{"id":12512,"date":"2025-05-13T16:48:09","date_gmt":"2025-05-13T11:18:09","guid":{"rendered":"https:\/\/lakshmishree.com\/blog\/?p=12512"},"modified":"2026-01-30T10:03:59","modified_gmt":"2026-01-30T04:33:59","slug":"best-green-energy-mutual-funds","status":"publish","type":"post","link":"https:\/\/lakshmishree.com\/blog\/best-green-energy-mutual-funds\/","title":{"rendered":"Best Green Energy Mutual Funds in India 2026"},"content":{"rendered":"\n<p>India\u2019s energy needs are growing fast, and at the same time, there\u2019s a serious push to move away from coal and fossil fuels. This shift has created new opportunities for investors who want to support clean power sources like solar, wind, and hydro. That\u2019s where green energy mutual funds come in \u2014 they focus on companies building the future of clean energy, while offering long-term growth potential for investors.<\/p>\n\n\n\n<p>As more people look for ways to invest in industries that are both profitable and sustainable, green energy mutual funds are gaining attention. In this blog, we\u2019ll explore how these funds work, which ones are performing well in 2026, and how Indian investors can get started without overcomplicating things.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"table-of-contents\"><strong>Table of Contents<\/strong><\/h2>\n\n\n\n<div class=\"wp-block-rank-math-toc-block\" id=\"rank-math-toc\"><h2>Read More<\/h2><nav><ul><li><a href=\"#table-of-contents\">Table of Contents<\/a><\/li><li><a href=\"#top-green-energy-mutual-funds-in-india-2026\">Top Green Energy Mutual Funds in India 2026<\/a><\/li><li><a href=\"#about-best-renewable-energy-mutual-funds\">About Best Renewable Energy Mutual Funds<\/a><ul><\/ul><\/li><li><a href=\"#what-are-green-energy-mutual-funds\">What Are Green Energy Mutual Funds?<\/a><\/li><li><a href=\"#power-sector-mutual-funds-in-india-a-traditional-play-with-a-twist\">Power Sector Mutual Funds in India: A Traditional Play With a Twist<\/a><\/li><li><a href=\"#why-2026-is-a-game-changer-for-renewable-energy-investments\">Why 2026 Is a Game-Changer for Renewable Energy Investments<\/a><\/li><li><a href=\"#how-to-choose-the-best-green-energy-mutual-funds-for-investing\">How to Choose the Best Green Energy Mutual Funds for Investing<\/a><\/li><li><a href=\"#how-to-start-investing-in-green-energy-mutual-funds\">How to Start Investing in Green Energy Mutual Funds<\/a><\/li><li><a href=\"#benefits-of-investing-in-clean-energy-mutual-funds-2025\">Benefits of Investing in Clean Energy Mutual Funds 2026<\/a><\/li><li><a href=\"#how-returns-are-calculated-in-green-energy-mutual-funds\">How Returns Are Calculated in Green Energy Mutual Funds?<\/a><\/li><li><a href=\"#taxation-on-renewable-energy-mutual-funds-as-per-the-2024-budget\">Taxation on Renewable Energy Mutual Funds as Per the 2024 Budget<\/a><\/li><li><a href=\"#conclusion-and-future-outlook\">Conclusion and Future Outlook<\/a><\/li><li><a href=\"#\u2753-fa-qs\">Frequently Asked Questions<\/a><ul><\/ul><\/li><\/ul><\/nav><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"top-green-energy-mutual-funds-in-india-2026\"><strong>Top Green Energy Mutual Funds in India 202<\/strong>6<\/h2>\n\n\n\n<p>Listed below are the top-performing funds in India based on <a href=\"https:\/\/lakshmishree.com\/blog\/what-is-aum-in-mutual-funds\/\">Assets Under Management<\/a> (AUM) \u2014 a key indicator of fund popularity and trust among investors.