Clearly, the world is undergoing a fundamental shift from hydrocarbons to green energy. And with that in mind, I researched the market for the best renewable energy stocks for next year and beyond.

Four different “buckets†of investments are available for purchase to participate in the green energy revolution.

Multiple opportunities

The first compartment contains the companies that produce the materials needed to manufacture equipment for the renewable energy industry. These companies produce the resources necessary for the manufacturing process. As such, they may not meet all investor specifications as these companies are often located in the mining industry, which has a poor environmental record.

The second group includes those who produce basic components for the renewable energy industry. These are companies that manufacture items such as solar panels, wind turbines, and electrical transformers.

The third component includes companies that generate electricity from green sources. Classic examples are the owners of solar and wind farms.

And the last bucket includes speculative companies. These companies are always exploring new technologies that can play a vital role in the green energy revolution, but which are years away from commercialization. As many of these transactions are speculative, they will certainly not be suitable for all investors.

Each of these different groups of companies has its own advantages and disadvantages. They also face their own risks and challenges. For example, many mining companies have a poor environmental record, which could discourage investors. However, other investors may be discouraged from investing in renewable energy generators, as this industry is highly regulated and incredibly competitive.

Personally, I would buy from the four groups. I think it would help diversify my portfolio away from any technology or risk factor.

Speculative actions on renewable energies

Going through the list of different organizations backwards, my favorite speculative investment right now is the hydrogen company AFC Energy (LSE: AFC).

There are a range of different hydrogen companies on the market, all of them working with experimental technologies. However, I feel more comfortable with the AFC than with their peers.

The company develops alkaline fuel cell systems that use hydrogen to generate clean electricity. He already has a product on the market. AFC’s energy system is used as the primary power source for Extreme E racing vehicles.

The system is capable of creating hydrogen using solar energy, which can then be stored and used to recharge electric vehicle batteries when needed.

The company’s participation in this event sparked interest in the technology. He also showed that it was possible to produce clean, green hydrogen without significant investment.

Even though it may be years before the company actually makes any real money and there is no guarantee that this technology has commercial potential, I would buy the stock for my portfolio today. ‘hui on a speculative basis.

Green energy production

When it comes to companies that produce green energy, there are many options. One of the biggest and most important companies in space is ESS (LSE: ESS). This group was once one of the largest utilities in the country, but it sold its retail division several years ago to focus on power generation.

Going forward, management has earmarked billions of pounds to increase its production of renewable energy. It wants to triple its production by 2030. To achieve this goal, the group plans to build the largest offshore wind farm in the world.

As one of the more established companies in the industry, I think SSE would be a great base investment for my portfolio of renewable energy stocks. The company’s shares also bear a dividend yield of 4.9%, at the time of writing.

I would also buy Greencoat UK Wind. This company focuses on the purchase and construction of wind farms and offers a 5.5% dividend yield at the time of writing. NextSolar Energy Would also fit into my portfolio as it focuses on solar power and offers a 6.7% return, at the time of writing.

All of these companies could face the same risks as we move forward. These include additional competition in the industry, lowering profit margins and lower regulations, which may limit earning potential.

Critical power

Of all the companies that produce critical components for the renewable energy industry, XP Power (LSE: XPP) stands out.

The company produces transformers that convert energy and help manage the electricity supply. As the world moves away from hydrocarbons to renewables, demand on the electricity grid is expected to increase as green energy travels through the system.

The management of this power will become a big market. According to recent business updates to XP, the company is already seeing an increase in demand.

Despite its potential, the growth of XP is by no means guaranteed. There are many competitors in the energy management and transformer market, and the group will have to remain competitive to maintain its market share. It could also face challenges from rising material costs and supply chain disruptions.

Copper producers

In the bucket of renewable energy stocks that I would buy for 2022 and beyond are the copper producers.

Estimates suggest that copper production will need to increase by around a third over the next decade to meet increasing pressure on the power grid from green energy.

There are two companies that I would buy to take advantage of, Antofagasta and Glencore. These two organizations are major producers and have relatively low production costs compared to the rest of the industry.

Yet, as I mentioned above, the mining industry does not have the best environmental record. Therefore, some investors may want to avoid these companies altogether and focus on the activities described above.