Top 5 Green Energy Stocks in India 2023

The Indian Economy is primarily driven by non-renewable fossil fuels. Despite having an abundant source of green energy at our disposal, the usage of these sustainable sources has not been very immediate.

The recent decision to achieve a 10% ethanol infusion in petrol, as well as increasing said infusion to 20% by the year 2030, shows that the government is aware of the issue this poses and wants to change the same.

But reducing petrol usage will not quite solve the problem posed by fossil fuels. From an ecological perspective, they cause an increment in the carbon emissions of the country. From an economic point of view, India’s inability to domestically produce petrol makes it dependent on imports, which also takes away its ability to set the fuel price.

The solution to this problem is a shift to alternate, green energy. Often described the same as renewable energy, green energy comes with a major difference. On top of being renewable, green energy cause no/negligible harm to the environment. 

This can be explained via the example of burning wood for renewable energy. Although wood can be grown, they also contribute towards the rise in pollution. Thus, not all renewable energy falls under the category of green energy.

The government is not unaware of the plan to improve the usage of green energy and is actively trying to make its power production domestic and, thus, more feasible. 

Again, from an ecological perspective, the government aims to achieve net-zero carbon emissions by 2070. Towards the same direction, the organisations engaged in the production of renewable energy have increased the total capacity by 250% from 2014 to 2021.

List of Green Energy Stocks in India

Well, before we pick winners, let’s meet some of the competitors. These are some of the major companies participating in the green/renewable energy race.

• Adani Green Energy Pvt Ltd
• Gita Renewable Energy Ltd.
• Waaree Renewable Technologies Pvt Ltd
• KPI Green Energy Ltd.
• Zodiac Energy Ltd
• GAIL India
• Borosil Renewables Ltd
• Indian Oil Corporation Ltd
• NTPC Ltd
• ReNew Power

To know which of these companies are the real “powerhouses”, read on and find the Top 5 Green Energy stocks.

What are Green Energy Stocks?

To better understand the need for green energy, we must first understand its counterpart. Fossil fuels are made from dead organic matter found in the earth’s crust. This organic matter is rich in carbon and hydrogen and releases energy when burned.

Fossil fuels are comprised of coal, oil and natural gas. They are the most prevalent fossil fuels due to their abundance, efficiency, and relatively cleaner burning. But these benefits come at a cost. Although natural gas is the cleanest fossil fuel, when burned at massive rates like the present, the cumulative release of pollutants mitigates this benefit. Coal and oil already have the “unclean” tag on them, which means they release the most contaminants among all fossil fuels.

Fossil fuels are also non-renewable, which means that although they occur naturally in the planet’s crust, the rate at which they are replenished is less than the rate at which they are consumed.

Thus, to serve as a solution on these two troubled fronts, green energy was discovered or, rather, popularised; to shift the world’s need from the current sources of energy. Green energy is an umbrella term that comprises all the sources of energy that have little-to-negligible emissions and are renewable. Solar, wind, hydroelectric and geothermal are the most common sources of green energy.

Future Prospects of Green Energy Stocks in 2023

According to the Central Electricity Authority, India’s power requirement is projected to reach 817 GW by the year 2030. To put this in perspective, India’s highest power demand for 2022 was recorded on 9th June at 210 GW. The Government of India also aims to achieve a target of fulfilling 50% of this demand through renewable energy sources.

The Indian Government has also planned to increase the renewable energy production capacity to 500 GW by 2030 to fulfil the above mentioned demand. For reference, the renewable energy production capacity was around 10 GW in 2005, which was increased to around 100 GW by December 2021. That’s growth by a whopping 16.6% CAGR in 16 years.

This opens up a huge opportunity for organisations to capitalise on. Various companies have been created anew or as subsidiaries of existing corporations to profit from this rising need for alternative energy.

Not only is profit the incentive for this switch, but owing to the ill effects of fossil fuels, various governments are also pushing for the switch from non-renewable to renewable energy sources.

For instance, the Indian Government allocated ₹19,500 crore for a Production Linked Incentive scheme in order to boost the production of high efficiency solar modules.

