The Green Revolution: Best Indian Renewable Stocks13-min read

Prateek Arora

Prateek Arora |  Updated on 20/9/2023

Renewable Energy Stocks: High Returns for a Better Tomorrow

The drive for the most profitable green energy stocks in India is on the rise as a new era of eco-friendly energy gains traction among investors. In 2022, the renewable energy sector in India experienced an unprecedented year-on-year growth rate of 9.83%, marking a significant 24-fold increase over the past 9 years. As a result, retail investors are actively seeking out the best green energy stocks in India to capitalize on this promising market trend.

Investing in renewable energy stocks in India offers a dual benefit. Firstly, it fosters the growth of alternative energy products, which translates into a better economy for all. Secondly, India’s increasing preference for clean and sustainable energy sources is opening up new investment opportunities for individuals, enabling them to increase their wealth.

However, it’s important to note that “best green energy stocks in India” is more than just a catchphrase. Investors need to conduct thorough research to identify the most suitable investment options. This guide aims to assist readers in locating valuable stocks in this sector, outlining the best methods for discovering the top green energy stocks in India, the leading brokerage firms in the market, the current top-performing stocks, the investment process, the risks involved, and strategies to mitigate those risks.

 

Best Stock Brokerages for Indian Stocks in April 2024

Since the best renewable energy stocks in India have basically become vogue, many of India’s leading brokerage firms have started to provide them to their clients. While that’s enticing for every discerning trader, note that not every brokerage firm has the same quality or capability to cater to their client base. Some offer high value but have a painfully difficult user interface, and others have a great UI but don’t offer potentially great stock options in the market. When investing in the best energy stocks in India, one must keep in mind an “all or nothing” mentality for the quality of their chosen broker – which brings us to the top stock brokerages in India that offer the best options in all regards.

Admiral Markets Review

Admiral Markets Review

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Pros

  • list bullet Over 40,000 active clients from 110+ countries, carrying out an average of 1.5 million trades per year.
  • list bullet Competitive spreads as low as 0.5 pips and up to 500:1 leverage for forex trading.
  • list bullet Provides access to over 8,000 trading instruments, including 40+ forex pairs, 200+ stocks, and 5+ cryptocurrencies.

Cons

  • list bullet Admiral Markets has relatively high minimum deposit requirements for some account types, such as those in GBP.
  • list bullet Some users have reported slow response times from customer support, during excessively busy periods.
Libertex Review

Libertex Review

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Pros

  • list bullet 0% fees on stock trades, minimum deposit of only $10 or equivalent
  • list bullet Over 322 tradable assets available
  • list bullet Unmatched user-friendly interface, easy for beginners to catch on

Cons

  • list bullet Unavailable in some countries, including the United States
  • list bullet Only features two types of accounts (Demo and Standard)

Admiral Markets

For those looking for reliability and security while using a great user interface that pays attention to all the little nuances that can make or break a user’s trading experience, Admiral Markets have a lot to offer.

What makes Admiral Markets our top pick for the firm that offers the best renewable energy stocks in India is its recent rebranding. The brokerage firm has recently made a sustainable company commitment to ESG in its overall business model. Part of that is introducing a new model to curb the carbon footprint of the firm, and the other part is introducing the best green energy stocks in India for traders to invest in.

Authorized and regulated by JSC, Admiral Market (shortened to Admirals) puts most of its efforts into securing the platform. The platform is financially secure, and all the accounts have been segregated with leading banks. To ensure that all trades are happening within the compliance constraints, it is also externally audited.

Multiple trading options are available here, from stocks and ETFs to fractional shares. Luckily for our eco-friendly investors, the renewable energy stock catalog is also quite large. Interestingly, on its official blog, the platform highlights two specific renewable energy stocks – Brookfield Renewable and SolarEdge Technologies.

Those who want to understand the different stock options available on the platform can also look into Admiral Market’s different blogs. They act as great educational resources that cover everything from the different nuances of the platform to specific stock options that are updated daily.

