Best Clean Energy ETFs to Watch as AI-Driven Power Demand Reshapes Energy Markets

The clean energy sector is experiencing a pivotal moment. While policy headwinds have captured headlines, the underlying investment thesis remains compelling: surging electricity demand from artificial intelligence and digital infrastructure is creating unprecedented opportunities in renewable energy, even as technology costs continue to decline.

The Dual Forces Reshaping Energy Investment

Recent market performance tells the story. The S&P Global Clean Energy Transition Index has advanced 56.19% year to date and 16.26% quarter to date—a strong signal that capital is flowing into the sector despite regulatory uncertainty. Major investment firms aren’t sitting on the sidelines either. Brookfield’s latest capital raise demonstrates institutional confidence: the firm mobilized $20 billion for its Global Transition Fund II, supported by an additional $3.5 billion in co-investments and landmark partnerships with tech giants like Microsoft and Google.

The policy environment presents a mixed picture. Accelerated expiration of tax credits and permitting delays have prompted the International Energy Agency to lower its 2025–30 U.S. wind and solar growth forecasts by approximately 60% and 40% respectively. Yet market fundamentals remain robust. Industry leaders emphasize that ongoing capital deployment across the energy sector is essential to accommodate rising power consumption. The competitive advantages are clear: falling costs in solar installations, onshore wind capacity and battery storage technologies are attracting fresh capital flows.

Power Demand Surges to Multi-Decade Highs

U.S. power consumption is climbing at its fastest pace in decades, driven by three converging trends: explosive data center expansion, a manufacturing renaissance, and economy-wide electrification. The U.S. Energy Information Administration projects 2.5% demand growth in 2025, accelerating to 2.7% in 2026.

Global trends underscore the momentum. International Energy Agency data reveals that worldwide clean energy investment reached $2.2 trillion last year—more than double spending on fossil fuels. Solar and wind deployment has accelerated dramatically, electric vehicle adoption is climbing worldwide, and energy efficiency improvements continue gaining traction. The global AI market itself is projected to exceed $1.6 trillion by 2032, creating an increasingly critical need for reliable, clean power infrastructure to support energy-intensive data centers operated by major technology corporations.

Evaluating Key Clean Energy ETFs

For investors seeking exposure to this secular growth trend, several best clean energy ETFs merit consideration:

iShares Global Clean Energy ETF (ICLN) tracks the S&P Global Clean Energy Index through 101 holdings, managing $1.94 billion in assets with a 0.39% expense ratio. The fund averaged 3.57 million shares traded monthly, posting a 7.51% one-month return and 18.07% three-month return.

First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN) targets the NASDAQ Clean Edge Green Energy Index via 50 securities, overseeing $563.2 million with a 0.56% annual fee. Monthly trading volume averaged 113,000 shares, with gains of 10.74% over one month and 28.37% over three months.

SPDR S&P Kensho Clean Power ETF (CNRG) provides exposure to the S&P Kensho Clean Power Index through 42 positions, managing $207.4 million at a 0.45% cost. Trading roughly 14,000 shares monthly, it delivered 15% one-month and 42.22% three-month returns.

ALPS Clean Energy ETF (ACES) replicates the CIBC Atlas Clean Energy Index using 36 holdings, with $115.1 million under management and a 0.55% expense ratio. Average monthly volume reaches 31,000 shares, reflecting 9.07% and 24.20% returns over one and three-month periods respectively.

Invesco Global Clean Energy ETF (PBD) follows the WilderHill New Energy Global Innovation Index with 110 securities, managing $94.7 million at a 0.75% annual fee. Monthly trading averaged 23,000 shares with returns of 6.63% one-month and 20.48% three-month.

Strategic Positioning in a Transforming Energy Landscape

The case for best clean energy ETFs rests on structural rather than cyclical factors. AI infrastructure buildout, grid modernization requirements, and accelerating renewable cost curves create a multi-year growth runway. While near-term policy uncertainty demands careful stock selection, the ETF structure provides efficient portfolio construction and diversification across the clean energy ecosystem.

Investors evaluating entry points should consider their time horizon and risk tolerance, but the combination of rising electricity demand, declining renewable costs, and accelerating capital deployment suggests that clean energy remains a compelling long-term positioning element for growth-oriented portfolios.