India is ambitiously moving towards achieving ‘net zero’ emissions by 2070 as global awareness of climate change and environmental sustainability grows.
The Union Budget 2023-24 also mentions boosting green infrastructure and sustainable development. Green Growth was based on the Prime Minister’s vision of LiFE or Life for Environment. This goal has spurred significant growth in the Indian renewable energy market with over 15 stocks surging over 100% in the past year alone. Owing to this, the green energy sector has become a focal point for investors and policymakers alike.
So, what are green energy stocks?
Green energy stocks are shares of companies involved in producing, developing, and distributing renewable energy sources. These sources include solar power, wind energy, hydroelectric power, bioenergy, and other sustainable energy technologies. India’s key green energy sectors include Solar Energy, Wind Energy, Hydroelectric Power and Bioenergy.
Here, the green energy sector is rapidly expanding. The shift from fossil fuel-based sources to renewable sources is driving development across the entire value chain of the energy sector, particularly in the transmission and distribution segments. Green energy stocks encompass a range of companies operating in different segments of the renewable energy sector, from solar panel manufacturers to wind turbine producers and utility companies focusing on renewable energy.
There are multiple reasons why green energy is an attractive sector to explore. It is a growing market as more and more government policies, technological forays are pushing India's aim towards net-zero emissions. The country has set ambitious targets for renewable energy capacity, aiming for 500 GW by 2030, which creates an opportunity you can check out.
What's more?
Government Support: The Indian government has implemented various initiatives under the leadership of Prime Minister Narendra Modi to promote green energy, such as the National Solar Mission and the Wind Energy Mission. These policies include subsidies, tax incentives, and infrastructure development, which can enhance the profitability of green energy companies.
Environmental and Social Impact: Trying out green energy stocks aligns with sustainable and socially responsible investing principles. By supporting companies that focus on renewable energy, investors contribute to reducing carbon emissions and combating climate change.
Diversification: Green energy stocks offer diversification opportunities within an investment portfolio. They often behave differently from traditional energy stocks, providing a hedge against fluctuations in oil and gas prices.
Technological Advancements: The renewable energy sector is characterised by continuous technological innovations, which can lead to cost reductions and efficiency improvements. Exploring companies at the forefront of these advancements can provide substantial returns as the technology matures.
If you are keen on investing in the green energy sector, here are some smallcase options you can check out.
Future of Green Energy in India
Green energy adoption in India is just not a high potential area but also the need of the hour. With climate change concerns getting stronger across the globe with every passing day, India's future in green energy is imperative to note. This commitment is expected to drive substantial investment and growth in the sector.
Moreover, continued advancements in renewable energy technologies, such as more efficient solar panels, improved wind turbines, and energy storage solutions, will enhance the viability and cost-effectiveness of green energy projects.
On the investment side of things, both domestic and international investors are increasingly focusing on green energy. This influx of capital will support the development of new projects, expansion of existing infrastructure, and technological innovations.
Also, the Indian government is investing in renewable energy infrastructure, including the development of green energy corridors, which will facilitate the transmission of renewable energy across the country and improve its efficiency.
Green energy solutions are also being leveraged for rural electrification projects, which can enhance energy access and improve the quality of life in remote areas.
Overall, the future of green energy in India looks promising, driven by a combination of government initiatives, market dynamics, and global trends.