7 Stocks Benefiting from the Massive Shift to Clean Energy (2024)

With the world fighting to go green, clean energy stocks are a safe long-term bet.

For one, at the 2023 Conference of the Parties (COP28) meeting, 200 countries agreed to transition from fossil fuels, drafting text that would result in“tripling renewable energy capacity globally and doubling the global average annual rate of energy efficiency improvements by 2030,”according to CNBC.

Two, according to the International Energy Agency (IEA), the world has a “real chance” of achieving those COP28 targets. The agency added that the world added about 510 gigawatts of renewable energy capacity in 2023, a 50% jump year over year.

Even companies likeHoneywell(NASDAQ:HON) are realigning business around renewables. According to CEO Vimpal Kapur, “Honeywell is in a unique position to both help the world meet today’s growing energy needs, while also enabling the energy transition,”as also added by CNBC.

However, this is just the start.

With global leaders getting far more serious about transitioning to clean energy, you may want to add more clean energy stocks to your portfolio, including:

NexGen Energy (NXE)

At the 2023 COP28 meeting, more than22 countries pledged to triple their nuclear capacity. All noting that the revival of nuclear energy was critical for cutting emissions to near-zero. All of which is great news for clean energy stocks, likeNexGen Energy(NYSE:NXE).

After all, there’s no net zero without uranium.“Nuclear energy operates emission-free, mitigating carbon dioxide and curbing harmful air pollutants. It’s not just an alternative; it is pivotal to global clean, sustainable energy transition–the key for net zero emissions,”according to CarbonCredits.com.

That’s not all. Uranium prices are pushing aggressively higher lately because of supply-demand issues that won’t cool off any time soon. With the global community intensifying its fight against climate change, nuclear energy is quickly emerging as a great way to solve the climate issue. Unfortunately, according to some analysts, there may not be enough supply to go around,as noted by Yahoo Finance.

Global X Uranium ETF (URA)

Or, if you’d rather diversify with uranium stocks at a low cost, there are exchange-traded funds (ETFs) like theGlobal X Uranium ETF(NYSEARCA:URA).

With an expense ratio of 0.69%, the ETF invests in companiesinvolved in uranium mining and production, including those in extraction, refining, exploration, or manufacturing of equipment for the uranium and nuclear industries. Some of its top holdings includeCameco Corp.(NYSE:CCJ), NexGen Energy,Paladin Energy(OTCMKTS:PALAF),Energy Fuels(NYSEAMERICAN:UUUU), andDenison Mines(NYSEAMERICAN:DNN) to name a few.

Since late 2023, the ETF rallied from about $21 to a recent high of $32.21. From here, given the supply-demand issues with uranium, I’d like to see it closer to $40 a share.

Plug Power (PLUG)

We can also look at hydrogen stocks.

Granted, most of these clean energy stocks have taken a massive hit, but a few are showing signs of life, including Plug Power (NASDAQ:PLUG). The stock just rallied from about $2.60 to a recent high of $5.14.And it could see further upside.

All on the news it just started production at its new greenhydrogen plant in Georgia, which will reportedly produce 15 tons of liquid hydroelectric hydrogen per day. Better, PLUG countsWalmart(NYSE:WMT) andAmazon(NASDAQ:AMZN) as some of its biggest clients.

CEO Andy Marsh said he’s confidentPLUG will be in a much stronger position by year-end, even with the next few months being a bit dicey, as noted by Barron’s. Even better, analysts atRoth MKM just upgradedthe PLUG stock to a buy, with a price target of $9.

“Our visit to the Georgia green hydrogen plant gives us confidence the facility is ramping smoothly and all major technical issues are handled, addressing our prior concerns about backlog and margin visibility,” said the firm.

Global X Hydrogen ETF (HYDR)

Or, if you want to diversify with more hydrogen stocks, there’s theGlobal X Hydrogen ETF(NASDAQ:HYDR). With an expense ratio of 0.5%, the ETF offers solid diversification with key hydrogen stocks for just over $6 a share.

This one invests in stocks involved with hydrogen production, and the development and manufacturing of hydrogen fuel cells. Some of its top holdings include Bloom Energy (NYSE:BE),Plug Power,Ballard Power(NASDAQ:BLDP),ITM Power(OTCMKTS:ITMPF), andCeres Power(OTCMKTS:CPWHF).

Albemarle (ALB)

Lithium is another critical part of our clean energy future. In fact, it’s a game-changer for clean technology, essential in lithium-ion batteries for electric vehicles, and energy storage systems, for example. While lithium stocks likeAlbemarle(NYSE:ALB) collapsed on lithium over-supply issues, and a drop in EV demand, don’t count these stocks just yet.

For one, lithium prices are starting to bottom out,especially with some companies shutting down or reducing production at mines. Two, if the Federal Reserve does cut interest rates, we could see a resurgence in EV sales, which will fuel greater demand for lithium.

Three,as I noted on Jan. 21, “The global net zero commitmentwill require a good amount of lithium.Global demand will surpass 2.4 million metric tonsby 2030, doubling demand forecasts for 2025. Furthermore,Bloomberg NEF says that global demandfor lithium could grow five times over by the end of the decade.”

In addition, Albemarle “expects global lithium demand to exceed supply by 500,000 metric tons in 2030. Various consultancies and other producers have slightly different projections, but all warn of a looming shortage,”reported Reuters.

ALB weakness is an opportunity. From its current price of $116.78, I’d like to see it again challenge $200, with patience.

Global X Lithium & Battery ETF (LIT)

Again, if you’d rather diversify with many more lithium stocks, at a low cost, there’s an ETF for that. Look at theGlobal X Lithium & Battery ETF(NYSEARCA:LIT), for example. With an expense ratio of 0.75%, this one invests in stocks involved with mining, refining, and battery production.

While it’s a long way from its high of about $95 in 2021, it could eventually make its way back, with a good deal of patience. At $41.87, you’re also gaining exposure to other beaten-down lithium names, such as Albemarle,Panasonic Holdings(OTCMKTS:PCRFY), andPilbara Mineral(OTCMKTS:PILBF) to name a few.

Freeport-McMoRan (FCX)

We can even look at copper stocks as the world goes green. After all, it plays a crucial role in wind, solar, and even with electric vehicle charging infrastructure. That’s all great news for companies, likeFreeport-McMoRan(NYSE:FCX).

According to S&P Global, “Copper—the ‘metal of electrification’—is essential to all energy transition plans. Deeper electrification requires wires, and wires are primarily made from copper. Technologies critical to the energy transition such as electric vehicles (EVs), charging infrastructure, solar photovoltaics (PV), wind, and batteries all require much more copper than conventional fossil-based counterparts.”

Even better for FCX, copper prices are expected to surge higher.All thanks to mining supply disruptions and higher demand, especially as the world goes green.

On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.