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Green Energy Mutual Funds in India<\/strong><\/td><td><strong>AUM (\u20b9 Crores)<\/strong><\/td><\/tr><tr><td>1. ICICI Prudential Energy Opportunities Fund Direct - Growth<\/td><td><strong>\u20b99,828.30 Cr<\/strong><\/td><\/tr><tr><td>2. SBI Energy Opportunities Fund Direct - Growth<\/td><td><strong>\u20b99,128.58 Cr<\/strong><\/td><\/tr><tr><td>3. DSP Natural Resources and New Energy Fund Direct - Growth<\/td><td><strong>\u20b91,572.72 Cr<\/strong><\/td><\/tr><tr><td>4. Tata Resources &amp; Energy Fund Direct - Growth<\/td><td><strong>\u20b91,222.10 Cr<\/strong><\/td><\/tr><tr><td>5. Baroda BNP Paribas Energy Opportunities Fund Direct - Growth<\/td><td><strong>\u20b9717.52 Cr<\/strong><\/td><\/tr><tr><td>6. Kotak Energy Opportunities Fund Direct - Growth<\/td><td><strong>\u20b9265.39 Cr<\/strong><\/td><\/tr><tr><td>7.ICICI Prudential Strategic Metal and Energy Equity FoF Fund Direct - Growth<\/td><td><strong>\u20b9128.01 Cr<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><em>These funds focus on sectors like renewable energy, natural resources, and energy innovation, offering exposure to India\u2019s clean power future.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"about-best-renewable-energy-mutual-funds\"><strong>About Best Renewable Energy Mutual Funds<\/strong><\/h2>\n\n\n\n<p>These mutual funds focus on sectors like renewable energy, clean technology, and energy <a href=\"https:\/\/lakshmishree.com\/blog\/best-infrastructure-mutual-funds\/\">infrastructure <\/a>\u2014 areas that are expected to see massive growth in the coming years. Here\u2019s a quick look at some of the best green energy mutual funds available in India:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"1-icici-prudential-energy-opportunities-fund-direct-growth\"><strong>1. ICICI Prudential Energy Opportunities Fund Direct - Growth<\/strong><\/h3>\n\n\n\n<p>Launched in 2024, this fund focuses on companies shaping India\u2019s energy future, including those in renewable and clean energy sectors. With the highest <a href=\"https:\/\/lakshmishree.com\/blog\/what-is-aum-in-mutual-funds\/\">AUM <\/a>in this category, it's quickly becoming a favorite among investors looking for exposure to green energy mutual funds. Its balanced <a href=\"https:\/\/lakshmishree.com\/blog\/portfolio-diversification-meaning\/\">portfolio <\/a>and efficient cost structure make it a strong option for <a href=\"https:\/\/lakshmishree.com\/blog\/best-long-term-stocks-to-invest-in-india\/\">long-term investors.<\/a> This fund is strategically positioned to benefit from the<strong> Union Budget 2026 focus on Railway Capex of \u20b92.75 - \u20b92.8 Trillion<\/strong>, which drives massive demand for industrial electrification.<\/p>\n\n\n\n<p>Key Details:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Inception Date: 22 July 2024<\/li>\n\n\n\n<li>NAV: \u20b910.11<\/li>\n\n\n\n<li>Expense Ratio: 0.58%<\/li>\n\n\n\n<li>AUM: \u20b99,828.30 Cr<\/li>\n\n\n\n<li>Exit Load: 1% if redeemed within 3 months<\/li>\n\n\n\n<li>1-Year Returns: 11.59%<\/li>\n\n\n\n<li>Risk Level: Very High<\/li>\n\n\n\n<li>Minimum Investment: \u20b95,000<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"2-sbi-energy-opportunities-fund-direct-growth\"><strong>2. SBI Energy Opportunities Fund Direct - Growth<\/strong><\/h3>\n\n\n\n<p>This is a powerful addition to the space of renewable energy mutual funds in India, backed by SBI\u2019s trusted fund management. It targets clean and traditional energy firms, with strong short-term performance and growing investor interest. Its slightly higher <a href=\"https:\/\/m.economictimes.com\/definition\/exit-load\" target=\"_blank\" rel=\"noopener\">exit load<\/a> suggests a strategy suited for long-term holding.The accelerated <strong>Kavach Safety System rollout announced in the latest budget is expected to provide significant tailwinds for the energy-heavy infrastructure firms in this portfolio<\/strong>..