Investing in ASX renewable energy shares

What are ASX renewable energy shares?

Renewable energy in Australia has made strong progress in recent years, driven by growing investment in wind, solar, and storage capacity. According to the Australian Energy Update 2025, renewables accounted for 36% of total electricity generation in 2024 with solar contributing 18% and wind 12%.

Across the ASX, renewable energy companies have continued to expand in 2024–2025, driven by rising electricity demand, declining solar and wind costs, and strong government incentives. Origin Energy, historically one of Australia's largest fossil-fuel utilities, is accelerating its clean-energy transition. In 2025, it progressed major investments in large-scale batteries, expanded solar procurement, and advanced plans to close the Eraring coal plant while increasing its renewable and firming capacity portfolio. 

Meanwhile, Meridian Energy, one of New Zealand's largest renewable generators, continues to operate a fully renewable generation base powered by hydro and wind. In 2025, Meridian reported strong earnings growth supported by elevated hydropower generation and new wind development commitments. 

Mercury NZ has also strengthened its renewable portfolio through wind expansions and sustained hydro output, with 2025 performance benefiting from increased generation and rising wholesale electricity prices across New Zealand.

Together, these companies illustrate the spectrum of the renewable transition on the ASX – from diversified utilities rapidly reducing fossil-fuel exposure to New Zealand-based firms already operating fully renewable portfolios. The ongoing build-out of wind, solar, and battery storage assets across Australia and New Zealand continues to strengthen the sector's long-term growth outlook.

Why invest in ASX renewable energy stocks?

Environment, social, and (corporate) governance (ESG) investing has become a new super-trend in finance. ESG is an investing style that prioritises a company's environmental and social impacts alongside its profits. ESG investors seek out companies that act ethically and have adopted environmentally-sustainable business practices.

In fact, demand for these types of shares has run so hot that many investment funds have been set up that invest exclusively in companies with a solid ESG framework. And there are now even ASX exchange-traded funds (ETFs) that everyday investors can easily buy – like the BetaShares Global Sustainability Leaders ETF (ASX: ETHI) – that screen out stocks that do not meet specific ESG-related criteria.

These social trends have fuelled (pardon the pun!) massive interest in green energy shares. Renewables may even develop into one of the significant investing themes of the next decade (or more)!

So, if the warm fuzzy feeling you get from saving the environment isn't reason enough for you to buy renewable energy shares, how about the fact that doing so may help boost your portfolio's long-term returns?

Top renewable energy stocks on the ASX 

Most renewable energy stocks are grouped into the utilities sector. They are providers like Meridian Energy or Mercury NZ that source their energy from wind, hydropower and solar.  

Origin Energy 

Origin Energy's share price has climbed more than 20% over the past year, supported by solid first-quarter results and ongoing M&A speculation surrounding Kraken Technologies. While the company views Kraken's potential separation as a value driver, recent trading has softened as investors rotate into higher-risk sectors and sentiment toward defensive stocks cools.

Macquarie has reaffirmed its neutral rating with a slightly higher $11.80 price target, implying a small downside from current levels. The broker highlighted weaker performance at the Asia Pacific LNG (APLNG) business. This was driven by lower export prices, modestly softer volumes, and updated depreciation guidance tied to the likely extension of the Eraring power station.

On the financial front, Origin posted a statutory profit of A$1,481 million for FY 2025, up from A$1,397 million the year before, and underlying profit of A$1,490 million. Underlying EBITDA, however, declined to A$3,411 million. A final fully-franked dividend of A$0.30 per share was declared (A$0.60 per share total). Adjusted net debt/EBITDA rose to 1.9× from about 1.0×.

Operationally, Origin's early FY26 results were broadly in line with expectations, though lower winter demand and reduced market volatility weighed on unhedged profitability. Despite these near-term pressures, the company remains financially steady, with diversified assets and its strategic Kraken stake continuing to support long-term value.

Meridian Energy

Meridian Energy delivered strong operational momentum in October 2025, with retail electricity sales up 14.6% year-on-year and residential sales surging nearly 30%. Wetter and windier conditions lifted national hydro storage to 143% of historical averages, supporting a 17.4% increase in generation for the month. However, this was offset by a sharp 43.9% decline in average generation prices, reflecting the market impact of elevated water inflows and higher supply.

