Investing in green energy stocks is one way to fight against global warming trends and environmental dangers impacting our planet – and the global economy.
The federal government and various companies have advocated reaching global carbon neutrality in the next few decades. Many of us want to support these efforts however we can, and green energy investments in Canada are a convenient way to do so.
This global trend is still in the beginning stages, and getting in on the ground floor is one of the best times to invest. Since there are numerous green companies on the market today, the challenge is to choose the best one for a profitable investment.
In this article, we’ll review the best green energy stocks and ETFs in Canada, and we’ll discuss the best time for green investing.
7 best green energy stocks and ETFs in Canada
If you’re keen to invest in green energy stocks and ETFs but don’t really know where to start, we can help.
Here are a few of the top stock and ETF investment options for Canadian investors.
| Green energy stock and ETFs | Ticker symbol | Market capitalization | Cost | 3 year growth |
|---|---|---|---|---|
| Brookfield Renewable Partners | BEP.UN | $13.87 billion | $50.37 | -3.07% |
| Innergex Renewable Energy | INE | $3.97 billion | $19.45 | 2.02% |
| TransAlta Renewables | RNW | $4.82 billion | $18.06 | Unavailable |
| Northland Power | NPI | $10.78 billion | $45.68 | -12.22% |
| Algonquin Power & Utilities Corp | AQN | $12.54 billion | $18.62 | 8.65% |
| Enbridge | ENB | $111.83 billion | $55.23 | 6.16% |
| Boralex | BLX | $5.06 billion | $49.26 | 1.41% |
*All information is from the Toronto Stock Exchange, accessed on August 15, 2022.
1. Brookfield Renewable Partners
- Ticker symbol: BEP.UN
- Market capitalization: $13.87 billion
- Headquarters: Toronto, ON
Brookfield Renewable is the flagship renewable power company owned by Brookfield Asset Management and has one of the largest clean energy asset portfolios in the world. The company supports solar, wind, and hydroelectric facilities used to reduce an estimated 26 million tonnes of carbon dioxide emissions.
Currently, Brookfield Renewable Partners control over 5,000 facilities spread across the Americas, Asia, and Europe that generate renewable power. These facilities generate nearly 56,000 GWh of clean energy each year.
2. Innergex Renewable Energy
- Ticker symbol: INE
- Market capitalization: $3.97 billion
- Headquarters: Longueuil, QC
This Quebec-based company was founded in 1990 and now operates in the USA, France, and Chile as well as Canada. Innergex owns and operates numerous solar, wind, and hydroelectric energy facilities – to be precise, it runs 40 hydro facilities, 35 wind farms, and 8 solar farms, and several more are under development.
Since its establishment, it has expanded its support to 43 energy production facilities across British Columbia, Ontario, and Quebec. It also has 10 in Chile, 16 in France, and 15 in the United States. In 2021, Innergex sites produced enough clean energy to power nearly 1.1 million households and reduced carbon emissions by almost 7 million metric tonnes.
3. TransAlta Renewables
- Symbol: RNW
- Market capitalization: $4.82 billion
- Headquarters: Calgary, AB
TransAlta Renewables is a green energy stock company that operates wind, hydro, and natural gas facilities across Australia and North America. With over 33 facilities across the country, including one lithium-ion battery storage site, it’s one of Canada’s largest producers of wind power. Overall, the company generated 4,300 GWh of renewable energy in 2021.
In early 2021, TransAlta announced its vow to achieve carbon neutrality by 2050 and to this end, it finalized the conversion of its last 3 coal plants into natural gas facilities in December of 2021. This has allowed the company to continue providing power to Albertans with 50% less emissions than before.
4. Northland Power
- Symbol: NPI
- Market Cap: $10.78 billion
- Headquarters: Toronto, ON
Established in 1987, Northland Power generates electricity through solar, thermal, and wind power as well as natural gas. It’s expanded since its early days and diversified in terms of both the geographical location of assets and the methods of energy production. Now, it owns and operates different clean energy stocks in North and Latin America, Asia, and Europe.
In all, this company’s assets can generate 3.2GW of energy – but it hopes to increase this to more than 6.5GW by 2027. Through its renewable facilities, Northland Power has reduced CO2 emissions overall by 1.25 million tonnes.