Admiral Markets employs a nuanced commission model that varies depending on the type of account, whether Zero.MT4, Zero.MT5, Trade.MT5 or Invest.MT5. The commission rate is determined by the size of the lot and the currency utilized. The calculation of the commission rate is based on a unique formula that takes into account the open price, contract size, commission rate, and trade slides. However, according to the official website, there are specific stocks and stock CFDs for which the platform does not require any commission fees. Nonetheless, Admirals have imposed certain conditions on this commission-free offer. For instance, in the case of Trade.MT4 accounts, this commission waiver is only applicable to European markets.

Withdrawal happens on the same business day if the withdrawal request reaches the team before 18:00.

Apart from the aforementioned features, Admiral Markets also provides insurance coverage for 99% of its trading clients. The insurance policy excludes only those entities that are classified as larger than a certain definition of “small businesses” and certain governmental institutions.

Libertex

Another one of the leading platforms hosting a curated portfolio of the best green energy stocks in India is Libertex. However, the only issue with this platform is that the original variant – Libertex.com – is not available for people outside European countries.

Thankfully, the alternative, which is Libertex.org, is also a great platform for trading the best energy stocks in India.

Libertex is also offering an ultimate set right now, which is a set of offers for new traders, including free stocks of up to $200, free $10 worth of crypto, a Gold status for the first month, and access to educational resources and investment ideas.

Libertex has a huge catalog of energy stocks to choose from, which includes Devon Energy, Brookfield Renewable Conoco Philips, Exxon Mobil Corp, and more.

Libertex also offers a great demo account for those looking for paper trading and wanting to try out the platform before getting started using real money. The platform is also heavy on educational resources, which is a great plus for those who want to know about the platform’s intricacies or want to learn about the best solar energy stocks in India that the platform is partial to.

Libertex has a simple UI providing all the charting tools traders need to make a better investment decision. When it comes to fees, a zero-commission approach has been applied across many CFDs. That said, for assets that include a commission – including green energy stocks – the commission rate varies from asset to asset. That said, the commission on stocks ranges between 0.1% to 0.2%.

Withdrawal requests are generally processed in a single day. However, SEPA payments can take up to 5 business days.

When it comes to the user interface, Libertex has taken a rather simpler approach. That focus on simplicity is more pronounced in Libertex.org, the website that our experts could access. Simplicity ensures that most traders are able to leverage the platforms to trade the best energy stocks in India.

Why Invest in Indian Renewable Energy Stocks

The increasing population and a renewed focus on technology and sustainability have resulted in a remarkable surge in the value of green energy stocks in India. The renewable energy sector in India has experienced exponential growth, with a 396% increase in capacity over the past 8.5 years. In 2022, India witnessed an unprecedented growth rate of 9.83% in renewable energy additions, which highlights the effectiveness of energy stocks in India. This has led to a surge in interest among retail investors, who are actively seeking out investment opportunities in this sector. As more options become available, the value of these stocks is likely to continue its upward trend.

Currently, the most popular sources of energy in India are:

Solar

Over the past decade, India has made great strides in adopting solar energy. According to statistics, the country’s solar energy capacity has increased from 6.76 GigaWatts to an impressive 54 GigaWatts in 2022. The Ministry of New and Renewable Energy has reported that India now ranks 4th in the world for solar photovoltaic deployment, with an installed capacity of 61.97 Gigawatts as of Q4 2022.

Wind

India’s renewed focus on renewable energy is not limited to just solar power – the country is also looking to tap into the potential of wind power. As of 2018-19, India’s power generation capacity was 62.03 TWh, with wind power contributing to 10% of that total.

According to the Ministry of New and Renewable Energy, India has the potential to significantly increase its wind generation capacity by utilizing the 7,600 km of coastline along the country’s borders. With this untapped potential, India could become a major player in the wind energy sector, further reducing the country’s reliance on non-renewable sources of energy.

Hydro

According to the Ministry of Power, hydropower currently accounts for 11.4% of India’s total energy generation. With the country’s increasing focus on renewable energy, there is a growing expectation for the number of hydropower stations to increase in the coming years.

