Renewable Energy in Canada: Hype or Historic Opportunity?

Renewable energy is one of the most talked about sectors of the 21st century, alongside generative artificial intelligence and electric vehicles. Promising to increase the world’s energy supply without increasing carbon emissions, renewables point to the possibility of a cleaner future.

The image that renewable energy enjoys is undeniably a positive one. However, it’s not clear that renewables have been living up to the hype that surrounds them. After decades of being promoted by governments around the world, renewables supply only 30% of the world’s power. Add nuclear to the mix, and the figure rises to 40%, leaving well over half the world’s power coming from “dirty,” hydrocarbon-rich sources.

The question of whether renewable energy is legit or hype is a particularly pressing one for Canada. Canada’s economy was powered by fossil fuels for several decades. Today, Canada is a leader in renewable energy development. The fate of renewables will have a massive impact on Canada, as well as individual Canadian investors. In this article I explore the state of renewable energy in Canada, to determine whether this sector is all hype, or a historic opportunity.

Renewable energy in Canada: The big picture

Taking a “big picture” POV, it appears that renewable energy is a big deal in Canada. The country is mature in renewable development, with 66% of its electricity coming from renewable sources. Here are some illuminating facts about renewable energy in Canada:

• Canada was the seventh-largest producer of renewable energy in the world in 2022.
• Hydro is the most prominent form of renewable energy in Canada, producing 393,868 gigawatt-hours of power per year, accounting for about 20% of the nation’s electricity supply.
• Solar is a big growth area in Canada, growing from 27 megawatts (MW) in 2007 to 6,452 MW in 2022.
• The wind, solar, and storage sector grew 10.5% overall in 2025.

Collectively, these facts indicate that renewable energy is a major part of the Canadian company. The question is, can investors benefit from it?

Government support

One thing that bodes well for renewable energy investments in Canada is the fact that renewable enjoys considerable Federal Government support. The Federal Government offers $60 billion worth of input tax credits that save companies money; $4.5 billion in direct funding for smart renewables and electrification pathways; and up to $200 million in direct funding for emerging renewables (e.g., geothermal). These government tax breaks and grants tend to support margins, lending positively to the investment case for renewable energy in Canada.

A company doing big things in renewables

One Canadian company doing big things in renewable energy is Brookfield Renewable Partners (TSX:BEP.UN).

Brookfield Renewable Partners is a partially-owned subsidiary of Brookfield Corp that supplies power to institutional-scale users in Canada, the U.S., and abroad. Its customers include utilities, governments and tech companies. The company owns 8,300 MW of hydro assets, 17,400 MW of wind assets, 14,700 MW of solar assets, and a 50% stake in Westinghouse, the world’s largest builder of nuclear power plants.

Brookfield Renewable Partners is likely doing more big deals in clean energy than any other company in the world right now. In its pipeline, it boasts the following deals/projects:

• An ongoing commitment to build $80 billion worth of nuclear power plants in the United States (through its 50%-owned Westinghouse subsidiary).
• A 10.5 Gigawatt clean power deal with Microsoft.
• A 3,000 megawatt deal with Alphabet/Google.

These are some prestigious deals. And all three are valued in the billions of dollars.

Are renewables paying off for Brookfield Renewable?

All signs point to yes. The company is profitable, growing and signing new deals that will make it more profitable going forward. Its 10-year total return (capital gains + dividends combined) has outpaced that of the S&P 500. And finally, the company has a prestigious global brand that helps it get future deals into the pipeline. All in all, things are looking bright for Brookfield Renewable Partners, and for Canadian renewable energy more broadly.

The post Renewable Energy in Canada: Hype or Historic Opportunity? appeared first on The Motley Fool Canada.

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Fool contributor Andrew Button has positions in Brookfield. The Motley Fool has positions in and recommends Brookfield. The Motley Fool recommends Alphabet, Brookfield Corporation, Brookfield Renewable Partners, and Microsoft. The Motley Fool has a disclosure policy.