Best Renewable Energy Stocks to Watch in 2026 and How to Invest in Them

#2 IOC

Next on the list is IOC.

The company is playing an active role in India's energy transition through sustained investments in renewable energy, green hydrogen, and other sustainable technologies.

IOC's renewable energy footprint currently is 252.1 MW, comprising 167.6 MW of wind capacity and 84.5 MW of solar capacity, which together generated 365.72 GWh of power during FY25.

Further to achieve the operational net-zero ambition, IOC has incorporated Terra Clean Limited (TCL), a wholly owned green energy arm tasked with shaping the future of Indian Oil's renewable portfolio.

TCL is kicking off with 1 GW of Renewable Energy projects, with a clear roadmap to scale up to 5.3 GW in the coming years.

To strengthen this momentum, the company is actively pursuing strategic alliances with top-tier solar developers and power transmission partners, unlocking new opportunities and synergies in the clean energy space.

On the financial front, its revenue has grown at a CAGR of 14.1%.

Its 3-year average ROE and ROCE stand at 13.1% and 16.8% respectively.

IOC's Financial Snapshot

Going forward, IOC is targeting net-zero operational emissions by 2046, with a strong focus on green hydrogen, biofuels, and renewable energy solutions.

In line with this long-term vision, the company has set an ambitious renewable energy capacity target of 31 GW by 2030.

For more details, see the IOC company fact sheet and quarterly results.

#3 GAIL

Next on the list is GAIL.

GAIL is the largest state-owned natural gas processing and distribution company in India. The company has a diversified business portfolio.

Renewable energy remains a central focus of the company and is intensifying its efforts to bolster it further. This includes developing captive RE power projects and enhancing in-house competencies to meet its internal consumption targets.

GAIL has presence in the renewable energy sector with a total installed capacity of 145 MW, comprising 118 MW of wind power and 27 MW of solar power. Except for a 5 MW solar plant at Ramgarh (Jaisalmer), all solar power generated is used entirely for captive consumption.

Of the total wind energy capacity, 19.2 MW installed in Gujarat is strategically wheeled through the GETCO network to power various GAIL installations across the state, ensuring efficient and clean energy utilisation.

The total renewable energy generated by GAIL during FY25 is around 218 million units.

The company has also undertaken several initiatives to advance its renewable energy development. These include the extension of its MoU with BHEL for the development of solar power projects, the setting up of renewable power plants for captive power consumption, and the signing of an MoU with NTPC to strengthen cooperation across the energy sector.

Marking a major step towards new & alternate energy, in line with the National Green Hydrogen Mission, GAIL has installed its first green hydrogen plant at GAIL Vijaipur in Madhya Pradesh.

Green Hydrogen plant has a capacity for producing 4.3 TPD of Hydrogen of 99.99% (by volume) purity, through a 10MW PEM (Proton Exchange Membrane) Electrolyser unit, by electrolysis of water using renewable power.

On the financial front, its revenue has grown at a CAGR of 15.2%, while profit has seen growth of 10.4% in the past three years.

Its 3-year average ROE and ROCE stand at 12% and 14% respectively.

GAIL's Financial Snapshot

In addition, GAIL has several renewable energy projects under implementation that are expected to be commissioned over the next one to two years.

These include a 7.8 MW floating solar power project at Vijaipur, a 1.8 MW ground-mounted solar power project also at Vijaipur, and the installation of a 17.5 MW floating grid-connected solar PV plant over its raw water reservoirs at Pata, strengthening the company's clean energy portfolio.

For more details, see the GAIL company fact sheet and quarterly results.

#4 L&T

First on the list is Larsen & Toubro (L&T).

The company's renewables business operates as an end-to-end EPC service provider, executing GW-scale solar PV, energy storage, microgrid and hybrid renewable energy projects.

L&T is among the few players with proven expertise across multiple module technologies, mounting structures, contour-based solutions for complex terrains, and varied storage configurations.

Its client base spans renewable energy developers, utilities, and industrial and infrastructure customers across India, the Middle East, SAARC, ASEAN, Africa, and CIS regions.

In FY25, amid energy-transition-led growth, L&T carved out a dedicated renewables vertical from its 'Power Transmission & Distribution' business within the infrastructure segment, sharpening its strategic focus on clean energy.