5. Algonquin Power & Utilities Corp
- Symbol: AQN
- Market Cap: $11.78 billion
- Headquarters: Oakville, ON
With a purpose to “[sustain] energy and water for life,” the Algonquin Power & Utilities Corporation combines numerous subsidiaries to form one larger operating business (called Liberty) that controls different North American sectors. Liberty works to provide water, electricity, and natural gas through its collection of wind, wolar, hydro, and thermal power facilities.
Founded in 1988, Algonquin currently has 41 facilities across 1 Canadian province, 12 US states, and areas of Bermuda and Chile. Since 2017, the company’s total reduction of greenhouse gas emissions has decreased by 1 million tonnes.
6. Enbridge
- Ticker: ENB
- Market capitalization: $115.39 billion
- Headquarters: Calgary, AB
Even though Enbridge advocates for investment in fossil fuels, it remains one of the top companies in the Canadian energy sector.
Over the past 2 decades, this company has invested over $8 billion in clean energy projects. Some of Enbridge’s renewable energy efforts include investments in 24 wind farms, 17 solar energy operations, 1 geothermal project, and 1 hydroelectric facility. Its various projects and facilities are spread across Canada, England, Germany, and the USA.
7. Boralex
- Ticker: BLX
- Market capitalization: $4.62 billion
- Headquarters: Kingsey Falls, QC
This Quebec company started as Cascades Energy (a subsidiary of Cascades) in 1990 and now operates several solar, hydroelectric, and wind facilities across Europe and North America, as well as a few electricity storage facilities. Aside from Canada, the company also operates in the USA, UK, and France – it’s actually the largest independent provider of onshore wind power for France.
In 2021, 100% of Boralex’s revenue came from renewable energy sources, and it was able to prevent the release of 352,666 tonnes of CO2 emissions through its renewable energy efforts – a number that’s 24% higher than the previous year.
What are green energy stocks and ETFs?
Green energy stocks – or renewable energy stocks – are issued by companies that implement environmentally friendly practices and produce clean, renewable energy sources.
Renewable energy can be used and replaced quickly, whereas fossil fuels can only be used once. Once we burn through the Earth’s supply of oil, for instance, there’s no real way to replenish it.
Examples of renewable energies are:
- bioenergy,
- solar,
- wind,
- geothermal, and
- hydropower.
Generally, the simplest way to invest in green energy is by finding an index fund or mutual fund that invests in numerous renewable energy securities. Also, investors can research the stocks of individual green energy companies to find the most profitable.
Green energy exchange-traded funds (ETFs) include stocks and other types of investments from various sources all in one package. This helps provide diversification, allowing investors to be exposed without taking on as much risk as they would with a single asset.
5 types of green energy you can support through investments
As mentioned, green energy sources are those that naturally replenish themselves. Below are 5 types of green energies you can support through investments.
1. Take a look at hydroelectric power
Hydropower is one of the biggest producers of green energy, contributing over 70% of the world’s renewable energy production.
To generate hydroelectric power, special installations, such as a dam, are created in an effort to change the natural flow of water. The water’s constant movement produces electricity – the greater the
The cycle of water is the base of the entire hydroelectric system, a cycle that’s essentially driven by the sun, therefore making hydropower one of the most natural and renewable energy systems out there.
Here are some of the best hydropower companies using eco-friendly methods in Canada:
- Hydro-Quebec,
- BC Hydro, and
- Ontario Power Generation.
2. Wind power is becoming popular
Another prime renewable source of energy is wind power, and it’s actually one of the fastest growing areas of the energy sector.
Wind power is generated through wind turbines that convert the kinetic energy of moving air into electrical energy. These turbines are strategically placed in areas with conducive weather patterns and they’re usually placed in groups of several turbines together to create a “wind farm.”
This type of green energy production is fairly common in Canada. A few examples of notable Canadian wind farms are:
- Blackspring Ridge in QC,
- Wolfe Island Wind Project in ON,
- Kent Hills Wind Farm in NB,
- St. Joseph Wind Farm in MB, and
- Centennial Wind Power Facility in SK.
