTK)
Number of Hedge Fund Holders: 8
Stock Price as of November 22: $4.43
Montauk Renewables, Inc. (NASDAQ:MNTK) is a leader in the renewable energy sector, specializing in converting waste into renewable energy. The company pioneered the landfill gas-to-energy industry, transforming biogas from landfills into renewable natural gas (RNG) and electricity. Montauk Renewables has expanded into the agricultural sector, focusing on anaerobic digestion (AD) technologies to convert waste from dairy and swine farms into RNG.
On November 12, Montauk Renewables, Inc. (NASDAQ:MNTK) announced its third quarter for the three months ended on September 30. Despite facing challenges from severe weather events, including Hurricane Beryl, which caused widespread power outages in the Houston, Texas region, the company’s revenues increased 18.4% to $65.9 million year over year. Whereas net income increased 31.8% to $17.0 million
Montauk Renewables, Inc. (NASDAQ:MNTK) produced 1.4 million MMBtu of RNG in the third quarter, flat compared to the same period last year. While the company’s Texas facilities were impacted by severe weather, the Pico facility’s expansion project helped to offset some of the lost production. The company also announced a pilot project to recover and convert biogas into green methanol, which has the potential to transform biogas from waste streams into carbon-negative fuel, further solidifying Montauk’s position as a leader in the renewable energy space.
8. OPAL Fuels Inc. (NASDAQ:OPAL)
Number of Hedge Fund Holders: 9
Stock Price as of November 22: $3.70
OPAL Fuels Inc. (NASDAQ:OPAL) is a prominent player in the renewable natural gas (RNG) industry, focusing on RNG as a sustainable fuel solution for heavy and medium-duty trucks. The company is the second-largest RNG station operator in the United States and is also involved in developing hydrogen fueling infrastructure.
On November 6, OPAL Fuels Inc. (NASDAQ:OPAL) announced that it has begun construction of a new renewable natural gas (RNG) production facility at the Kirby Canyon Landfill in Santa Clara County, California. The facility will utilize proven technology to capture biogas produced from the decomposition of organic materials at the landfill.
The biogas will then be converted into RNG, a low-carbon, low-cost transportation fuel. The facility is designed to produce approximately 660,000 MMBtus of RNG per year, which is equivalent to around 5.1 million gas gallons equivalent (GGE). This RNG will be distributed through the company’s fueling station network to power heavy-duty trucks that run on natural gas instead of diesel.
The demand for RNG is anticipated to rise as industries and governments commit to reducing carbon footprints. According to a report by Business Research Insights, the global RNG market was valued at $7.35 billion in 2024 and is projected to reach $148.7 billion by 2032, growing at a CAGR of 45.6%. As demand for renewable energy solutions rises, driven by government incentives such as the EPA’s and the Inflation Reduction Act’s (IRA) benefits, OPAL Fuels (NASDAQ:OPAL) is well-positioned to capitalize on these growth opportunities.
7. Altus Power, Inc. (NYSE:AMPS)
Number of Hedge Fund Holders: 9
Stock Price as of November 22: $4.06
Altus Power, Inc. (NYSE:AMPS) is a leading provider of community solar power solutions, specializing in utilizing underutilized rooftop spaces and commercial and industrial properties to generate solar electricity. The company delivers cost-effective solar power to residential customers through its Community Solar program and serves over 25,000 subscribers across the United States. This program allows customers to benefit from renewable energy savings without needing to install their own solar panels.
In the third quarter that ended on September 30, Altus Power, Inc. (NYSE:AMPS) revenue increased 30% to $58.7 million compared to $45.1 million in Q3 2023, driven by the growth of in portfolio and increased sales of renewable electricity to its customers. The company’s nationwide portfolio of operating assets surpassed 1 gigawatt. The company’s adjusted EBITDA also grew 27% year-over-year, driven by the growth of its portfolio, partially offset by increased operating and general and administrative expenses.
Altus Power, Inc. (NYSE:AMPS) announced the commissioning of three community solar photovoltaic (PV) parks in Maine with a combined capacity of 19.1 MW. The three new plants will generate electricity to meet the demand of more than 4,200 homes annually.
6. Plug Power Inc. (NASDAQ:PLUG)
Number of Hedge Fund Holders: 10
Stock Price as of November 22: $1.89
Plug Power (NASDAQ:PLUG) is a leader in renewable hydrogen production and fuel cell technology, offering an integrated product portfolio that includes electrolyzers, hydrogen fuel cells, and hydrogen infrastructure solutions. The company has established partnerships with key industry players, including Nikola Corporation.