&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<p>Key Details:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Inception Date: 26 February 2024<\/li>\n\n\n\n<li>NAV: \u20b910.35<\/li>\n\n\n\n<li>Expense Ratio: 0.81%<\/li>\n\n\n\n<li>AUM: \u20b99,128.58 Cr<\/li>\n\n\n\n<li>Exit Load: 1% if redeemed within 30 days<\/li>\n\n\n\n<li>1-Year Returns: 8.69%<\/li>\n\n\n\n<li>Risk Level: Very High<\/li>\n\n\n\n<li>Minimum Investment: \u20b95,000<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"3-dsp-natural-resources-and-new-energy-fund-direct-growth\"><strong>3. DSP Natural Resources and New Energy Fund Direct - Growth<\/strong><\/h3>\n\n\n\n<p>This fund has a legacy in the natural resources and green energy space, combining traditional commodities with emerging renewable tech. Though its recent returns are modest, it offers <a href=\"https:\/\/lakshmishree.com\/blog\/portfolio-diversification-meaning\/\">diversification<\/a> across energy types, making it a conservative entry point for renewable energy-focused investors.<strong> As the government pushes for 100% electrification of the broad-gauge network, the natural resources and metals held by this fund remain vital for new power transmission corridors<\/strong>.<\/p>\n\n\n\n<p>Key Details:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Inception Date: 31 December 2012<\/li>\n\n\n\n<li>NAV: \u20b9115.46<\/li>\n\n\n\n<li>Expense Ratio: 0.87%<\/li>\n\n\n\n<li>AUM: \u20b91,572.72 Cr<\/li>\n\n\n\n<li>Exit Load: No charges<\/li>\n\n\n\n<li>1-Year Returns: 28.30%<\/li>\n\n\n\n<li>Risk Level: Very High<\/li>\n\n\n\n<li>Minimum Investment: \u20b9100<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"4-tata-resources-energy-fund-direct-growth\"><strong>4. Tata Resources &amp; Energy Fund Direct - Growth<\/strong><\/h3>\n\n\n\n<p>Managed by one of India\u2019s most trusted business groups, this fund blends resource and energy-based investments including green energy companies. It\u2019s ideal for investors seeking a mix of steady growth and exposure to clean power assets within a broader energy theme.<strong>With the Union Budget 2026 prioritizing decongestion and track doubling, Tata\u2019s infrastructure-aligned holdings are set to witness stable revenue visibility.<\/strong><\/p>\n\n\n\n<p>Key Details:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Inception Date: 28 December 2015<\/li>\n\n\n\n<li>NAV: \u20b953.15<\/li>\n\n\n\n<li>Expense Ratio: 0.53%<\/li>\n\n\n\n<li>AUM: \u20b91,222.10 Cr<\/li>\n\n\n\n<li>Exit Load: 0.25% if redeemed within 30 days<\/li>\n\n\n\n<li>1-Year Returns: 15.21%<\/li>\n\n\n\n<li>Risk Level: Very High<\/li>\n\n\n\n<li>Minimum Investment: \u20b95,000<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"5-baroda-bnp-paribas-energy-opportunities-fund-direct-growth\"><strong>5. Baroda BNP Paribas Energy Opportunities Fund Direct - Growth<\/strong><\/h3>\n\n\n\n<p>A new entrant launched in 2025, this fund aims to capture growth in India's clean and renewable energy space, targeting futuristic companies in solar, wind, and energy infrastructure. With a low entry barrier and fresh <a href=\"https:\/\/lakshmishree.com\/blog\/what-is-nav-net-asset-value-in-mutual-funds\/\">NAV<\/a>, it\u2019s gaining traction among new investors looking for green energy mutual fund options.<strong>The focus on advanced signaling systems in the FY26 budget complements this fund's objective of investing in energy-efficient transportation and logistics.