Green energy equities have regained momentum, marking their strongest six-month upswing since 2021.
The green total return index (TRI) climbed 35 per cent in the third quarter of 2025 after a period of stability earlier in the year, prompting analysts at Rystad Energy to ask whether the sector is entering a new growth phase.
“By all accounts, the economic and policy-driven firestorm of 2025 should have kept green energy stocks on a flat line, but the opposite has happened,” said Artem Abramov, Deputy Head of Analysis at Rystad Energy.
“The green energy index is up by a staggering 40 per cent in 2025, beating the total return of the general market by 25 per cent and leaving most upstream oil and market indexes in the dust.”
The RE Green Energy Index, which tracks 83 major developers and players in the renewable energy supply chain, currently sits at around 82 — a level last seen in late 2023.
Normalised to a baseline of 100 in January 2021, the index’s partial recovery still falls 40 per cent short of its record highs but represents a more than twofold increase over the past six years.
While energy policy volatility has tested investor confidence, Rystad suggests that stronger energy security priorities and advancements in low-carbon technology are reshaping sentiment.
“The energy security agenda is taking centre stage, while the low-carbon technology learning curve has accelerated the integration of clean tech into the future global energy mix,” Abramov noted.
Market observers point to key turning points that shaped the year’s performance.
Following President Donald Trump’s “Liberation Day” address on April 2 and the subsequent tariff announcements, green energy shares initially dipped more sharply than the wider market due to sensitivity to global supply chains.
However, recovery gathered pace between May and July and solidified from August onward, accounting for the entire 25 per cent year-to-date outperformance of the S&P 500.
The latest surge has been led by major players including CATL, Doosan, Sungrow, and Bloom Energy — companies that have benefited from strong earnings, growth outlook upgrades, and strategic announcements.
Even excluding these leaders, the broader index advanced 20 per cent in six months, reaching its highest levels in a year.
Rystad’s analysis underscores that the rally may mark the early stages of a longer uptrend.
“It should still be noted that the green energy index lost nearly 60 per cent of its value during 2022–2023, and the latest recovery remains about 40 per cent short of the record-high valuations touched at the peak in 2021,” Abramov added.
Nevertheless, growing private equity activity and renewed institutional interest suggest the possible start of a more measured, sustainable growth cycle for clean energy markets.
Rystad cautions, however, that while the outlook appears stronger, volatility remains likely as the market continues to favour top-performing firms.
The 35 per cent TRI increase this quarter, coupled with a surge in investment activity, signals renewed investor conviction in the long-term fundamentals of the global energy transition.
