Small-cap renewable infrastructure companies often provide innovative solutions, niche technologies, or regional renewable projects with high growth potential. Investing in small-cap ETFs focused on renewable infrastructure allows exposure to this dynamic segment with diversification benefits. Here are some notable small-cap or focused renewable infrastructure ETFs to consider in 2025.
Top small-cap renewable infrastructure ETFs
1. iShares Global Clean Energy ETF (ICLN)
- Description: While it includes large caps, ICLN holds a significant portion of mid- and small-cap clean energy infrastructure companies globally.
- Focus: Wind, solar, and other renewable power producers and equipment manufacturers.
- Why watch: Strong liquidity and diverse exposure with some emerging infrastructure players.
2. Invesco WilderHill Clean Energy ETF (PBW)
- Description: Concentrates on U.S.-based clean energy companies, with a meaningful allocation to smaller firms in renewable infrastructure and technology.
- Focus: Clean energy generation, equipment, and enabling technologies.
- Why watch: Higher small-cap weighting and innovation focus.
3. First Trust Nasdaq Clean Edge Green Energy ETF (QCLN)
- Description: Includes companies developing or deploying clean energy infrastructure, with a notable share of small- and mid-cap stocks.
- Focus: Renewable energy, energy storage, and grid modernization.
- Why watch: Growth-oriented with exposure to emerging infrastructure solutions.
4. SPDR S&P Kensho Clean Power ETF (CNRG)
- Description: Targets companies involved in clean power generation and infrastructure with a bias toward innovative and smaller companies.
- Focus: Solar, wind, battery storage, and grid technology firms.
- Why watch: Blend of infrastructure and technology firms, including small caps.
5. Global X CleanTech ETF (CTEC)
- Description: Invests in companies advancing cleaner technologies, including renewable infrastructure with a tilt toward small and mid caps.
- Focus: Renewable power producers, energy efficiency, and grid technology providers.
- Why watch: Balanced mix of infrastructure operators and tech innovators.
6. ALPS Clean Energy ETF (ACES)
- Description: Focuses on North American clean energy companies, including a number of smaller renewable infrastructure firms.
- Focus: Wind, solar, storage, and alternative fuels infrastructure.
- Why watch: Diversified U.S. and Canadian exposure with small-cap inclusion.
Considerations when investing
- Volatility: Small-cap renewable infrastructure stocks can be more volatile than large caps.
- Growth potential: Smaller companies often have higher growth prospects but with greater risk.
- Liquidity: Some small-cap-focused ETFs may have lower trading volumes.
- Sector balance: Ensure ETFs have a good mix of generation, storage, and grid infrastructure for diversification.
Small-cap renewable infrastructure ETFs provide a compelling way to capture growth in emerging clean energy projects and technologies. Investors seeking dynamic exposure to the energy transition should monitor these ETFs as part of a diversified clean energy portfolio.