Clean energy exchange-traded funds (ETFs) offer exposure to a wide range of clean energy stocks without betting it all on one company. ETFs invest in multiple stocks within a single industry, or several related industries, to help you create a diversified portfolio without having to manage a lot of individual investments.
High global interest rates and a slow rollout of Inflation Reduction Act-financed projects have hit clean energy stocks hard over the last year, and clean energy ETFs have felt the effects. The uncertainty caused by the Trump tariffs and talk of potential changes to the Inflation Reduction Act has kept additional pressure on many stocks in the industry. However, experts think things could still turn around for clean energy stocks. That makes these clean energy ETFs a potentially lucrative buy-and-hold investment.
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Best Clean Energy ETFs in 2025
Here’s a look at the top clean energy ETF options for 2025.
iShares Global Clean Energy (ICLN)
- Price: $11.71
- Assets under management: $1.31 billion
- Expense ratio: 0.41%
- Top five holdings: Iberdrola, SSE plc, Vestas Wind Systems, First Solar, China Yangtze Power LTD A
The iShares Global Clean Energy ETF, like many ETFs in this roundup, is trading about midway between its 52-week high and low. The fund invests in companies that produce renewable energy from solar, wind and other sources.
A low expense ratio of 0.41% and a yield of 1.84% make this ETF an interesting choice for 2025.
Invesco WilderHill Clean Energy ETF (PBW)
- Price: $14.78
- Assets under management: $215.57 million
- Expense ratio: 0.65%
- Top five holdings: Eos Energy Enterprises, ReNew Energy Global PLC, Sunrun, REX American Resources, Quanta Services
The Invesco WilderHill Clean Energy ETF tracks the WilderHill New Energy Global Innovation Index, with at least 90% of its assets in securities on that index. The fund is weighted toward small-cap stocks, which make up about 40% of the portfolio. The ETF yields an attractive 2.66%.
Invesco Global Clean Energy Holdings (PBD)
- Price: $10.39
- Assets under management: $67.72 million
- Expense ratio: 0.75%
- Top five holdings: Innergex Renewable Energy, Elia Group SA/NV, Nordex SE, SPIE SA, Grenergy Renovables SA
It’s important not to confuse Invesco Global Clean Energy Holdings (PBD) with its counterpart, PBW. Both track the WilderHill Clean Energy Index, but PBD includes global companies. Just under 23% of its holdings are U.S.-based, and the rest are diversified across China, Taiwan, South Korea, Japan, Europe, and Canada.
Invesco Solar ETF (TAN)
- Price: $28.85
- Assets under management: $738.52 million
- Expense ratio: 0.71%
- Top five holdings: First Solar, Enphase Energy, NEXTracker, GCL Technology Holdings Limited, Sunrun
Unlike its clean energy holdings, Invesco’s Solar ETF is a highly focused fund that tracks the performance of stocks on the MAC Global Solar Energy Index. The fund includes top solar companies like Enphase Energy and First Solar, making it a good choice if you want to support the growing future of solar power across the continent.
ALPS Clean Energy ETF (ACES)
- Price: $21.88
- Assets under management: $85.58 million
- Expense ratio: 0.55%
- Top five holdings: Lucid Group, Ormat Technologies, Rivian Automotive, Northland Power, Itron
The ALPS Clean Energy ETF tracks the CIBC Atlas Clean Energy Index, focused on U.S. and Canadian companies involved in renewable energy and clean technology. With modest fees of 0.55%, this passively managed fund emphasizes thematic growth in the industry, bolstered by a belief in a sustainable future.
First Trust Global Wind Energy ETF (FAN)
- Price: $15.41
- Assets under management: $130.4 million
- Expense ratio: 0.60%
- Top five holdings: Orsted, Vestas Wind Systems, Northland Power, EDP Renovaveis, Nordex SE
The fund includes companies identified as “pure play”–directly related to producing wind power–and “diversified” companies, which are in some way related to the sustainable energy market. That makes this ETF a solid choice, especially if you are interested in supporting the growth of wind power.
First Trust Nasdaq Clean Edge Green Energy Index Fund (QCLN)
- Price: $26.19
- Assets under management: $394.01 million
- Expense ratio: 0.59%
- Top five holdings: Rivian Automotive, First Solar, Tesla, ON Semiconductor Corp., Acuity
The First Trust Nasdaq Clean Edge Green Energy Index Fund tracks companies on the Nasdaq index that are “engaged in manufacturing, development, distribution and installation of clean energy technologies including, but not limited to, solar photovoltaics, wind power, advanced batteries, fuel cells and electric vehicles.” This makes it one of the more diversified funds on this list, covering virtually every green energy technology. If you want to support sustainability with a largely U.S.-based fund, this ETF is one way to do so.
