Green Energy in Focus: OPAL Fuels and the Best Penny Stocks

Renewable energies, derived from consistently available resources such as sun, wind, and tides, are indispensable for today's energy supply. Compared to fossil fuels, they offer a sustainable alternative for electricity generation, heating, and transportation. Bioenergy, geothermal energy, hydrogen, hydropower, marine energy, solar energy, and wind energy are among the most important forms of this "green" energy. According to the International Energy Agency (IEA), investments in green energies have risen sharply in recent years, albeit geographically concentrated, primarily in advanced economies and China. Despite high initial investments and macroeconomic challenges, this form of energy remains competitive against fossil fuels. Global investments in energy transition technologies reached a record $1.3 trillion in 2022, but more than $1.5 trillion annually is required to achieve the goal of 11.2 terawatts of green energy capacity. Analysts are optimistic about investment opportunities in green energies, particularly due to recent fiscal stimulus measures by the U.S. government, including the Inflation Reduction Act. The Biden administration has invested an impressive $370 billion in energy and climate incentives, which aim to boost numerous areas within the green energy sector. Tax credits and other incentives for developing renewable energy infrastructure will be particularly significant for the U.S. market and fair trade partners. While traditionally large-cap ETFs are popular, interest is growing in diversified approaches that include smaller, innovative companies in sectors such as battery production, solar energy, and critical raw material extraction. JP Morgan is actively investing in green energy projects and providing tax financing for solar and storage projects in the U.S. In May, the bank committed to a $680 million tax equity participation with Ørsted, a leading energy developer, for the construction of two major projects: the Eleven Mile Solar Center in Arizona (300 MW) and Sparta Solar in Texas (250 MW). This investment is one of the largest solar and storage deals since the enactment of the Inflation Reduction Act. OPAL Fuels, listed on NASDAQ as OPAL, is a prominent player in the renewable natural gas (RNG) sector, specifically providing fuel for heavy-duty trucks. The company, the second-largest RNG station operator in the U.S., is also developing hydrogen fueling infrastructure. By accessing landfill emissions, animal waste, and wastewater, OPAL strategically diversifies its energy sources. The market for RNG is growing due to increasing demand for clean energy solutions and government incentives. Analysts rate OPAL Fuels with a buy recommendation and an average price target of $7.67—an upside potential of 74 percent. In conclusion, OPAL Fuels ranks 5th on our list of the best penny stocks in the green energy sector. However, for higher and faster returns, investing in AI stocks could be more rewarding.