Among its major benefits is the fact that wind turbines can run day and night, unlike solar-powered instruments that can only be used during daytime hours. Plus, operating costs are low, the turbines produce less pollution than solar energy production, and wind farms are quite an efficient use of space – they can be built on existing farmland without disrupting their operations, and they can even be built offshore.
Some of the top ETFs associated with wind power include:
- iShares Global Clean Energy ETF,
- First Trust Global Wind Energy ETF,
- BMO Clean Energy ETF, and
- ALPS Clean Energy ETF.
3. Solar power is big in Canada too
While some Canadians have their own solar panels installed on their property to help with their energy costs, others rely on solar power plants.
There are, in fact, more than 43,000 solar energy installations of one form or another in various locations across the country. These can be found on rooftops on all types of properties, including residential, commercial, and industrial.
While nearly half of the electricity needed for residential purposes in Canada could be acquired by installing solar panels on homes, complications arise when you consider the country’s extremely diverse weather patterns and the difference in daylight hours in the northern regions vs. southern.
We’re working on it, though – it’s expected that by 2040, approximately 3% of Canada’s total generation of electricity will be from solar power.
Here are a few of the best ETFs with solar power components:
- Invesco Solar ETF,
- iShares Global Clean Energy ETF,
- Harvest Clean Energy ETF,
- BMO Clean Energy ETF, and
- ALPS Clean Energy ETF.
4. Geothermal energy is a substantial industry
Another clean and reliable source of renewable energy is geothermal energy, which involves accessing natural heat that exists within the earth itself.
It’s an option that’s particularly appealing to those living in Canada’s more northern areas. Some of these communities are built atop high-temperature resources that can and are, in some cases, being developed for both conventional and enhanced geothermal systems.
While only a few geothermal heating projects have been started in our country, there are several in the planning or other preparatory stages. The town of Springhill in NS has even found a way to use water from a long ago-shuttered coal mine as a source of geothermal energy.
To invest in geothermal energy, take a look at these top stock options:
- Polaris Infrastructure,
- Magma Power Company, and
- Ormat Technologies.
3 ways green energy stocks help the environment
Green energy stocks play a vital role in the global transition from fossil fuels to a more sustainable energy system. By making these investments, we’re aiding the fight against global warming, helping to halt the production of greenhouse gases, and supporting the decrease of carbon emissions.
Here are a few specific ways that investing in green energy stocks can make a difference.
1. Increased investors for green companies means less for non-green companies
This is a pretty simple concept. Every person that invests in an environmentally conscious company is one less investment in a corporation with ridiculous carbon emissions. And the less investments these corporations have, the less money they have – and the less money they have, the harder it is to continue operations.
At this point, the corporation either has to change its ways or fold. And that’s exactly what we need to happen if we want our children’s children to live long, healthy lives on this planet.
2. More investors = more investments = more money for truly sustainable companies
If we value these businesses and endeavours with green, sustainable processes and quality products, we need to put our money where our mouths are and invest.
These companies can’t expand or improve without funding, so it falls to us to financially support them as much as we can and help draw attention to their efforts.
Increased attention on these companies can also make a difference and bring more funding. Attention leads to new people investing in green energy stocks etc., and this means increased funding for larger projects, such as the expansion of green energy production facilities in Canada as well as other countries.
3. Shareholders have the power to help
Most of all, shareholders have the power to help and encourage more dangerous companies to change their ways. By becoming involved with the more ecologically friendly companies, we’re encouraging those with high carbon emissions, irresponsible manufacturing processes, destructive construction practices, etc., to reassess and improve.
Even the Harvard Business Review has noted that although corporations believe that their shareholders won’t support efforts towards sustainability, this idea is outdated. They found that environmental issues were among the most pressing issues considered by shareholders and executives.
2 ways green energy stocks and ETFs affect your returns
There was an incredible surge in renewable energy investments in 2021 and reports show that our generation will continue to demand green energy sources, which means this sector is likely to see significant growth.
Therefore, it’s not hard to see that green investing can be profitable for you, the investor, as well as for the company itself.
Here are a few ways that these investments can be profitable for you.
1. Green energy stocks and ETFs help improve diversification
ETFs in and of themselves provide valuable diversification, and green energy ETFs are no different. Some ETFs focus on companies that support green technology, some on energy-efficient manufacturing, and so on, offering a wide range of opportunities for you to back the causes you care about.
