Best Renewable Energy Mutual Funds for Long-Term Investors in India (2026)

Introduction

India's transition towards clean energy is creating new investment opportunities for long-term wealth creation. Backed by ambitious renewable energy targets, increasing government support, and rising corporate investments in solar, wind, hydro, and green hydrogen projects, the renewable energy sector has become an attractive theme for investors. As a result, many investors are looking for the best renewable energy mutual funds in India to gain exposure to this fast-growing industry without investing in individual stocks.

Unlike investing directly in renewable energy companies, thematic mutual funds provide diversification across multiple businesses operating in the clean energy ecosystem. Investors can conveniently begin their investment journey through a demat account opening app, making it easier to track their overall investment portfolio alongside other market-linked assets. However, since these are sector-focused funds, understanding their investment strategy, risks, and long-term growth potential is essential before investing.

This article compares some of the best renewable energy mutual funds in India, highlights their key features, discusses their advantages and risks, and explains who should consider investing in these thematic funds.

What Are Renewable Energy Mutual Funds?

Renewable energy mutual funds are sectoral or thematic equity mutual funds that primarily invest in companies involved in clean and sustainable energy production. These companies operate across various segments of the renewable energy value chain, including:

• Solar power generation

• Wind energy

• Hydroelectric power

• Green hydrogen

• Energy storage solutions

• Power transmission and infrastructure

• Renewable energy equipment manufacturing

Rather than investing in a single company, these funds diversify investments across multiple businesses that are expected to benefit from the global transition towards cleaner energy sources.

Since these are thematic funds, their performance depends largely on the growth of the renewable energy sector and related industries. Consequently, they generally carry higher volatility than diversified equity mutual funds but may offer attractive long-term growth opportunities if the sector continues to expand.

Why Renewable Energy Investing Is Gaining Momentum in India

India's renewable energy sector is witnessing strong growth, driven by supportive government policies, rising energy demand, corporate sustainability initiatives, and continuous technological advancements. The country's focus on expanding clean energy capacity and reducing dependence on fossil fuels has strengthened the long-term outlook for the sector. As renewable energy adoption continues to grow, mutual funds investing in renewable energy have gained popularity among investors seeking to benefit from India's transition towards a more sustainable energy future.

 

Best Renewable Energy Mutual Funds in India: Comparison

The table below highlights some of the prominent renewable energy mutual funds currently available for investors. Since market data such as AUM, NAV, and returns change regularly, investors should verify the latest figures before making an investment decision.

Detailed Comparison of the Best Renewable Energy Mutual Funds in India

1. SBI Energy Opportunities Fund

The SBI Energy Opportunities Fund Direct Growth is a sectoral equity scheme that invests in companies across the energy value chain, including renewable and conventional energy businesses. The fund aims to generate long-term capital appreciation by capitalising on opportunities arising from India's evolving energy sector. As of 30 June 2026, the scheme has a NAV of ?11.42, an AUM of ?8,906.34 crore, and an expense ratio of 0.84%. It has delivered a 1-year return of 6.88% since its launch and is classified as a Very High-risk fund, making it suitable for investors with a long-term investment horizon and a higher risk appetite. Investors can start with a minimum SIP of ?500 or a lump sum investment of ?5,000, while an exit load of 1% applies if units are redeemed within 30 days.

 

2. DSP Natural Resources & New Energy Fund

The DSP Natural Resources and New Energy Fund Direct Plan – Growth is a thematic equity fund that invests in companies operating across natural resources, conventional energy, and emerging clean energy segments. The fund aims to deliver long-term capital appreciation by capitalising on opportunities arising from the global energy transition and resource-driven industries. As of 29 June 2026, the scheme has a NAV of ?118.12, an AUM of ?2,456.74 crore, and an expense ratio of 1.11%. It has generated 20.98% returns over the past one year, outperforming the category average during the same period. Classified as a Very High-risk fund, it is suitable for investors with a long-term investment horizon and a higher risk appetite. Investors can start with a minimum SIP or lump sum investment of ?100, and the scheme does not levy any exit load, offering greater flexibility for redemptions.