This trend towards hydropower is driven by the many benefits that it offers. Hydropower is a clean and renewable energy source that produces no harmful emissions, making it an environmentally friendly option. Additionally, hydropower stations can be built in a range of sizes, from large-scale installations to smaller, decentralized facilities, making it a versatile option for meeting India’s energy needs.

Biomass

Biomass is a vital part of India’s renewable energy sector, with 70% of the country’s population depending on it. The Ministry of New and Renewable Energy has recognized its importance and is implementing new biomass power and co-generation programs to promote its growth further. Recent studies show that there is a surplus availability of 28 GW worth of biomass energy in India, indicating significant potential for the development of more biomass plants in the future. With the Ministry’s ongoing efforts and the surplus availability of biomass, it’s no surprise that biomass is set to play a critical role in India’s sustainable energy future.

investing in renewable energy stocks in India for a better future

How to Choose the Best Indian Renewable Energy Stocks

The emergence of renewable energy stocks has created a new type of bullish movement in the market. However, such renewable energy stocks are not made equal. Some are too volatile, others are too low-growth for beginners, and only a few might be the right fit for your specific investing strategy.

The following are the main criteria on which a potential investor needs to focus on before making a purchase in a particular stock:

Company’s financial performance

The first factor to consider is the financial performance of a company. You can do this by analysing the company’s financial statements, which you can find on the Ministry of Corporate Affair’s online portal. The indicators that are best fit to help you decide whether a company’s stocks are worthy or not are price-to-earnings ratio and earnings-per-share.

With the price-to-earnings ratio, you can decide whether a company’s stock is overvalued or undervalued. Overvalue signals a major correction, or value drop, in the price charts. Under evaluation is a great long-term investment as it can hint at a parabolic increase.

Earnings-per-share will help you determine the profitability of a company, which would determine the profit you can generate through your share.

Industry trends

It is important to know that the industry trends change over time. One type of green energy stock performs better one season, and at other times, you will find the performance facing a downturn. Therefore, always keep up with the trends by staying updated with the financial news.

Market Conditions

Rising inflation prompts the arrival of a bear season, increasing the supply of certain energy stocks and diminishing their price. Therefore, pay close attention to the market conditions when you are looking for the best green energy solutions in India.

Top Indian Renewable Energy Stocks for Retail Investors

Here is the list of the best renewable energy stocks in India based on their past financial performance and potential upsides.

Tata Power Solar

Part of the Tata Group, Tata Power Solar is the best solar power energy stock in the country. With the capacity of generating 3.9 Gigawatt of clean energy, it aims to cover 80% of the total energy sector in India.

The stock has witnessed a bullish performance since its linear increase in 2020. While the current price is at an accumulation stage, the brand power of Tata makes it a safe bet for all types of investors.

Suzlon Energy

As one of India’s leading renewable energy companies, Suzlon Energy is mostly focused on manufacturing wind turbine generators. The company’s revenue in 2022 was 843 million USD. While the share price performance has been quite low for this stock, the current value presents a buying opportunity since this project has major upsides in the long term.

Indian woman in a futuristic setting

Renew Power

The third best stock is an independent power producer of renewable energy. The commissioned capacity of this stock stands at 7.7 Gigawatt. While the recent changes have created major retraces in its price chart, it is s a suitable investment that is looking to buy the dip.

How to Invest in Indian Renewable Energy Stocks Online

Here are the steps to take to invest in the best green energy stocks in India.

Step 1: Start an Invest.MT5 account with Admirals

The first step is to create an Invest.MT5 account. The process involved entering the standard account details and account verification information – which generally includes the applicant’s photo ID.

Step 2: Go to the Trader’s Room

Once you have created the account, you need to go to the Trader’s Room. You will only get access to this Room after you have submitted all your identification details. That said, we suggest trying out the demos account first before getting started.

choosing the right renewable energy stocks in India using Admiral Markets

Step 3 – Click on the Invest button on the left side of the screen

Since you won’t see an “Invest” button, click on the folder icon with a golden dollar symbol on it. It is known as the “Symbols” button. It will open a prompt similar to an old Windows excels doc. Here, select the token you want to invest in.