<\/strong><\/p>\n\n\n\n<p>Key Details:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Inception Date: 10 February 2025<\/li>\n\n\n\n<li>NAV: \u20b911.13<\/li>\n\n\n\n<li>Expense Ratio: 1.01%<\/li>\n\n\n\n<li>AUM: \u20b9717.52 Cr<\/li>\n\n\n\n<li>Exit Load: 1% for excess units redeemed within 1 year<\/li>\n\n\n\n<li>Returns Since Launch: 13.39%<\/li>\n\n\n\n<li>Risk Level: Very High<\/li>\n\n\n\n<li>Minimum Investment: \u20b91,000<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"6-kotak-energy-opportunities-fund-direct-growth\"><strong>6. Kotak Energy Opportunities Fund Direct - Growth<\/strong><\/h3>\n\n\n\n<p>This low-cost fund is ideal for first-time investors looking to enter the renewable energy mutual fund market. Though it's new, its focus on next-gen energy companies makes it a promising choice for the future. The \u20b9100 minimum investment also makes it very beginner-friendly. <strong>The planned \u20b92.8 Trillion capex for railways acts as a strong signal of commitment for the new-age technology suppliers that form part of this fund\u2019s thematic focus.<\/strong><\/p>\n\n\n\n<p>Key Details:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Inception Date: 25 April 2025<\/li>\n\n\n\n<li>NAV: \u20b99.875<\/li>\n\n\n\n<li>Expense Ratio: 0.92%<\/li>\n\n\n\n<li>AUM: \u20b9265.39 Cr<\/li>\n\n\n\n<li>Exit Load: 0.5% if redeemed within 90 days<\/li>\n\n\n\n<li>3-Month Returns: 7.90%<\/li>\n\n\n\n<li>Risk Level: Very High<\/li>\n\n\n\n<li>Minimum Investment: \u20b9100<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"7-icici-prudential-strategic-metal-and-energy-equity-fo-f-fund-direct-growth\"><strong>7. ICICI Prudential Strategic Metal and Energy Equity FoF Fund Direct - Growth<\/strong><\/h3>\n\n\n\n<p>This fund offers a unique blend of strategic metals and energy themes, including renewable energy exposure through a fund-of-funds (FoF) structure. It\u2019s suitable for investors looking to diversify beyond just power or clean energy, with global and local asset allocation.<strong> Strategic metals are a core component of the electronic backbone required for the massive Kavach rollout, making this fund a unique play on 2026 rail safety upgrades.<\/strong><\/p>\n\n\n\n<p>Key Details:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Inception Date: 2 February 2022<\/li>\n\n\n\n<li>NAV: \u20b927.58<\/li>\n\n\n\n<li>Expense Ratio: 1.49%<\/li>\n\n\n\n<li>AUM: \u20b9128.01 Cr<\/li>\n\n\n\n<li>Exit Load: 1% if redeemed within 1 year<\/li>\n\n\n\n<li>1-Year Returns: 79.12%<\/li>\n\n\n\n<li>Risk Level: Very High<\/li>\n\n\n\n<li>Minimum Investment: \u20b91,000<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-are-green-energy-mutual-funds\"><strong>What Are Green Energy Mutual Funds?<\/strong><\/h2>\n\n\n\n<p>Green energy mutual funds are investment funds that focus only on companies involved in clean and renewable energy. These can include sectors like solar power, wind energy, hydropower, electric vehicles, and clean battery technologies. Instead of investing in oil, coal, or gas-related firms, these funds put your money into businesses that are working to reduce pollution and fight climate change.<\/p>\n\n\n\n<p>For example, many green energy mutual funds invest in companies such as Adani Green Energy, ReNew Power, and NTPC\u2019s renewable arm. Globally, the renewable energy market is expected to grow by over 8% annually between 2024 and 2030, and India is a key player in this shift. In fact, India aims to reach 500 GW of renewable energy capacity by 2030, which opens up long-term opportunities for investors.