 

3. ICICI Prudential Energy Opportunities Fund

The ICICI Prudential Energy Opportunities Fund Direct – Growth is a sectoral equity fund that invests in companies across the energy value chain, including renewable energy, power generation, transmission, and allied industries. The fund seeks to generate long-term capital appreciation by capturing opportunities arising from India's evolving energy landscape. As of 30 June 2026, the scheme has a NAV of ?11.92, an AUM of ?8,581.10 crore, and an expense ratio of 1.17%. It has delivered a 1-year return of 16.83%, outperforming the category average during the same period. Classified as a Very High-risk fund, it is suitable for investors with a long-term investment horizon and a higher risk tolerance. Investors can start with a minimum SIP of ?100 or a lump sum investment of ?5,000, while an exit load of 1% is applicable if units are redeemed within three months.

 

4. Tata Resources & Energy Fund

The Tata Resources & Energy Fund Direct – Growth is a sectoral equity fund that primarily invests in companies engaged in the energy, natural resources, and allied sectors, including businesses that may benefit from the ongoing transition towards cleaner energy. The fund aims to generate long-term capital appreciation by identifying opportunities across the broader energy and resource value chain. As of 30 June 2026, the scheme has a NAV of ?56.92, an AUM of ?1,380.84 crore, and an expense ratio of 0.95%. It has delivered a 3-year return of 18.65% and a 5-year return of 14.86%, reflecting its long-term growth potential. Categorised as a Very High-risk fund, it is suitable for investors with a long-term investment horizon and a higher risk appetite. Investors can begin with a minimum SIP of ?100 or a lump sum investment of ?5,000, while an exit load of 0.25% applies if units are redeemed within 30 days.

 

5. Kotak Energy Opportunities Fund

The Kotak Energy Opportunities Fund Direct – Growth is a sectoral equity fund that invests in companies across the energy value chain, including renewable energy, power generation, utilities, and related industries. The fund seeks to generate long-term capital appreciation by capitalising on opportunities arising from India's expanding energy sector and transition towards cleaner energy sources. As of 30 June 2026, the scheme has a NAV of ?10.92, an AUM of ?270.14 crore, and an expense ratio of 0.93%. It has delivered a 1-year return of 6.89%, while its since-launch return stands at 8.07%. Categorised as a Very High-risk fund, it is suitable for investors with a long-term investment horizon and a higher risk appetite. Investors can start with a minimum SIP or lump sum investment of ?100, while an exit load of 0.5% applies if units are redeemed within 90 days.

 

6. Baroda BNP Paribas Energy Opportunities Fund

The Baroda BNP Paribas Energy Opportunities Fund Direct – Growth is a sectoral equity fund that invests in companies across the energy value chain, including renewable energy, power generation, utilities, and related infrastructure businesses. The fund aims to generate long-term capital appreciation by capitalising on opportunities emerging from India's evolving energy sector. As of 30 June 2026, the scheme has a NAV of ?12.19, an AUM of ?700.27 crore, and an expense ratio of 1.51%. It has delivered a 1-year return of 6.60% since launch and is categorised as a Very High-risk fund, making it suitable for investors with a long-term investment horizon and a higher risk appetite. Investors can begin with a minimum SIP of ?500 or a lump sum investment of ?1,000. An exit load of 1% is applicable on redemptions exceeding 10% of the investment if redeemed within one year.

 

Key Takeaways from the Fund Comparison

Overall, these funds provide investors with exposure to India's rapidly evolving energy sector through different investment strategies and portfolio compositions. While all six schemes are classified as Very High-risk funds, they differ in terms of fund size, expense ratio, historical returns, minimum investment requirements, and exit load. Investors should compare these factors alongside their financial goals, investment horizon, and risk appetite before selecting the best renewable energy mutual funds in India that best suit their portfolio.