Step 4 – Access the price chart

Selecting the energy stock will show you a price chart. It will be a candle chart that you must access before trading.

price chart on Admiral Markets for renewable energy stocks in India

Step 5 – Pick the Buying Method

Once done, click on the top left of the chart. Here are two icons available there. The right one will help you buy or sell directly. While the left one will give you better information before committing to selling. Click on Buy or Sell by Market.

buying renewable energy stocks in India using Admiral Markets

Step 6: Select the Order Type

In this window, you can set the volume, buy limit, sell limit, stop limit, buy stop limit, and sell stop limit. You can then select the order type as Market execution at the top of the window to complete the order.

setting order limit on energy stocks in India using Admiral Markets

Risks and Challenges of Investing in Indian Renewable Energy Stocks

Investing in even the best solar energy stocks in India isn’t without its challenges. Here is a list of some of them that you must be privy to before proceeding.

Regulatory changes

The surge in demand for green energy stocks in India has also attracted several unscrupulous players into the market. Some of these players resort to using inferior quality materials and misleading marketing strategies to artificially inflate stock prices. To curb such malpractices, the government has implemented several regulatory changes. However, as the market for clean energy continues to evolve, one can expect the government to take further measures to regulate the industry. If such measures are perceived as regressive, it could lead to a significant decline in the stock prices.

Geopolitical risks

The rising demand for raw materials like lithium, cobalt, and rare earth metals used in the production of renewable energy products like batteries, solar panels, and wind turbines has raised concerns over their supply chain and geopolitical implications.

For instance, most of the world’s lithium reserves are located in the “Lithium Triangle” of Bolivia, Argentina, and Chile, and China produces nearly 80% of the world’s rare earth metals. This concentration of resources in a few countries can lead to geopolitical tensions and trade disputes.

Moreover, conflicts and wars can disrupt the supply chain of these materials, as seen in the Russia-Ukraine conflict that led to the disruption of natural gas supplies to Europe. Any such disruptions can impact the production of renewable energy products and ultimately affect the stock prices of companies in the sector.

Market Volatility

Market fluctuations are a common occurrence in the world of investing, especially when the inflation rate is high. These fluctuations can lead to significant losses in stock prices and negatively impact investors’ portfolios. One way to mitigate this risk is to diversify the portfolio by investing in different sectors or asset classes. By doing so, investors can offset the loss of one stock with the gains of another, potentially reducing overall portfolio risk.

In addition to diversification, setting realistic investment goals is crucial to successful investing. Profits are rarely consistent and can be highly volatile, especially in volatile markets. It is essential to invest with a long-term perspective and keep in mind that returns are unlikely to be parabolic. Instead, investors should focus on building a solid portfolio and stick to their investment plan, avoiding knee-jerk reactions to market fluctuations.

 

Admiral Markets Review

Admiral Markets Review

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Pros

  • list bullet Over 40,000 active clients from 110+ countries, carrying out an average of 1.5 million trades per year.
  • list bullet Competitive spreads as low as 0.5 pips and up to 500:1 leverage for forex trading.
  • list bullet Provides access to over 8,000 trading instruments, including 40+ forex pairs, 200+ stocks, and 5+ cryptocurrencies.

Cons

  • list bullet Admiral Markets has relatively high minimum deposit requirements for some account types, such as those in GBP.
  • list bullet Some users have reported slow response times from customer support, during excessively busy periods.
Libertex Review

Libertex Review

star-empty star-empty star-empty star-empty star-empty
star-full star-full star-full star-full star-full

Pros

  • list bullet 0% fees on stock trades, minimum deposit of only $10 or equivalent
  • list bullet Over 322 tradable assets available
  • list bullet Unmatched user-friendly interface, easy for beginners to catch on

Cons

  • list bullet Unavailable in some countries, including the United States
  • list bullet Only features two types of accounts (Demo and Standard)

India’s Carbon Emissions Pledge

India, with the support of China, is reportedly seeking to build a consensus within the G20 group that allows countries to choose their roadmap to reduce carbon emissions, instead of setting a deadline to end the use of fossil fuels. India is looking to introduce the phrase ‘multiple energy pathways’ in a communique to be released at a group summit in September. The move has garnered support from China and South Africa. Such pathways for energy transition would enable countries to use a variety of resources while working towards plans on net-zero emissions. At a recent meeting of the G20 Energy Transitions Working Group, India opposed a deadline proposed by rich nations, with China also lending support. Officials are meeting in the run-up to the G20 summit to finalise the group’s position on global issues, including climate change.