&nbsp;<\/p>\n\n\n\n<p><strong><em>*The Union Budget 2026's emphasis on green corridors ensures that the power evacuation infrastructure remains a top priority for the companies in this segment.<\/em><\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img fetchpriority=\"high\" decoding=\"async\" width=\"909\" height=\"280\" src=\"https:\/\/lakshmishree.com\/blog\/wp-content\/uploads\/2025\/05\/image-5.jpeg\" alt=\"\" class=\"wp-image-13776\" srcset=\"https:\/\/lakshmishree.com\/blog\/wp-content\/uploads\/2025\/05\/image-5.jpeg 909w, https:\/\/lakshmishree.com\/blog\/wp-content\/uploads\/2025\/05\/image-5-752x232.jpeg 752w, https:\/\/lakshmishree.com\/blog\/wp-content\/uploads\/2025\/05\/image-5-768x237.jpeg 768w, https:\/\/lakshmishree.com\/blog\/wp-content\/uploads\/2025\/05\/image-5-150x46.jpeg 150w\" sizes=\"(max-width: 909px) 100vw, 909px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"power-sector-mutual-funds-in-india-a-traditional-play-with-a-twist\"><strong>Power Sector Mutual Funds in India: A Traditional Play With a Twist<\/strong><\/h2>\n\n\n\n<p>Before green energy mutual funds gained traction, power sector mutual funds in India were already popular among investors looking to tap into the country\u2019s electricity and infrastructure growth. These funds usually invest in companies involved in the generation, transmission, and distribution of electricity, including big names like Power Grid Corporation, NTPC, Tata Power, and Reliance Infrastructure.<\/p>\n\n\n\n<p>However, these funds often have a large portion of their investments in thermal power or fossil-fuel-based utilities, which means they carry exposure to carbon-intensive industries. This makes them more vulnerable to policy changes, environmental regulations, and global ESG trends.<\/p>\n\n\n\n<p>The twist? Some traditional power sector funds are now slowly adapting, adding renewable companies into their portfolio mix. But still, most power sector mutual funds aren\u2019t fully aligned with the clean energy transition. They may offer <a href=\"https:\/\/lakshmishree.com\/blog\/highest-dividend-paying-stocks-in-india\/\">stable dividends<\/a> and moderate growth, but they lack the future-focused vision that energy mutual funds bring to the table.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"why-2026-is-a-game-changer-for-renewable-energy-investments\">Why 2026 Is a Game-Changer for Renewable Energy Investments<\/h2>\n\n\n\n<p>The year 2026 is expected to be a major turning point for India\u2019s energy sector \u2014 especially for renewable energy investments. With strong government support, rising climate awareness, and major global funding flowing into clean energy, investors are getting serious about the long-term growth of this sector.<\/p>\n\n\n\n<p>Here\u2019s why 2026 stands out:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Massive government push: India\u2019s renewable energy capacity is expected to hit 280 GW by 2026, driven by central schemes like the PM Surya Ghar Muft Bijli Yojana and FAME-III for electric vehicles.<br><\/li>\n\n\n\n<li>Global climate pressure: India is committed to reaching net zero emissions by 2070, and the renewable energy sector plays a critical role in meeting this goal.<br><\/li>\n\n\n\n<li>Foreign Institutional Investors (FIIs) are bullish: Big global players are investing in Indian green energy firms, which adds strength and stability to the mutual fund ecosystem.<br><\/li>\n\n\n\n<li>Cost of renewable tech is dropping: Solar panels and battery storage are cheaper than ever, increasing adoption across both rural and urban areas.