On November 12, Plug Power Inc. (NASDAQ:PLUG) announced results for the third quarter ended on September 30. The company’s electrolyzer sales increased 285% quarter-over-quarter. This growth was driven by revenue from a large-scale order and the contribution from 5MW system sales. The company also announced a major order for 25 MW from BP and Iberdola’s joint venture at the Castellon refinery project in Spain.
In addition to the strong growth in electrolyzer sales, Plug Power Inc.’s (NASDAQ:PLUG) gross margin loss decreased by 37% quarter-over-quarter, driven by multiple revenue streams, including equipment, service, Power Purchase Agreements (PPA), and fuel.
Plug Power (NASDAQ:PLUG) also reported significant progress in its hydrogen production network. The company’s Joint Venture hydrogen plant with Olin Corporation in Louisiana is progressing, with liquid production expected to ramp up capacity during Q1 2025.
Plug Power (NASDAQ:PLUG) also completed the installation of an 8 MW hydrogen fuel cell system hybrid microgrid in California, which aims to reliable power during wildfires and emergencies. Additionally, the Company was awarded a $10 million DOE grant to lead the development of advanced hydrogen refueling stations in Washington State in Q3 2024.
5. Stem, Inc. (NYSE:STEM)
Number of Hedge Fund Holders: 13
Stock Price as of November 22: $0.36
Stem (NYSE:STEM) is a leader in the renewable energy sector, specializing in AI-enabled software for energy storage and sustainable energy solutions. The company’s flagship software, Athena, optimizes battery storage and renewable energy operations for businesses and utilities.
Athena, widely regarded as a market leader, leverages AI to forecast energy needs, optimize storage usage, and enhance energy management efficiency for clients. Stem, Inc. (NYSE:STEM) has also expanded its software portfolio with PowerTrack, a performance management tool designed to streamline the monitoring of solar and energy storage assets.
On October 1, Stem, Inc. (NYSE:STEM) announced a new software and services-centric strategy that focuses on four key priorities. First, the company is shifting to a software and services-centric business model to generate predictable, high-margin recurring revenue. Second, the company is expanding its energy consulting services by leveraging its technical expertise and market experience to build stronger customer relationships and create more reliable revenue streams. Third, Stem, Inc. (NYSE:STEM) is enhancing its AI-enabled software and edge device capabilities. The company plans to integrate PowerTrack and Athena, into a unified solution that spans asset management and optimization for solar, storage, and other technologies. Finally, the company is revising its approach to hardware resales. Rather than focusing on hardware procurement, Stem, Inc. (NYSE:STEM) will offer advisory services and only procure hardware under profitability criteria that align with its broader software and services strategy. These initiatives aim to deliver additional value to Stem, Inc.’s (NYSE:STEM) 16,000 existing customers while opening new opportunities with both new and existing clients.
4. TPI Composites, Inc. (NASDAQ:TPIC)
Number of Hedge Fund Holders: 13
Stock Price as of November 22: $1.95
TPI Composites (NASDAQ:TPIC) is a leading manufacturer of composite wind blades for the wind energy sector and a key player in industrial machinery development. The company maintains long-term relationships with major original equipment manufacturers (OEMs) in the wind industry and operates a global network of factories in the U.S., Mexico, Turkey, and India. Additionally, TPI Composites (NASDAQ:TPIC) has engineering centers in Denmark and Germany and training facilities in the U.S. and Spain.
On November 7, TPI Composites (NASDAQ:TPIC) reported financial results for the third quarter that ended September 30. The company’s net sales increased 2.8% to $380.8 million year over year, despite a 10% decrease in production. This growth was largely driven by 89% utilization of plants as the company made progress on starting up 10 lines with next-generation workhorse blades. TPI Composites (NASDAQ:TPIC) has also strategically divested from its Automotive business and shut down the underperforming Nordex Matamoros plant to eliminate losses.
According to Precedence Research, the global wind energy market, valued at $98.74 billion in 2024, is projected to grow to $260.81 billion by 2034 at a CAGR of 10.2%, TPI Composites (NASDAQ:TPIC) is well-positioned to benefit from this growth, with ten manufacturing lines currently in startup or transition phases expected to enhance production capacity.