Further, the company acquired the remaining 26% stake in L&T Special Steels and Heavy Forgings Private Limited from NPCIL in February 2025, making it a wholly owned subsidiary.

L&T Energy Green Tech Limited (LTEGL), a wholly owned subsidiary, received government incentives for setting up a 90 KTPA green hydrogen capacity in India, to be disbursed over three years.

LTEGL has also been allotted 500 acres at Kandla Port, Gujarat, on a 30-year lease for establishing a green hydrogen and derivatives facility.

In FY25, L&T commissioned 4.3 GWp of solar capacity. Its total renewable energy portfolio now stands at 26.9 GWp, comprising 6.9 GWp of commissioned capacity and an active construction pipeline of 20 GWp across solar and wind projects.

On the financial front, its revenue has grown at a CAGR of 71.8%, while profit has seen growth of 19.8% in the past three years.

Its 3-year average ROE and ROCE stand at 16.9% and 20.4% respectively.

L&T's Financial Snapshot

Going forward, L&T is undertaking forward and backward integration projects across the entire hydrogen value chain.

For more details, see the L&T company fact sheet and quarterly results.

#5 Suzlon Energy

Last on the list is Suzlon Energy.

For over three decades, Suzlon has played a key role in shaping India's renewable energy landscape through its wind energy solutions.

Since 1995, Suzlon has played a key role in establishing India as the third-largest producer of wind energy globally.

From deploying its first wind turbine to becoming a cornerstone of a multi-billion-dollar industry, Suzlon has been central to India's wind energy journey.

Today, the company powers one in every three wind turbines installed in India and has built a strong international presence across 17 countries on six continents, positioning Indian wind technology as competitive even in mature global markets.

On the financial front, the company delivered a revenue CAGR of 18.3%, while profitability has seen a sharp turnaround, improving from a loss of Rs 1,662 m in FY22 to a profit of Rs 20,716 m in FY25.

Its three-year average ROE and ROCE stand at 104.8% and 58.4% respectively.

Going forward, the company plans to expand its capacity in line with India's net-zero objectives, strengthening its role in the country's long-term clean energy transition.

For more details, see the Suzlon Energy company fact sheet and quarterly results.

Suzlon Energy Financial Snapshot

How to Invest in Renewable Energy Stocks

Investing in renewable energy stocks requires a balanced assessment of opportunities and risks, along with a clear understanding of company-specific and sector-wide factors.

# Pros

• Rapidly rising demand for renewable energy supports strong long-term growth for leading companies.
• Many renewable energy players generate stable cash flows, enabling regular dividend payouts.
• Investing in renewable energy companies supports sustainability by funding clean energy expansion.

# Cons

• Short-term challenges such as tariffs, changing government support, and interest rate movements can impact sector growth.
• Increasing competition across renewable segments can pressure margins and limit profitability for some companies.

# Factors to consider

• Equipment manufacturers and renewable power producers have very different revenue stability, risk profiles, and growth visibility.
• Given the capital-intensive nature of the sector, companies with strong balance sheets are better positioned for expansion.
• Order book strength, project pipeline, and management outlook should be evaluated relative to peers.
• Changes in policies, incentives, and subsidies can significantly affect the performance of renewable energy stocks.

Should you invest in renewable energy stocks?

By 2027, the country's installed renewable energy capacity is expected to cross 250 GW, underlining India's status as one of the fastest-growing renewable electricity markets globally.

Further, the Government of India aims to achieve net-zero carbon emissions by 2070. To meet rising energy demands, India is focusing on expanding low-carbon and renewable resources.

Additionally, India's energy demand is projected to reach nearly 15,820 TWh by 2040, and renewable energy will play a central role in meeting this growing need.

Policy backing also remains strong, with budgetary support for renewable energy increasing in FY27. The allocation to the Ministry of New and Renewable Energy rose to Rs 329.14 bn from Rs 265.49 bn in the previous year.

However, investors should remain cautious in the near term, as execution challenges, policy changes, competitive pressures, and interest rate movements can impact returns.

A selective, fundamentally driven approach with a long-term perspective remains key while investing in renewable energy stocks.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

Happy investing.

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