<br><\/li>\n\n\n\n<li>Rise in ESG investing: More Indian investors now prefer companies that follow sustainable practices, increasing demand for green energy mutual funds.<br><\/li>\n\n\n\n<li>The Union Budget 2026 has introduced a transformative focus on Railway Capex (\u20b92.75 - \u20b92.8 Trillion) and the Kavach Safety System rollout, creating a new high-growth demand center for the energy sector.<\/li>\n<\/ul>\n\n\n\n<p>These trends are creating a unique opportunity where profit meets purpose \u2014 making 2026 a year where clean energy investing becomes mainstream for Indian investors.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"1024\" height=\"1024\" src=\"https:\/\/lakshmishree.com\/blog\/wp-content\/uploads\/2025\/05\/Green-energy-Mutual-Funds-In-2026.jpg\" alt=\"\" class=\"wp-image-13778\" srcset=\"https:\/\/lakshmishree.com\/blog\/wp-content\/uploads\/2025\/05\/Green-energy-Mutual-Funds-In-2026.jpg 1024w, https:\/\/lakshmishree.com\/blog\/wp-content\/uploads\/2025\/05\/Green-energy-Mutual-Funds-In-2026-421x421.jpg 421w, https:\/\/lakshmishree.com\/blog\/wp-content\/uploads\/2025\/05\/Green-energy-Mutual-Funds-In-2026-768x768.jpg 768w, https:\/\/lakshmishree.com\/blog\/wp-content\/uploads\/2025\/05\/Green-energy-Mutual-Funds-In-2026-45x45.jpg 45w, https:\/\/lakshmishree.com\/blog\/wp-content\/uploads\/2025\/05\/Green-energy-Mutual-Funds-In-2026-96x96.jpg 96w, https:\/\/lakshmishree.com\/blog\/wp-content\/uploads\/2025\/05\/Green-energy-Mutual-Funds-In-2026-150x150.jpg 150w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"how-to-choose-the-best-green-energy-mutual-funds-for-investing\"><strong>How to Choose the Best Green Energy Mutual Funds for Investing<\/strong><\/h2>\n\n\n\n<p>Choosing the right mutual fund is key to getting solid returns while supporting India\u2019s clean energy mission. Here\u2019s how you can pick the best green energy mutual funds for your investment goals:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Check the fund's objective: Make sure the fund clearly focuses on renewable and green energy companies, not just general <a href=\"https:\/\/lakshmishree.com\/blog\/best-infrastructure-mutual-funds\/\">infrastructure<\/a> or power.<\/li>\n\n\n\n<li>Review past performance: Look at 1-year, 3-year, and 5-year returns. While past performance isn\u2019t a guarantee, it shows how the fund has handled market ups and downs.<\/li>\n\n\n\n<li>Know the fund house: Go with trusted AMCs (Asset Management Companies) like SBI, ICICI, or Tata with experience in sectoral and ESG-based investing.<\/li>\n\n\n\n<li>Look at portfolio holdings: Scan the top holdings \u2014 funds should include names in <a href=\"https:\/\/lakshmishree.com\/blog\/best-solar-energy-stocks-in-india\/\">solar<\/a>, wind, battery tech, <a href=\"https:\/\/lakshmishree.com\/blog\/best-ev-stocks-in-india\/\">electric vehicles<\/a>, or clean energy infra.<\/li>\n\n\n\n<li><a href=\"https:\/\/lakshmishree.com\/blog\/what-is-expense-ratio-in-mutual-funds\/\">Expense ratio<\/a> matters: Lower expense ratios mean more of your money stays invested. Try to pick funds with reasonable fees under 2%.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"how-to-start-investing-in-green-energy-mutual-funds\"><strong>How to Start Investing in Green Energy Mutual Funds<\/strong><\/h2>\n\n\n\n<p>One of the easiest and most investor-friendly ways to begin is through <a href=\"https:\/\/lakshmishree.com\/\">Lakshmishree<\/a>, a rising stockbroker platform that gives direct access to mutual funds.