3. Sunnova Energy International Inc. (NYSE:NOVA)
Number of Hedge Fund Holders: 22
Stock Price as of November 22: $4.37
Sunnova Energy International Inc. (NYSE:NOVA) is a leading provider of residential solar and energy storage services, playing a crucial role in the adoption of renewable energy solutions across the United States. The company offers flexible financing options for solar PV systems, with terms ranging from 20 to 25 years, catering to a broad customer base.
On October 30, Sunnova Energy International Inc. (NYSE:NOVA) released its financial results for the third quarter and the nine months ending September 30. The company’s core business of customer agreements and incentives demonstrated strong performance, with revenue growing by 43% to $121.5 million in the nine-month period compared to the previous year. This growth was fueled by a 38% increase in the number of solar energy systems in service, reaching 222,300 systems.
Sunnova Energy International Inc. (NYSE:NOVA) also reported an increase in average revenue per system, with Power Purchase Agreement (PPA) and lease revenue rising 12% to $1,405 per system. This improvement is attributed to slightly larger average system sizes and higher battery attachment rates, which climbed to 32% for the nine months ending September 30.
2. Clean Energy Fuels Corp. (NASDAQ:CLNE)
Number of Hedge Fund Holders: 22
Stock Price as of November 22: $2.71
Clean Energy Fuels Corp. (NASDAQ:CLNE) is a leading provider of natural gas as an alternative fuel for vehicle fleets. The company is the largest supplier and producer of renewable natural gas (RNG), that utilizes organic waste to produce RNG. Clean Energy Fuels Corp. (NASDAQ:CLNE) also supplies compressed natural gas (CNG), and liquefied natural gas (LNG) for medium and heavy-duty vehicles, along with operating fueling stations for public and private vehicle fleets.
On November 6, Clean Energy Fuels Corp. (NASDAQ:CLNE) announced its results for the third quarter ended on September 30. The company’s adjusted EBITDA surged to $21.3 million, a substantial 50% increase from $14.2 million in the same quarter last year. Additionally, revenue rose to $105 million, reflecting a 9% increase from $96 million in Q3 2023. A key driver of Clean Energy Fuels Corp.’s (NASDAQ:CLNE) success is its expanding fueling network. Over the past year, the company has grown its network by nearly 15%, including the addition of a new station for Amazon in New Jersey. This strategic expansion is expected to attract more customers and boost fuel volumes.
The launch of the Cummins X15N engine, a 15-liter natural gas engine built to match the performance and reliability of its diesel counterpart, is another catalyst for growth, with major fleets such as JB Hunt and UPS already providing positive feedback. In addition, Clean Energy Fuels Corp.’s (NASDAQ:CLNE) partnership with Tourmaline in Canada continues to gain momentum, with new stations opening and plans for a natural gas fueling corridor that further strengthens its presence in the Canadian market.
1. Shoals Technologies Group, Inc. (NASDAQ:SHLS)
Number of Hedge Fund Holders: 27
Stock Price as of November 22: $4.40
Shoals Technologies (NASDAQ:SHLS) is a prominent player in the solar energy and electric vehicle industries. The company has successfully deployed its products across over 62 GW of solar systems globally and holds an impressive portfolio of more than 66 patents. Shoals Technologies is widely recognized for its cutting-edge electrical balance of systems (EBOS) solutions, which have established a new standard in the industry.
On November 12, Shoals Technologies’ (NASDAQ:SHLS) reported results for the third quarter ended September 30. The company experienced a year-over-year revenue decline of 24%, due to project delays. However, the company’s net loss was recorded at $300,000 compared to $9.8 million during the prior-year period, which indicates a potential recovery trend. The company’s gross profit percentage came at 24.8% compared to 10.5% in the prior-year period. This increase in gross profit percentage was primarily due to the decrease in wire insulation shrinkback expenses. As of September 30, Shoals Technologies’ (NASDAQ:SHLS) has a backlog and awarded orders totaling $596.6 million.
Shoals Technologies (NASDAQ:SHLS) has introduced a variety of innovative products designed to optimize solar and electric vehicle (EV) installations. The company’s revolutionary Big Lead Assembly (BLA) System transformed the solar installation technology by integrating multiple components into a single unit, which cuts installation costs by 43% and material costs by 20%.
Furthermore, Shoals Technologies’ (NASDAQ:SHLS) Interconnect System streamlines the process of connecting solar panels to the grid, reducing reliance on specialized labor and increasing efficiency. The company’s patented connectors and wire harnesses with in-line fuses also provide a cost-effective solution for solar installations.
While we acknowledge the potential of Shoals Technologies (NASDAQ:SHLS) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SHLS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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