Introduction
Green energy stocks, once seen as the future of sustainable investing, are facing turbulence in early 2025. Companies like KPI Green Energy, ACME Solar, and Suzlon Energy have seen their stock prices decline sharply on the BSE, raising concerns about the sector’s near-term performance. But what’s driving this downturn? A mix of global policy shifts, economic uncertainties, and geopolitical factors are reshaping the investment landscape for renewable energy. Let’s break it down.
Also read: Suzlon Energy Ltd: Share price, latest news and financials
Green energy stocks under pressure: The numbers
On January 24, 2025, several major green energy stocks experienced notable losses:
| Company | Stock Price Change |
| KPI Green Energy | -5% (₹351.70) |
| ACME Solar | -3% (₹202.85, all-time low) |
| Suzlon Energy | -3% |
| Waaree Energies | -8% |
| Websol Energy | -5% |
| Tata Power | -3% |
This decline follows policy changes in the United States, where President Donald Trump has initiated a rollback of renewable energy incentives in favour of fossil fuel expansion.
You may also read: Waaree Energies IPO: IPO Date, Listing Price & Lot Size
The Trump effect: A policy shift towards fossil fuels
Just days after taking office on January 20, 2025, Donald Trump declared a national energy emergency to ramp up oil and gas production. His administration has since reversed key clean energy incentives, including:
- Suspending funding under the Inflation Reduction Act for clean energy projects, including electric vehicle (EV) charging stations.
- Expanding oil drilling, revoking restrictions on offshore and Alaskan drilling.
- Blocking new wind and solar projects on federal lands and waters.
- Increasing liquefied natural gas (LNG) exports, fast-tracking approvals for new projects.
These policy changes signal a major pivot back to fossil fuels, raising concerns that global investment in renewables may slow down. Lower global energy prices could make fossil fuels more competitive, potentially diverting funding away from green energy initiatives, including in India.
You may also like: Power up your portfolio with these 5 Indian EV stocks in 2024
What this means for Indian green energy stocks
India has ambitious renewable energy targets, with a goal to install 500 GW of non-fossil-fuel-based power capacity by 2030. According to Crisil, green investments in India are expected to grow fivefold to ₹31 lakh crore between 2025 and 2030. However, the recent dip in stock prices suggests that short-term challenges remain.
Challenges ahead
- Investment concerns: With the U.S. prioritizing fossil fuels, global investors may hesitate to fund renewable projects, affecting capital flow into India’s green energy sector.
- Falling fossil fuel prices: Increased oil and gas production could lower energy costs worldwide, making renewables less attractive in the short term.
- Trade policies: Trump’s potential protectionist tariffs on solar panels and wind turbines could impact supply chains, increasing costs for Indian manufacturers.
Bright spots: Long-term growth remains strong
Despite short-term setbacks, India’s renewable energy sector is poised for long-term growth. The country has made significant progress towards achieving its Nationally Determined Contribution (NDC) commitments, including:
- Reducing carbon intensity by 45% by 2030 from 2005 levels.
- Increasing renewable energy’s share to 50% of total installed capacity.
Companies like KPI Green Energy continue to expand aggressively. KPI recently secured a 66.20 MW hybrid power project order, set for completion by July 2025. The company has also raised ₹1,000 crore through Qualified Institutional Placement (QIP) to fund future projects, keeping its debt-to-equity ratio stable.
Also read: Top Energy Sector Stocks to Invest in India
KPI Green Energy’s growth metrics
| Metric | Value |
| YTD Stock Growth (2024) | +89% |
| 1-Year Stock Growth | +229% |
| Latest Order Size | 66.20 MW Hybrid Power Project |
| Capital Raised (QIP) | ₹1,000 crore |
| 2030 Target | 10,000 MW (currently 445 MW) |
Should investors be worried?
The current dip in green energy stocks is largely influenced by macroeconomic and geopolitical factors rather than fundamental weaknesses in the sector. While global policy shifts, particularly in the U.S., may create headwinds, India’s long-term renewable energy ambitions remain intact. Investors should brace for short-term volatility but recognize the strong growth potential in India’s green energy sector.
Must read: Best Green Energy Stocks to Invest in India for 2025
Conclusion
The renewable energy sector is navigating a complex landscape shaped by political and economic factors. While Trump’s fossil fuel-friendly policies have introduced uncertainties, India’s green energy growth story remains robust. With massive investment plans and ambitious sustainability goals, the sector is likely to rebound in the long run. Investors should stay informed and adopt a long-term perspective when considering green energy stocks in India.
