The renewable energy industry is booming. While it only supplies less than a quarter of the power generated today, this will change drastically by 2040. Its share is expected to grow in excess of 40% by 2040, as new technologies are developed for wind and solar energy production. Therefore, in line with the fast-changing energy landscape, energy stocks are likely to generate sizeable returns for investors.

The growth rates for renewable energy sources have all increased exponentially in recent years, with each generating capacity increasing steadily year after year until 2020 when they reached record levels. The need for a sustainable energy future has never been more pressing. With climate change accelerating, companies and other institutions are compelled to take action while governments work hard on legislation to increase clean energy technologies investment.

Having said that, let’s look at seven of the most promising and top-performing alternate energy stocks in the market:

• Brookfield Renewable Corp. (NYSE:BEPC)
• Sunrun (NASDAQ:RUN)
• Enphase Energy (NASDAQ:ENPH)
• First Solar (NASDAQ:FSLR)
• Clearway Energy (NYSE:CWEN)
• SolarEdge Technologies (NASDAQ:SEDG)
• Atlantica Sustainable Infrastructure (NASDAQ:AY)

Best Energy Stocks to Buy: Brookfield Renewable (BEPC)

Brookfield Renewable is one the largest producers of hydroelectric power globally, which makes up 62% of its total output. Moreover, it has continued to expand its solar and wind energy storage expertise. Its business generates healthy and steady cash flows through long-term power purchase agreements. Additionally, BEPC stock has generated an incredible annualized return of over 20% since its inception.

Brookfield has been steadily expanding its business through its mergers and acquisitions activity. Its operating expertise has been a key factor in its outperformance in the past few years. Its focus on the renewables side is more toward solar, which is already economical even without subsidies.

Looking ahead, Brookfield forecasts more than 15% annual growth through to 2025, enabling it to hike its dividend to more than 5%.

Sunrun (RUN)

California-based Sunrun is a top solar equipment manufacturer enjoying a remarkable run at the stock market of late. After acquiring its nearest competition in Vivint Solar last year, it now enjoys the biggest share in the residential solar sector. Moreover, Sunrun is benefitting from healthy industry growth and bullish analyst sentiment, which will likely strengthen RUN stock for the foreseeable future.

Sunrun has been on a killer run of late, posting double-digit revenue growth numbers in the past three quarters. Its most recent quarter generated over $400 million in revenues, representing a 121.3% increase from the prior-year period. Moreover, its balance sheet is in good shape, with its debt to asset ratio at an impressive 32%.

The larger economic tailwinds will give Sunrun the impetus to expand its market in the foreseeable future considerably.

Best Energy Stocks to Buy: Enphase Energy (ENPH)

Enphase is one of the top solar energy companies globally, specializing in the production of microinverters for residential and small commercial solar photovoltaic systems. Thanks to its highly effective business model and advanced product, it enjoys an unmatched economic moat in its niche.

Its revenue growth rates, which continue to accelerate, have come in at an astounding 26% for the past 5 years. On top of that, it boasts a pristine balance sheet and outstanding profitability.

Enphase’s growth trajectory has been incredible so far this year and is likely to accelerate in the future. Revenues have grown at a double-digit clip in the past four quarters, along with a sizeable increase in cash flows and operating income. Looking ahead, with the rising demand for solar energy, I expect a bright future ahead for ENPH stock.

First Solar (FSLR)

First Solar is a company that specializes in thin-film solar panels. These types of panels have been found to generate more energy than competing technologies, making them ideal for utility-scale projects requiring large amounts from this form factor.

In recent years, geopolitical headwinds have negatively impacted FSLR stock, but it’s now picking up the pace again. First Solar expects to double its capacity by 2025 from its 2020 levels. Moreover, it will benefit immensely from the increased spending in the sector, from both public and private-sector projects looking to curb the effects of climate change.

It complements that with an excellent balance sheet with more than $2 billion in net cash and just $277 million in debt. Moreover, its year-over-year EBITDA growth is at a tremendous 34%, which is a testament to its effective cost management.

Best Energy Stocks to Buy: Clearway Energy (CWEN)

Clearway Energy owns and operates one of the largest utility-scale renewable energy projects in the United States. It has 3.5 GW of wind and 1.3 GW of solar projects in operation, with several others in development. Moreover, CWEN stock has delivered over 10% annualized returns since its inception.

The company has been performing well in the past few quarters, posting steady growth in its top and bottom lines. Year-over-year revenue and EBITDA growth are at an exceptional 9.9% and 12.7%, respectively.

Moreover, it has been expanding its cash flows every quarter. In its most recent quarter, its cash flow from operating activities rose by 94%, from $100 million to $194 million. On top of that, it is targeting 5% to 8% dividend growth to complement its financial profile.

SolarEdge Technologies (SEDG)

SolarEdge has cemented its position in the solar industry and has witnessed its valuation exceed $15 billion with its success in the solar MLPE (module-level power electronics) sector. In the past few quarters, sales growth has dipped, but it remains one of the most promising names in the business.

However, in its most recent quarter, it generated a healthy $526.1 million in revenues, representing 56% year-over-year growth. Moreover, its gross margins came in at an impressive 32.8%. The company is poised for a massive comeback, as its supply chain troubles lessen over time.

The company is also looking to make inroads in the battery storage market. Given how quickly the sector is evolving, its involvement couldn’t have come at a better time. Having already established its base in the MPLE business, its foray into the energy storage market will expand its revenue base even more. Hence, SEDG stock has plenty of upside potential.

Best Energy Stocks to Buy: Atlantica Sustainable Infrastructure (AY)

U.K.-based Atlantica Sustainable Infrastructure is a highly diversified renewable energy play, which is in pole position to ride the shift toward a low-carbon economy. In addition to renewable energy, the company also owns the water and traditional power assets. More than 70% of its sales come from its renewable energy business.

Recently Atlantica has been performing great. Its cash available for distribution (CAFD) rose by 13% to $110 million in this year’s first half. Moreover, it also grew its revenues to $611.2 million from $465.7 million during the period. The spectacular improvement in its top-line is due to its continuous investments in renewable assets. Moreover, it plans to reduce its debt load of $4.8 billion to $1.9 billion over the next 5 years.

All of that adds up to make AY stock a significantly less risky play.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.