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Russia Invasion Sparks Renewable Energy Stock Surge

As oil prices jump, solar and clean-energy plays also advance.

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As oil prices have surged around Russia's invasion of Ukraine, shares of renewable energy companies also jumped, with the war strengthening the argument to build renewable energy capacity, observers said.

Over the past month, oil prices have risen roughly 10%, with crude now hovering around $100 per barrel.

While that's been a boost for traditional oil and gas stocks, renewables have been on a strong run. Solar specialist Sunrun (RUN) has gained 33% since the invasion began, Sunnova Energy International (NOVA) is up 32%, and Sunlight Financial (SUNL) is up 26%. NextEra Energy (NEE), the world's largest producer of wind and solar energy, has risen 7%.  

Among exchange-traded funds, iShares Global Clean Energy ETF (ICLN) has gained 16% and First Trust Nasdaq Clean Edge Green Energy ETF (QCLN) is up 16%.  

European focused plays like Orsted (DNNGY), Vestas (VWDRY), Nordex (NRDXF), and Siemens Gamesa (GCTAY) have also performed strongly. Orsted is up 28%, Vestas 34%, Nordex 32% and Siemens 28%.

Ordinarily, renewable plays suffer when investors flee from risk. In addition, a surge in oil prices might attract investors to fossil fuel companies. But the invasion underscored Europe’s own energy demands and overdependence on Russian gas.  

“When there’s less certainty about other sources of energy, that will help renewables because they’re a cheap source of electricity,” says Joe Keefe, president of Impax Asset Management, which is the advisor for Pax World Funds, a line of fossil-fuel-free funds. “They’ve become very competitive from a price standpoint and are good long-term investments.” 

Adds Keefe: “Germany and other European countries are incentivized even more to do something with renewables if access to Russian gas is jeopardized.” 

“We’re not shocked there’s a bid for renewables,” says Shawn Kravetz, president of Esplanade Capital, an investor in renewable energy. Instead, the invasion underlines the importance of energy independence. In the United States, for example, a winter storm is rolling into Texas, just a year after a winter storm left millions without access to electricity for days. That has made solar and other renewable energies more valuable. 

“The invasion helps renewables more than it hurts,” says Kravetz. 

Correction: A previous version of this article incorrectly identified Joe Keefe as the CEO of Pax World Funds. He is the president of Impax Asset Management (March 2, 2022).

Leslie Norton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.