The global push toward clean energy isn’t just good for the planet; it opens up new investment opportunities. With governments in the US and Canada offering incentives for renewables, companies that generate power from wind, solar, or other clean sources are gaining momentum.
Compared with fossil-fuel producers, renewable-energy companies are more sensitive to interest rates because their projects rely heavily on upfront financing. This article will look at the key elements of each business to help investors understand the renewable‑energy landscape and its opportunities.
Why This Matters
Policy matters. In the US, legislation such as the Inflation Reduction Act (IRA) has boosted tax credits for wind and solar projects. 22 states and Washington, D.C., have set the target of 100% renewable energy or 100% carbon-free electricity by 2040 to 2050.
In Canada, federal and provincial programs are encouraging clean‑energy progress. These programs help reduce the cost and risk of renewable‑energy investment. Additionally, the demand for greener power, like battery storage, EV (electric vehicle) charging, and grid modernization, is increasing. This all contributes to the business models of selected clean‑energy companies. For investors, it means the sector is not just about ideals but growth built on real economics.
Clean‑energy stocks still face difficulty with higher interest rates, cost inflation on materials and labor, project delays, and regulatory changes. The key, however, is to choose companies with solid fundamentals, credible business models, and exposure to the policy tailwind.
Broader economic conditions also influence how investors allocate capital to different sectors like renewables. Consumer-spending insights help understand what shifts in household behavior and how this, indirectly influences investment towards clean-energy projects.
Pick #1: Brookfield Renewable Partners (TSX: BEP.UN/NYSE: BEPC)
Brookfield Renewable is a Canada‑headquartered company but owned and operated globally. Its renewable power assets span hydro, wind, and solar as well as storage. It trades in Canada (TSX) and in the US (via NYSE). When looking at renewable operators like NextEra Energy and Orsted, Brookfield Renewable stands out for having one of the most diversified asset mixes, with a stronger presence in hydro than most other.
According to a 2024 summary, Brookfield commissioned 2.1 GW of new renewable capacity in Q2 2025 and expects to bring a record ~8 GW online in 2025.The firm also has a development pipeline of ~230 GW globally.Additionally, Brookfield grew its funds from operations by 10% year over year. This is driven by performance in its hydro fleet. Brookfield’s 230 GW development pipeline is larger than many peers, giving it one of the biggest growth patsh in the global renewables industry. According toGuruFocus, Brookfield Renewable Partners currently reports negative EPS (-US $0.86) and therefore no meaningful P/E ratio, as its trailing earnings are at a loss. Because Brookfield posts negative EPS, traditional valuation metrics like P/E aren’t useful, which is similar to many capital-intensive renewable operators that rely on cash-flow measures instead of net earnings.
Why it stands out
Brookfield Renewable’s diverse portfolio and large scale provide both stability and growth potential. Its long-term contracts and power-purchase agreements (PPAs) support predictable cash flows. Because of the contracts, it's a fixed price for the electricity it sells, which removes the volatility of short-term electricity prices. For Canadian investors, the company also offers built-in diversification, providing access to US and global renewable-energy markets with a single investment.
Risks
Even with long-term contracts in place, macroeconomic factors like interest rates, inflation, and the cost of capital still play a significant role. Higher rates can increase discount rates and raise the projected financing costs. At the same time, execution risk remains a concern due to the ambitious growth targets that require the company to consistently meet construction deadlines and cost expectations. Finally, investors have already priced optimism into the shares. If the growth doesn’t continue as expected, the stock might fall as it's re-examined.
Brookfield Renewable offers a relatively “safer” way to get involved in the transition to clean power, with a strong asset base and global reach.
Pick #2: First Solar, Inc. (NASDAQ: FSLR)
First Solar is a US‑based company specializing in manufacturing solar PV (photovoltaic) modules and developing large‑scale solar plants. It benefits from domestic manufacturing incentives in the US and global demand for utility‑scale solar. Within solar manufacturing, First Solar competes against companies like JinkoSolar and Canadian Solar.
First Solar has a large backlog of 64 GW of contracted projects worth US $18.5 billion. Analysts expect the stock to reach about US $247.9 per share. Over the past 12 months, the company earned roughly US $13.03 per share, giving it a P/E of about 19.7. This is higher than many Asian solar manufacturers, reflecting the premium for U.S. production and policy support
Why it stands out
First Solar also reports stronger margins than many peers, helped by its cost structure and domestic advantages. It’s focus on manufacturing and large-scale solar projects gives investors direct exposure to the core of the green-energy development. Supportive U.S. policy, particularly incentives under the Inflation Reduction Act (IRA) that favor domestic content, strengthens its competitive advantage. Additionally, a strong order backlog provides visibility into future revenue and growth potential.
Risks
Solar module manufacturing is a very competitive and cyclical business, where profit margins can easily come under pressure if raw-material costs increase or new competitors enter the market. The company’s growth also depends on maintaining a steady project pipeline and winning new contracts. Both factors can easily change if macroeconomic conditions weaken or government policy shifts. With investors already pricing in strong growth expectations, any slowdown in expansion or missed targets could heavily influence the stock’s performance.
First Solar is a higher‑growth, higher‑risk way to access the renewables wave. Its success depends on expanding production and winning projects.
How to Spot Opportunities and Risks
Government policy & incentives play a big role in the growth of green energy. This can include tax credits, tariffs, domestic content rules, and utility‑procurement trends.
Companies with long‑term PPAs (power purchase agreements) or secured capacity are considered to be more stable and less affected by short-term swings in energy prices.
Inflation, supply‑chain disruptions, and rising interest rates can all contribute to lower returns.
Large pipelines mean more potential, but it also means a bigger risk when projects overrun.
Growth is expected, but consider actual delivery, as this influences the stock.
Final thoughts
For US and Canadian investors seeking exposure to the green energy transition, both Brookfield Renewable and First Solar illustrate different ways to get involved. Brookfield offers scale, diversification, and more defensiveness, whereas First Solar offers higher growth potential but also higher risk. Consider why you are investing, what risks are involved, and what is likely already priced in.
The sustainability trend is clear: governments and businesses are gaining momentum with the shift to clean power. But as with all trends, the smart move depends on solid research, like companies with reliable business models, transparent metrics, and credible growth paths.
Consider adding one or both of these names, or similar ones, to your research list. This allows us to track developments and understand new contracts, incentive changes, and capacity and cost pressures. Participation in the green energy transition is possible without getting swept up in the hype.
