2025 is shaping up to be the year of sustainable investing. With governments worldwide pushing for net-zero emissions, the clean energy stock market trends are seeing massive momentum. From solar energy ETFs to wind energy ETFs, investors are flocking to clean energy investment funds as a way to profit while making a positive impact.
If you’re a retail investor, NRI, financial advisor, or corporate employee looking to build a green portfolio strategy, you’re in the right place. In this guide, we break down the Top 5 Clean Energy ETFs to buy in 2025 — along with insights on performance, expense ratios, and long-term potential.
Why Choose Clean Energy ETFs in 2025?
Before we dive into the list, let’s answer the big question: Why should you invest in clean energy ETFs now?
- Explosive Growth Potential – The renewable energy sector is projected to grow at double-digit CAGR over the next decade.
- Diversification Made Simple – ETFs let you hold dozens of green energy companies (solar, wind, battery storage) in one click.
- ESG Investing Alignment – Millennials & Gen Z investors prefer sustainable investing trends, making this a long-term demand driver.
- Low Costs & High Liquidity – Most ETFs offer low-cost index exposure, making them ideal for long-term SIP and retirement planners.
💡 Pro Tip: Pair your ETF portfolio with Best Tax Saving Investments to maximize post-tax returns and stay compliant.
Top 5 Clean Energy ETFs to Buy in 2025
Here’s our expert-picked list of best clean energy ETFs that combine growth potential, low expense ratios, and ESG focus.
1. iShares Global Clean Energy ETF (ICLN)
- Why It’s Great: ICLN is one of the best clean energy ETFs globally, holding over 100 companies focused on solar, wind, and hydro energy.
- Expense Ratio: 0.40%
- Holdings: Enphase Energy, First Solar, Vestas Wind Systems
- Ideal For: Long-term investors seeking global diversification and exposure to top renewable energy ETFs.
- Performance Outlook: Expected to gain from U.S. and EU green subsidies in 2025.
2. Invesco Solar ETF (TAN)
- Why It’s Great: If your focus is solar energy ETFs, TAN is the most direct play. It invests in solar manufacturers, installers, and tech innovators.
- Expense Ratio: 0.69%
- Holdings: SolarEdge, Sunrun, Canadian Solar
- Ideal For: Swing & position traders tracking quarterly solar demand cycles.
- Performance Outlook: Strong 2025 outlook as solar adoption surges under government incentive programs.
3. First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN)
- Why It’s Great: QCLN blends solar, wind, and EV exposure — perfect for a green portfolio strategy.
- Expense Ratio: 0.60%
- Holdings: Tesla, ON Semiconductor, Albemarle
- Ideal For: DIY traders who want exposure to both renewable energy and EV revolution.
- Performance Outlook: Positioned to benefit from battery storage & EV infrastructure boom.
4. SPDR S&P Kensho Clean Power ETF (CNRG)
- Why It’s Great: CNRG uses AI-driven stock selection, offering a smart beta approach to clean energy ETFs.
- Expense Ratio: 0.45%
- Holdings: Brookfield Renewable, Ormat Tech, Xcel Energy
- Ideal For: Financial advisors & wealth managers building ESG-friendly client portfolios.
- Performance Outlook: Strong risk-adjusted returns with lower volatility compared to peers.
5. ALPS Clean Energy ETF (ACES)
- Why It’s Great: ACES is a top renewable energy ETF with exposure to solar, wind, hydro, geothermal, and biomass energy.
- Expense Ratio: 0.55%
- Holdings: NextEra Energy, Plug Power, SunPower
- Ideal For: Corporate employees & NRIs seeking low-cost ETFs (India/USA) for passive SIPs.
- Performance Outlook: Well-balanced portfolio for those seeking steady, long-term compounding.
How to Invest in Clean Energy ETFs (Step-by-Step)
- Choose Your Brokerage: Use platforms like Zerodha, Groww, Vanguard, or Fidelity for easy ETF access.
- Select ETFs: Pick from our top 5 list based on your risk profile & time horizon.
- Decide SIP or Lump Sum: For long-term growth, SIPs smooth out volatility.
- Track Performance: Monitor quarterly reports and clean energy stock market trends.
- Rebalance Yearly: Adjust your green portfolio strategy to maintain optimal exposure.
Sustainable Investing Trends to Watch in 2025
- Government Incentives: IRA in the U.S. & EU Green Deal to boost renewable adoption.
- Battery Storage Boom: Accelerating demand will benefit lithium & EV-related ETFs.
- Corporate ESG Goals: More companies will commit to 100% clean energy sourcing.
- AI & Smart Grids: Driving operational efficiency for renewable projects.
This makes 2025 an excellent year to invest in clean energy ETFs before the sector experiences its next growth wave.
Tips for Building a Green Portfolio Strategy
- Diversify Across Sectors: Don’t just buy solar ETFs — add wind energy ETFs and battery storage plays.
- Focus on Low-Cost ETFs: Expense ratios eat into returns, so pick low-cost ETFs (India/USA) wherever possible.
- Align with Goals: Are you seeking retirement wealth or short-term trades? Choose ETFs accordingly.
- Stay Updated: Follow sustainable investing trends and quarterly earnings calls.
💡 Money Tip: If you need liquidity for short-term expenses, consider a Personal Loan with Low Interest Rates instead of redeeming ETFs early.
Risks to Consider Before You Invest
- Volatility: Clean energy stocks can be more volatile than traditional energy.
- Policy Risk: Government incentives and subsidies can change, impacting returns.
- Currency Risk: Global ETFs expose you to USD-INR fluctuations (for Indian investors).
Conclusion
Whether you’re a retail investor, financial advisor, or retirement planner, adding green energy ETFs to buy in 2025 can help you build wealth while making a difference. These clean energy investment funds not only provide exposure to a booming sector but also align with ESG investing principles — making your money work for both profit and planet.
The key is to stay diversified, stay invested, and let the best ETFs for long-term growth compound over the years.
FAQs:
1. Are Clean Energy ETFs a good investment in 2025?
Yes! With strong clean energy stock market trends and global push for decarbonization, they remain a top choice for growth investors.
2. Which is the best clean energy ETF for long-term growth?
ICLN and ACES are considered among the best ETFs for long-term growth due to their diversified exposure and lower expense ratios.
3. Are solar energy ETFs better than wind energy ETFs?
Both have potential — solar energy ETFs are more volatile but higher growth, while wind energy ETFs offer steady returns.
4. Can I invest in clean energy ETFs from India?
Yes, through international brokerage accounts or mutual funds tracking top renewable energy ETFs listed in the USA.
5. What is the minimum amount to start?
You can start with as little as one ETF unit (usually $20-$50 per unit), making them ideal for beginners.
