A strong outlook for wind energy installations is poised to support alternative energy stocks. However, escalating turbine costs, along with U.S. tariffs and recent policy shifts, may temper their momentum, especially as the One Big Beautiful Act remains a significant obstacle. Even so, accelerating transportation electrification is expected to fuel substantial near-term growth in the U.S. electric vehicle market, providing a meaningful boost to clean energy stocks. The forerunners in the U.S. alternative energy industry are Bloom Energy BE, OPAL Fuels OPAL and FuelCell Energy FCEL.

About the Industry

The Zacks Alternative Energy- Other industry can be fundamentally segregated into two sets of companies. While one group is involved in the generation and distribution of alternative energy and electricity from sources like wind, natural gas, biofuel, hydro and geothermal, the other is engaged in the development, design and installation of renewable projects involving these alternative energy sources. The industry also includes a handful of stocks that offer fuel cell energy solutions, which have gained popularity as affordable, clean energy options lately. Per the BloombergNEF report, published in September 2025, renewable energy investments set another record in the first half of 2025, rising 10% year over year to $386 billion. With similar or more investments expected in the coming years, the industry boasts solid growth opportunities for its participants.

3 Trends Shaping the Future of the Alternative Energy Industry

Wind Energy – A Major Driver of Growth: Wind energy is expanding quickly, supported by favorable policies, rising climate awareness, and its affordability as a renewable power source. Wind power is one of the lowest-cost energy sources, and ongoing technological improvements have enhanced its competitiveness against conventional fuels. Larger and more efficient turbines are delivering significantly higher output, improving overall project performance and profitability. These factors have created a strong market for wind energy. A recent Wood Mackenzie report has highlighted the sector’s rapid acceleration, projecting that the global wind industry will reach its second terawatt of capacity by 2030. According to the same report, global additions are expected to hit a record 170 GW in 2025, with more than 70 GW projected in the fourth quarter alone, the largest quarterly build ever. Wood Mackenzie also expects about 9.1 GW of wind additions per year over the next five years, totaling 46 GW by 2029 and cumulative wind capacity is projected to reach 196.5 GW. Together, these trends underscore a strong growth outlook for the U.S. wind sector, supporting broader expansion across the alternative energy industry.

EV Market Surge to Accelerate Clean Energy Adoption: Electric vehicles (EVs) are becoming a key force in reducing transportation-related emissions. Expanding EV charging infrastructure, government subsidies, tax credits, grants, and perks such as carpool-lane access, is prompting more U.S. consumers to transition from gasoline models to EVs. Meanwhile, lower battery costs are driving further growth in the U.S. EV market. According to Electric Cars Report, in the third quarter of 2025, U.S. EV sales shattered all previous records, hitting an all-time high of 438,487 EVs. It surged 40.7% sequentially and was up 29.6% from the prior-year level. Per a report by Statista, the EV market in the United States is projected to reach revenues of $105.8 billion in 2025. It is expected to show an annual growth rate (CAGR 2025-2030) of 8.57%, resulting in a projected market volume of $159.7 billion by 2030. Such an impressive outlook bolsters the prospects of clean energy stocks, which offer the largest electric vehicle charging network in the United States.

Increasing Costs Driven by Tariffs and OBBA: Escalating renewable installation costs have become a major hurdle for clean energy developers. In particular, higher steel prices, critical for manufacturing large wind turbine components, have recently pushed wind installation expenses even higher. Adding to the pressure, the U.S. government’s elevated import tariffs, introduced in early 2025, have further increased cost burdens across the wind sector.

According to a Wood Mackenzie report, tariffs and policy uncertainty have posed significant challenges for the market, causing a 50% decrease in turbine orders in the first half of 2025 compared to that a year ago, taking them to their lowest level since 2020. The OBBBA brought significant changes to the tax credits available for eligible clean energy components and facilities, including terminating the advanced manufacturing production tax credit for wind components sold after Dec. 31, 2027. To this end, it can be said that the expiration of tax credits drives project costs up far more than tariffs. Since these credits significantly reduce expenses, their expiration makes renewable energy development and production much more expensive.