<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Open a Free Demat Account<br>\u2013 Visit <a href=\"https:\/\/lakshmishree.com\/\">Lakshmishree\u2019s official website<\/a> or download the Shree Varahi app on Android or iOS. The account opening process is paperless and takes only a few minutes.<\/li>\n\n\n\n<li>Login and Navigate to \"Mutual Funds\" Section<br>\u2013 Once you're inside the app, head straight to the \u201cMutual Funds\u201d tab.<\/li>\n\n\n\n<li>Search for Green Energy Mutual Funds<br>\u2013 Type in fund names like <em>Tata ESG Fund<\/em>, <em>ICICI Prudential Green Energy Fund<\/em>, or others aligned with clean energy and sustainability.<\/li>\n\n\n\n<li>Choose <a href=\"https:\/\/lakshmishree.com\/blog\/systematic-investment-plan-sip\/\">SIP<\/a> or <a href=\"https:\/\/lakshmishree.com\/blog\/best-mutual-funds-for-lumpsum-investment\/\">Lump Sum<br><\/a>\u2013 Select your investment type, set the amount, and complete the process securely.<\/li>\n<\/ol>\n\n\n\n<p>With Lakshmishree, you're not just investing \u2014 you're getting access to expert-backed insights and a platform built for smooth, hassle-free mutual fund investments.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"909\" height=\"280\" src=\"https:\/\/lakshmishree.com\/blog\/wp-content\/uploads\/2025\/05\/image-4.jpeg\" alt=\"\" class=\"wp-image-13775\" srcset=\"https:\/\/lakshmishree.com\/blog\/wp-content\/uploads\/2025\/05\/image-4.jpeg 909w, https:\/\/lakshmishree.com\/blog\/wp-content\/uploads\/2025\/05\/image-4-752x232.jpeg 752w, https:\/\/lakshmishree.com\/blog\/wp-content\/uploads\/2025\/05\/image-4-768x237.jpeg 768w, https:\/\/lakshmishree.com\/blog\/wp-content\/uploads\/2025\/05\/image-4-150x46.jpeg 150w\" sizes=\"(max-width: 909px) 100vw, 909px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"benefits-of-investing-in-clean-energy-mutual-funds-2025\"><strong>Benefits of Investing in Clean Energy Mutual Funds <\/strong>2026<\/h2>\n\n\n\n<p>With India's focus on renewable energy growing stronger in 2026, these funds give investors a chance to support the transition to a greener economy while building their own wealth.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Future-ready portfolio: Green energy is one of the fastest-growing sectors in India, offering long-term potential as demand for sustainable power increases.<\/li>\n\n\n\n<li>Strong government backing: Policies and subsidies supporting <a href=\"https:\/\/lakshmishree.com\/blog\/best-solar-energy-stocks-in-india\/\">solar<\/a>, wind, EVs, and clean tech make the sector more stable and attractive for investors.<\/li>\n\n\n\n<li>Aligned with global trends: As ESG (Environmental, Social, Governance) investing gains popularity, green mutual funds are becoming a go-to for global and Indian investors alike.<\/li>\n\n\n\n<li>Tax efficiency: Many equity-based green mutual funds qualify for <a href=\"https:\/\/lakshmishree.com\/blog\/long-term-capital-gains-tax\/\">long-term capital gains tax<\/a> benefits, especially if held for more than a year.<\/li>\n\n\n\n<li>SIP flexibility: These funds allow you to invest small amounts regularly, helping reduce risk and grow wealth over time.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"how-returns-are-calculated-in-green-energy-mutual-funds\"><strong>How Returns Are Calculated in Green Energy Mutual Funds?<\/strong><\/h2>\n\n\n\n<p>Returns in green energy mutual funds are calculated just like any other mutual fund \u2014 by tracking the change in the fund\u2019s <a href=\"https:\/\/lakshmishree.com\/blog\/what-is-nav-net-asset-value-in-mutual-funds\/\">Net Asset Value<\/a> (NAV) over time. But since these funds invest in a specific theme (renewable energy), the performance also depends on how well the clean energy sector performs in the market.