Customer growth remained a highlight, with connections rising 20%+ over the past year and demand from major industrial users, such as New Zealand Aluminium Smelters rebounding significantly. Strong national electricity demand, higher inflows, and robust retail activity signal continued strength across Meridian's portfolio, even as lower wholesale prices introduce some variability into revenue expectations.

Looking ahead, investors are watching how elevated storage levels and shifting weather conditions will shape earnings into the summer. Meridian continues to prioritise operational resilience and capital investment, including $11 million spent in October alone, while focusing on retail expansion and disciplined cost management. Despite operational strength, the share price remains 4% lower over the past year, lagging broader market gains.

Mercury NZ

Mercury NZ remains one of New Zealand's leading renewable energy companies, sourcing 100% of its electricity from hydro, wind, and geothermal assets. Its portfolio includes nine hydro stations along the Waikato River, supplying around 10% of the country's electricity. It also includes multiple wind farms including the Turitea Wind Farm near Palmerston North, set to become New Zealand's largest. Mercury also operates five geothermal plants across the North Island, using naturally occurring underground heat to generate clean power.

The company's most recent results highlight strong financial momentum. Revenue increased 21%, net profit after tax rose 29%, and EBITDAF grew 22% year-on-year, supported by stable demand and a robust balance sheet. Mercury continues to hold significant market share across its renewable segments while investing heavily in new projects and digital transformation initiatives to improve customer experience.

Despite a 10% share price decline over the past 12 months, management remains optimistic. Mercury plans to accelerate renewable energy investments and maintain consistent shareholder returns, reinforcing its long-term leadership position within New Zealand's electricity sector.  

What does the future hold for ASX renewable energy stocks?

The future looks bright for renewable energy stocks. More and more countries – including Australia – are looking to transition to green energy and reduce their reliance on the fossil fuel industry. 

One of the consequences of the ongoing Russia-Ukraine conflict is that many nations — particularly in Europe — are also looking for alternatives to Russian oil and gas. And one way countries can gain energy independence is to invest in new renewable energy projects.

However, in many ways, the renewable energy industry is still in its infancy. The global transition to renewables won't happen overnight — and not all currently emerging green energy companies will survive. This makes it an industry with significant potential but also carries high risk.

Benefits of investing in renewable energy shares

• Renewables could be one of the major investing thematics of the next decade (or longer). Many governments have imposed renewable energy targets and mandates, meaning there will likely be a strong pipeline of new green energy projects.
• The private sector is also driving green energy adoption. Many banks and lenders are moving away from the fossil fuel industry and setting targets for sustainable lending. This creates a favourable environment for green energy stocks, as they potentially have easier access to financing.
• Retail investors are becoming more environmentally conscious. Regular, everyday investors also support the green energy sector by investing in ethical ETFs and other financial products. This gives ASX companies greater incentive to embrace green energy to have easier access to shareholder capital.

And the cons…

• It is still an emerging industry with a lot of risk. Many companies with different technologies are competing to lead the renewable energy field. Not all of these companies will survive, which could leave investors out of pocket.
• The industry can be opaque. There are many different types of green energy — from solar to wind to hydropower, among others — and understanding the pros and cons of each can be difficult for the everyday investor. Making informed investment decisions requires significant research and detailed industry knowledge.

Are ASX renewable energy shares right for you?

Green energy stocks can make you feel good about where you're putting your money. These companies are actively helping to mitigate the impact of climate change by reducing society's reliance on fossil fuels as a source of energy. That's a pretty good cause to put your money behind!

And with investors only becoming more and more concerned about how their investments impact society and the environment, demand for ethical shares (like renewable energy shares) is increasing. That means an investment in green energy shares could also improve the overall long-term performance of your portfolio!

However, the usual caveats apply: Always do your research and understand the risks involved in any investment. And make sure that an investment in renewable energy shares complements the rest of your portfolio and aligns with your investing goals.