Alternative energy index definition

A closer look at alternative energy indexes and the companies that can be listed on them



What are alternative energy indexes?

Alternative energy indexes are composed of companies conducting activities in the renewable energy industry. In addition, the indexes can include companies producing equipment for renewable and clean energy.

The purpose of these indexes is to track the performance of companies in the alternative energy industry. In most cases, the indexes include stocks of the companies involved in the production of the same type of renewable energy. 

The number of stocks in the indexes can differ from one index to another, along with their market capitalisation. Moreover, the indexes can comprise companies operating in one or different geographical markets. 

Alternative energy index examples

Alternative energy indexes have become popular in the last decade or so due to the increased emphasis on the benefits of clean and green energy. Companies in the alternative energy industry may produce solar, wind or geothermal energy, biofuel, or hydropower. 

Providing logistical activities for alternative energy companies, such as distribution or production of renewable energy equipment, is also considered part of the industry. For example, the NASDAQ Clean Edge Green Energy Index (CELS) is associated with the performance of companies in the clean energy industry dealing with the production, distribution, development, and installation of related equipment. It includes more than 40 stocks, but the number may vary. 

A company can be listed on an alternative energy index if it satisfies the criteria set by the index, in particular that the stock should be listed on NASDAQ, NYSE, or Amex.

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