Benefits of Investing in Renewable Energy Mutual Funds

Renewable energy mutual funds offer investors an opportunity to participate in the long-term growth of India's clean energy sector through a professionally managed and diversified portfolio. These funds invest in companies across solar, wind, hydro, and other sustainable energy segments, reducing the need to pick individual stocks. As governments and businesses continue to invest in renewable energy, the sector is expected to benefit from structural growth trends. Investors can also use the best stock market investment apps India 2026 to compare mutual fund performance, track their investments, and make informed investment decisions more conveniently.

 

Risks of Renewable Energy Mutual Funds

Like other sectoral funds, renewable energy mutual funds carry higher risk because they concentrate investments within a single theme. Their performance can be affected by market volatility, policy changes, regulatory developments, and technological advancements in the energy sector. Investors should therefore have a long-term investment horizon and be comfortable with short-term price fluctuations.

 

Taxation of Renewable Energy Mutual Funds

Since renewable energy mutual funds are equity-oriented schemes, capital gains are taxed according to the prevailing tax rules for equity mutual funds. Short-term and long-term gains are taxed differently based on the holding period, so investors should consider the tax implications before redeeming their investments.

 

Who Should Invest in Renewable Energy Mutual Funds?

Renewable energy mutual funds are suitable for investors with a long-term investment horizon and a high risk appetite who want exposure to the clean energy sector. They may also appeal to those looking to diversify their portfolio with thematic investments and participate in India's transition towards sustainable energy.

 

Conclusion

The best renewable energy mutual funds in India can offer long-term growth potential by providing exposure to the country's expanding clean energy sector. However, as these are thematic funds, they are subject to higher volatility and sector-specific risks. Investors should carefully compare the fund's investment strategy, portfolio composition, expense ratio, historical performance, and risk profile before making an investment decision. Those planning to begin investing can also explore the best free demat account in Indiato conveniently manage mutual funds and other market-linked investments from a single platform.

 

Frequently Asked Questions

What are renewable energy mutual funds?

Renewable energy mutual funds are thematic equity funds that invest in companies engaged in renewable energy activities, such as solar, wind, hydro, green hydrogen, and power infrastructure. They allow investors to gain diversified exposure to the clean energy sector.

Which are the best renewable energy mutual funds in India?

Some of the best renewable energy mutual funds in India include SBI Energy Opportunities Fund, DSP Natural Resources & New Energy Fund, ICICI Prudential Energy Opportunities Fund, Tata Resources & Energy Fund, Kotak Energy Opportunities Fund, and Baroda BNP Paribas Energy Opportunities Fund.

Are renewable energy mutual funds a good long-term investment?

Renewable energy mutual funds can be suitable for long-term investors who have a high risk appetite and want to benefit from the growth potential of the clean energy sector. However, returns are subject to market and sector-specific risks.

Who should invest in renewable energy mutual funds?

These funds are generally suitable for investors with a long-term investment horizon, a higher risk tolerance, and an interest in thematic or ESG-focused investing.

What are the risks of investing in renewable energy mutual funds?

Renewable energy mutual funds are exposed to sector concentration risk, market volatility, policy changes, regulatory developments, and technological disruptions, which can affect their performance.

Can I invest in renewable energy mutual funds through SIP?

Yes. Most renewable energy mutual funds allow investors to start investing through a Systematic Investment Plan (SIP) with a relatively low minimum investment amount. SIPs help investors invest regularly while reducing the impact of market volatility over the long term.

Disclaimer:  This blog is dedicated exclusively for educational purposes. Please note that the securities and investments mentioned here are provided for informative purposes only and should not be construed as recommendations. Kindly ensure thorough research prior to making any investment decisions. Participation in the securities market carries inherent risks, and it's important to carefully review all associated documents before committing to investments. Please be aware that the attainment of investment objectives is not guaranteed. It's important to note that the past performance of securities and instruments does not reliably predict future performance.