After years of false dawns, renewable energy stocks are back in vogue. Over the past twelve months, shares in wind, solar and clean infrastructure firms have surged, trouncing their fossil-fuel rivals.
According to new analysis by investment and trading platform IG, a basket of leading renewable energy companies has returned 24% over the past year; that’s compared with a meagre 2% for traditional oil, gas and mining firms.
The timing is apt. As world leaders gather in Brazil for COP30, the renewed strength of the green economy is underscoring a shift in global markets that even political headwinds cannot stall. Investors appear to be rediscovering their appetite for clean energy, encouraged by easing interest rates, stabilised supply chains and swelling corporate demand for low-carbon power.
A “remarkable comeback” for renewable energy
For much of the past decade, fossil-fuel firms have had the upper hand. The energy shocks of 2022 sent oil majors’ profits soaring, while wind and solar developers suffered from soaring costs and broken supply chains. But that advantage has faded.
As Chris Beauchamp, IG’s chief market analyst, puts it, “After a challenging 2022–23, the global renewables sector has staged a remarkable comeback.” Lower borrowing costs have revived offshore wind tenders in Britain and buoyed American projects benefiting from the Inflation Reduction Act.
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A glut of fossil fuels has also helped the green camp. President Donald Trump’s “drill baby drill” mantra has spurred a wave of new oil and gas output, especially in the United States. The International Energy Agency forecasts a global surplus of four million barrels per day by 2026, more than double the expected excess for 2025. Oversupply has sapped the profitability of traditional energy firms and dulled their share-price performance.
In contrast, the world’s demand for renewables keeps climbing. Global renewable consumption is forecast to rise by 60% between 2024 and 2030, as electrification spreads across industries and economies. The beneficiaries are a diverse group.
GE Vernova, the power-infrastructure spin-off of General Electric, has seen its shares jump 116% in the past year, buoyed by growth in electricity transmission and grid modernisation. China’s Sungrow has gained 69%, propelled by the boom in battery storage systems. First Solar [Nasdaq:GS:FSLR] and Brookfield Renewables TSX:BEPC have also enjoyed strong returns, thanks to generous subsidies and swelling investment from technology giants hungry for clean energy.
The recovery has been made easier by the unwinding of pandemic-era snarls. “Supply chain pressures have eased,” says Beauchamp. “Bottlenecks for turbines and materials hit margins hard, but companies like Siemens Gamesa and Vestas are back to profitability.”
Why renewable energy stocks are beating oil companies
Curiously, this revival has unfolded under a U.S. administration that is hardly friendly to green energy. Trump’s support for fossil fuels has widened the gap in performance between renewables and oil. As old-energy firms struggle under the weight of their own oversupply, renewable developers have quietly turned into some of the market’s steadiest compounders.
Government policy has also provided ballast. America’s Inflation Reduction Act and Europe’s REPowerEU programme continue to funnel capital into clean infrastructure, while corporate buyers (from Google to Amazon) are locking in long-term renewable contracts to meet net-zero targets.
Oil is unlikely to vanish from the global mix anytime soon. But the balance of investor enthusiasm may be shifting. Renewable firms, once dismissed as idealistic or overhyped, are increasingly seen as essential infrastructure plays: profitable, capital-intensive, and here to stay. For all of Trump’s attempts to turn back the clock, the market seems to have decided that the future, quite literally, is electric.
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