Why Invest in Clean Energy ETFs?
With the growth of renewable energy and clean energy initiatives, clean energy ETFs seem like a solid investment choice now and in the future. McKinsey and Company predicted that by 2026, global renewable-electricity capacity could grow more than 80% from 2020 levels, with roughly two-thirds of that growth coming from wind and solar.
ETFs make it possible to invest in the whole industry without choosing individual stocks. Keep in mind, near-term performance may not represent the value you can ultimately derive from these investments.
In the case of clean energy stocks, it might be wise to embrace Warren Buffett’s philosophy of not buying a stock for 10 minutes if you aren’t willing to hold it for 10 years.
Clean Energy ETFs vs. Other Investment Options
Clean energy ETFs help improve the chances that you’ll pick the long-term winners in the clean energy field, as you’ll own a diverse collection of individual companies. But there are other options both within and outside the field that might be worthy additions to your portfolio, such as the following:
- Individual equities: Owning individual equities in the clean energy industry can give you the opportunity to earn stellar returns, if you’re able to pick the right ones. Just bear in mind that you’ll also be bumping up your risk profile, potentially putting all of your capital at risk.
- Clean energy mutual funds: Most clean energy ETFs passively track indexes. If you own a clean energy mutual fund instead, you may benefit from active, professional management.
- Mix of clean and traditional energy stocks: While some investors buy clean energy ETFs for environmental purposes, others are simply looking to generate profits from the energy sector. If you fall into this category, you may consider owning traditional oil and gas companies in addition to clean energy stocks. Even if renewables become the future, oil and gas is definitely still the main source of energy in the modern world.
Risks of Investing in Clean Energy ETFs
Clean energy companies range somewhere between “aggressive” and “speculative” on the risk-reward spectrum. Although clean energy seems to be the wave of the future, when that future arrives is still very much in debate. While renewable energy projects are growing, they still provide only 21.4% of U.S. energy needs as of 2023, according to the U.S. Energy Information Administration.
Clean energy companies are fighting battles on several fronts, including legislative, as the Trump Administration has made it clear that it favors gas and oil production over renewables. Within the industry, individual companies are still struggling to make clean energy affordable and available to the mass market. These hurdles may take years to overcome.
Trends Shaping the Clean Energy Industry in 2025
If you’re going to invest in clean energy, you’re going to have to accept the fits and starts that come with it. While renewable energy is slowly making progress across the globe as the technology becomes more desirable, efficient, and cost-effective, it also faces continual legal and legislative hurdles.
If interest rates remain high in 2025, that could hold back clean energy stocks, as they hold back the development of large-scale projects like wind or solar farms. The Trump Administration has also talked about modifying or even repealing the Inflation Reduction Act, which provided numerous grants for the clean energy industry.
The direction of oil and gas prices also affects clean energy. When oil prices rise, clean energy becomes more attractive, and vice versa.
In a recession, equity prices tend to fall, and many economists fear the U.S. is heading in this direction in 2025. But this may actually help clean energy stocks, at least on a relative basis. As renewable energy stocks aren’t directly correlated with the overall stock market, clean energy can act as a diversifier. These stocks can also actually benefit from the falling interest rates and inflation that typically come with a recession.
How To Buy Clean Energy ETFs
Clean energy ETFs trade on the open stock market, just like regular stocks, so they are easy to buy. Here are the steps:
- Choose a brokerage: Most brokers now offer zero-commission online trading of ETFs, so find the one that best suits your needs.
- Fund your account: You can’t conduct trades until you have money in the account.
- Research your clean energy ETF: As there are many options, you’ll have to pick the one that invests in companies you want to own and that has a risk profile you can tolerate.
- Take a portfolio view: Generally speaking, no single industry, including clean energy, should take up too much of your overall portfolio. Only invest as much as you can afford to lose in clean energy.
- Enter your order: Once you’ve got everything in order, enter your trade on your broker’s online platform.
Information is accurate as of Apr. 22, 2025, with data sourced from individual fund companies and Yahoo! Finance.
Cynthia Measom and Daria Uhlig contributed to the reporting for this article.