“Go Green” is not just a domestic movement anymore either. The alternate/non conventional energy sector has received an inflow of $11.62 billion from April 2000 to March 2022. India is still seen as a potential player in the renewable energy market as the rulers of UAE committed to invest $75 billion to establish a partnership in clean energy.

Well, enough Environmental Studies and Geopolitics; it’s time we get financial and look at the top 5 green energy stocks in India.

Top 5 Green Energy Stocks in India for 2023

These are my top picks of listed companies in the Green Energy Sector:

1. Borosil Renewables Ltd: As soon as I read Borosil, the “wannabe baker” in me got very excited, then confused. How does a bakeware company make renewable energy? On further inspection, I found that Borosil is a glass company with an offering that’s not just limited to consumer bakeware. The glass giant also engages in the production of labware and solar glass.

Borosil enjoys a position of proxy play in the renewable energy sector. Although the company has no units producing energy for commercial use, it is a supplier of solar glass to other players in the industry.

A strong point for the company is the fact that Borosil Renewable is the only company that produces solar glass in India. With a factory in Bharuch, Gujarat, Borosil Renewables fulfils around 40% of India’s solar glass needs. Here’s what the company’s financials look like:

2. KPI Green Energy Ltd: Formed in 2008, KPI Green Energy Ltd is a subsidiary of the KP Group of Companies. KPI Green Energy Ltd. is engaged in the production of solar energy infrastructure.

The company was formerly known as  KPI Global Infrastructure Ltd. It was listed in 2019 and has set a target of producing 1,000 MW of solar energy by 2025.

This is the company’s performance quantified:

3. Waaree Renewable Technologies Ltd: Waaree Renewable Technologies Ltd. is a subsidiary of the Waaree Group and was established in the year 1989 in Mumbai.

It is engaged in producing solar energy and has India’s largest Solar Photovoltaic Module manufacturing capacity of 2 GWs. It achieves this feat through its two manufacturing plants in Surat and Umbergaon in Gujarat.

Following are the numericals of the company:

4. Indian Oil Corporation Ltd: Yes, the “oil company” makes it to the list of renewable energy stocks. The public sector unit is engaged in reducing its carbon footprint as well as finding carbon-neutral sources of combustion fuel.

It is currently engaged in the production of Compressed Natural Gas (CNG), Compressed Bio-Gas (CBG), Ethanol Blended Petrol (EBP) and BioDiesel. IOCL is also engaged in the production of Hydrogen based fuel cells.

Here is a peek at the company’s particulars:

5. Gas Authority of India Ltd: No, I have not forgotten the point of this list another combustion fuel company on the list of renewable energy companies. Another aspect that makes it similar to the previous entrant in the list is the fact that its another PSU.

Both IOCL and GAIL boast steady financials as well as fairly regular dividend payouts. The shares are also fairly priced. Their association with the Government also puts them closer to being able to implement its vision to achieve the forecasted numbers mentioned above.

Expert Recommendations

With green energy capturing the forefront of the power industry’s attention, you as an investor would naturally want to capitalise on an up and coming sector. But irrespective of how well-versed you are in the stock market, you cannot possibly keep track of every industry or the possible strong players it may possess. So what do you do if you wish to add some valuable stocks from a lucrative market to your portfolio?

What you do is relax and head straight over to Recipe by Finology. With Recipe, you get recommendations curated by financial experts. Recipe also has Investment Insights to give you a quick rundown of businesses or industries that deserve a quick notice. So head on over to Recipe and take control of your personal finance.

The Bottom Line

As time progresses, people’s needs and necessities will develop and change. If not people’s needs, the available resources on the planet will fluctuate. Businesses need to change and grow accordingly to keep up with these changes. Not only will old businesses change, but new ones will also emerge to capitalise on these changes.

The efforts by the various players in the industry are not in vain either, as India ranks 4th in overall renewable energy capacity as well as wind power capacity. In terms of solar power capacity, India ranks 5th worldwide.

No wonder India is seen as a powerhub when it comes to renewable energy. Even Ernst & Young’s Renewable Energy Country Attractive Index for the year 2021 ranks India in the 3rd position.

As an investor, staying aware of these developments to keep an eye out for shares with potential seems like a good idea.

Which shares do you think will benefit the most from this rising need for Green Energy? Tell us in the comments section below.

Until then, happy investing.