And diversification among your stocks and ETFs typically means less risk and greater profits.
2. Green energy is more than just a trend
As corny as it sounds, it’s true: green energy is the way of the future. Many traditional carbon-based energy companies understand the change that’s happening around the world and are considering a move to clean energy assets.
Chevron and ExxonMobil are considering new, cleaner energy projects, but BP and Shell have gone so far as to invest in clean energy assets themselves.
Carbon energy isn’t going to disappear overnight, but it’s probably safe to say that green energy stocks have the potential to provide your portfolio with long term rewards.
How to invest in green energy stocks and ETFs
There’s no special procedure required to invest in green energy stocks, really. As with other types of investing, the methods range from robo advisors to hiring a financial advisor. You can even choose to go the DIY route.
That said, investing in green energy stocks and ETFs through an online broker is one of the simplest options. This way, you have direct control over the assets you buy and sell, so you can choose the best looking green energy stocks, all without paying extraordinary fees.
Buy your ETFs for free with Questrade
Questrade offers different ETFs for free – there are absolutely no annual fees, no monthly fees, reasonable management fees, and no commission fees at all for purchasing ETFs. This lack of fees gives you a lot more flexibility for making the green energy investments you find most interesting, and the ROI has even more potential for profit.
Plus, Questrade has options for Socially Responsible Investing (SRI), which are closely related to green energy investments.
Questrade is one of Canada's top online investment platforms. With very low fees, including no-fee ETF trading, commission-free stock trades, and plenty of investment types, Questrade just about covers it all.
- Total transparency with fees
- Surprisingly low fees
- Lots of investment account and product choices
- Plenty of convenient methods for support
- Limited amount of time to report fraud for full reimbursement
$25 GeniusCash + $50 bonus for funding a new account, and $0 commissions on stocks & ETFs- Excellent array of investing and trading tools
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- TFSA
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- RESP
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- FHSA
- Stocks
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- IPOs
- CFDs
- Mutual Funds
- Bonds
- GICs
- International Equities
- Precious Metals
$25 GeniusCash + $50 bonus for funding a new account, and $0 commissions on stocks & ETFsThe cheapest big bank online broker
Many investors feel more comfortable using an online investment broker from a well known and well established Canadian bank. This method can provide a sense of security and peace of mind that you might miss with a robo advisor or other service.
CIBC Investor’s Edge is one of the top online brokers in Canada, offering special pricing for students, account specialists to assist new investors, and an array of free investment research and tools for users to access. The fees are lower than average too, making it all the more appealing.
This online investment brokerage is owned and run by CIBC, and is targeted towards people who are interested in managing their own investments, learning about how to manage their own investments, and people who do investment management for a living. With relatively low fees for trades, and discounts for students and active traders, this is a service worth looking into.
- Get 100 free online equity trades with code EDGE100
- No minimum investment required
- Lower than average fees per trade
- Discount on trade fees for students and young adults
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- Seems to be designed for regular people, not just the ultra rich
- Per transaction fees can add up quickly
- Ages 18 - 24 trade for free
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- TFSA
- RRSP
- RESP
- RRIF
- LRSP
- PRIF
- LIRA
- LRIF
- Cash
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- Corporate
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- Formal trust
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- Estate
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- Stocks
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- Precious Metals
- Structured Notes
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FAQ
What is sustainable investing?
Sustainable investing is a way of promoting companies focused on solving the world’s challenges, such as climate change. By purchasing stock in these companies, investors can further the cause(s) and hopefully profit financially. You can find information on green energy stocks as a form of sustainable investment here.
What are green energy stocks? What about green energy ETFs?
Green energy stocks are assets from companies that produce renewable energy, such as solar, hydroelectric, wind, and geothermal power. And green energy ETFs refer to another form of assets, exchange-traded funds, offered by alternative energy companies.
What’s the best green energy stock to invest in?
There are many factors that go into choosing a stock to invest in, so “the best” really depends on your personal preferences. There are plenty of profitable and sustainable choices, though, such as TransAlta Renewables and Northland Power. Here, you’ll find 7 of the top green energy stocks.
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