Conclusion

We have researched and evaluated the available value stocks in the market and analyzed the best platforms that offer attractive rates for investing in green energy stocks in India. Here are some key takeaways to keep in mind:

·       Admiral Markets and Libertex are two platforms that offer great deals on green energy stocks in India. However, it is essential to do thorough research and compare the offerings of various platforms to find the one that best suits your investment goals.

·      Before investing in any green energy stock, it is crucial to assess the company’s financial performance, brand power, industry trends, and market conditions. This information can help you make an informed decision and mitigate risks associated with investing in the stock market.

·       While there are multiple risks associated with trading stocks, it is possible to mitigate them by doing your due diligence before investing. This includes understanding market conditions, diversifying your portfolio, and keeping realistic investment goals.

Despite the current market volatility and the risks associated with investing in the stock market, green energy stocks have several long-term upsides. They are the future of investments that can provide a sustainable and prosperous tomorrow. Although some stock prices may be declining due to inflation, they have the potential to rise as market perceptions shift. So, if you want to be a part of a greener and wealthier tomorrow, now is the time to invest in green energy stocks.

FAQs

What are renewable energy stocks, and why should I invest in them?

Renewable energy stocks are stocks of renewable energy companies. These stocks have started to gain popularity thanks to the recent demand for green energy solutions. They have long-term upsides, which is why people should invest in them.

Which types of renewable energy sources are most commonly used in India, and which companies are leading the industry?

There are four kinds of renewable energy resources that are getting common in India. Biomass energy, hydropower, wind energy, and solar energy. The leading companies that are facilitating this are Tata Power and Suzlon Energy.

How can I evaluate the financial performance of a renewable energy company before investing in its stock?

Check out the market conditions and the financial reports that these companies upload to the MCA database. Assess their PvE ratios before investing.

Can I invest in renewable energy stocks online, and if so, which brokerage firms offer this service in India?

Yes, you can invest in renewable energy stocks online, and the best brokerage firm that offers this facility is Admiral Market. Libertex comes a close second.

Are there any tax benefits or incentives for investing in Indian renewable energy stocks?

While the government has put some non-tax incentives on solar modules, currently, there are no tax incentives in this sector.

What risks should I be aware of when investing in renewable energy stocks, and how can I mitigate these risks?

You must be aware of the market's volatility, the changing regulatory landscape, and the geopolitical issues when investing in renewable energy stocks. Invest responsibly by doing your due diligence and having realistic expectations if you want to mitigate these risks.

How do I know if a renewable energy stock is a good long-term investment?

The renewable energy market is growing at an unprecedented scale, and many people are now being converted to investing in this sector. It means that the number of investors in this sector will only grow, leading to a scarcity of stocks and an increase in price.

Can I invest in renewable energy stocks with a small amount of capital, or do I need to have a large sum of money to get started?

Yes, you can invest in renewable energy stocks with a small amount of capital. There are many stocks available right now with great upsides that are available at a relatively low cost.

What is the expected rate of return for investing in Indian renewable energy stocks?

The expected rate of return for investing in Indian renewable energy stocks depends on the market conditions. But a 30 to 40% monthly increase is our conservative estimate of the expected rate or return. How do I track the performance of my renewable energy stocks, and what should I do if I want to sell my shares? You can track the performance of your renewable energy stocks on the brokerage firm you bought the stocks from. Go to their investments menu, and you will see the price chart. You can change the look of the price charts depending on your performance to monitor its price.