Best shares to buy now: 2 clean energy stocks

These clean energy shares could be some of the best stocks to buy now, says Rupert Hargreaves, who’s considering acquiring both.

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Windmills for electric power production.

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I think the clean energy industry is currently one of the most exciting sectors. I also think some of the best shares to buy now are located here. 

However, before I go on, I should note that many of these companies are incredibly speculative. Therefore, while I’d buy both of the clean energy stocks outlined below, they may not be suitable for all investors.

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If they can commercialise their technology, the companies could revolutionise the energy market. 

If they can’t commercialise the technology, both companies could fail. In this situation, investors may be left with nothing. 

Best shares to buy now for clean energy

I’ve focused my efforts on the hydrogen sector. I believe hydrogen can help decarbonise the global energy system. 

As such, I’d buy ITM Power (LSE: ITM) as my first clean energy stock. The firm develops polymer electrolyte membrane electrolysers for hydrogen production via electro-chemical splitting water into hydrogen and oxygen. The goal here is to lower the cost of hydrogen production.

I think this is one of the best shares to buy now as the group has already made substantial progress. 

At the beginning of July, the company announced that its joint venture with Shell to develop the most significant green hydrogen electrolyser in Europe had started production. Plans are underway to expand the capacity of the electrolyser from 10mw to 100mw at the Rheinland site, near Cologne.

While this is just one of the projects ITM’s pursuing, it’s notable for its scale. Having a substantial partner like Shell on board is also encouraging. The oil major is looking to reduce emissions, and hydrogen projects are likely to play a significant part in its transition. 

As ITM continues to prove and develop its technology, I expect further projects to be announced in the months and years ahead. 

New technology 

The other hydrogen stock I’d buy is Ceres Power (LSE: CWR). This is one of the best shares to buy now because its growth is taking off.

Ceres produces hydrogen fuel cells, and demand for these products is expanding. Revenues for the six months ended 30 June came in at £17m compared to £8.9m in the prior period. It’s planning to generate revenues of £31.5m for the full year. 

I’m encouraged by the company’s growth so far as well as its research and development initiatives. It’s currently working on a first-of-a-kind solid oxide electrolyser (SOEC) one megawatt-scale demonstrator. This will allow hydrogen production from a solid oxide which can have higher electrical efficiency and lower costs than other methods.  

Unfortunately, there’s no guarantee this technology will take off. This is a challenge both Ceres and ITM face. They may end up spending a lot of money developing technology that never gets used. And they are not the only companies in the sector. There are larger firms out there with deeper pockets trying to break the same market. Thanks to these risks and challenges, both are perilous investments. 

Still, I think they’re some of the best shares to buy now in the clean energy sector, which is why I’d acquire both today.

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Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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