<\/p>\n\n\n\n<p>Here\u2019s how it works in simple terms:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>NAV-Based Return Calculation<br>\u2013 Let\u2019s say you invested \u20b910,000 when the NAV was \u20b950. If the NAV increases to \u20b960 in a year, your return is:<br>(60 - 50) \/ 50 \u00d7 100 = 20%<br>That means your \u20b910,000 has now grown to \u20b912,000.<\/li>\n\n\n\n<li>CAGR (Compounded Annual Growth Rate)<br>\u2013 If you're investing for 2\u20133 years or more, the fund\u2019s <a href=\"https:\/\/www.investopedia.com\/terms\/c\/cagr.asp#:~:text=The%20compound%20annual%20growth%20rate%20is%20the%20rate%20of%20return,of%20the%20investment&#039;s%20life%20span.\" target=\"_blank\" rel=\"noopener\">CAGR<\/a> shows your average annual return, accounting for compounding over the years.<\/li>\n\n\n\n<li>XIRR for SIPs<br>\u2013 If you\u2019re investing through SIPs (monthly), returns are calculated using <a href=\"https:\/\/cleartax.in\/s\/xirr-mutual-funds\" target=\"_blank\" rel=\"noopener\">XIRR (Extended Internal Rate of Return)<\/a>, which adjusts for different investment dates and amounts.<\/li>\n\n\n\n<li>Market Impact<br>\u2013 Returns also depend on how the green energy sector performs \u2014 policy changes, company profits, and global trends in clean tech all play a role.<\/li>\n<\/ul>\n\n\n\n<p>So, while past returns give an idea, remember that green energy mutual funds are market-linked, and returns can go up or down. That\u2019s why long-term holding and SIP investing are recommended.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"taxation-on-renewable-energy-mutual-funds-as-per-the-2024-budget\"><strong>Taxation on Renewable Energy Mutual Funds as Per the 2024 Budget<\/strong><\/h2>\n\n\n\n<p>When you earn profits from selling your mutual fund units, those gains are taxable. As per the Union Budget 2024, the tax rules for renewable energy mutual funds (mostly equity or hybrid equity funds) have been updated.<\/p>\n\n\n\n<p>Here\u2019s a simple breakdown:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/lakshmishree.com\/blog\/short-term-capital-gain-tax\/\">Short-Term Capital Gains (STCG)<\/a> \u2013 If you sell the fund within 1 year, your gains are taxed at 20% STCG.<\/li>\n\n\n\n<li><a href=\"https:\/\/lakshmishree.com\/blog\/long-term-capital-gains-tax\/\">Long-Term Capital Gains (LTCG)<\/a> \u2013 If you sell the fund after 1 year, your gains are taxed at 12.5% LTCG.<\/li>\n<\/ul>\n\n\n\n<p><em>Example: If you invest \u20b91 lakh in a green energy fund and make \u20b920,000 profit in 14 months, you\u2019ll pay \u20b92,500 as LTCG tax (12.5% of \u20b920,000)<\/em>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"conclusion-and-future-outlook\">Conclusion and Future Outlook<\/h2>\n\n\n\n<p>India's green energy sector has achieved \"operational maturity\" by January 2026, driven by capacity growth, improved discom finances, and a massive \u20b92.8 trillion government infrastructure investment. Green energy mutual funds demonstrate resilience through strategic diversification. While transmission gridlock and land acquisition persist, targeted budgetary support mitigates risks. For 2026 investors, \"Grid Reliability\" and \"System Integration\" are key alpha drivers, supported by structural tailwinds like the Draft National Electricity Policy 2026 targets and Indian Railways' electrification. The convergence of \"profit and purpose\" solidifies the exceptional outlook for green energy mutual funds.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"\u2753-fa-qs\"><strong><strong>Frequently Asked Questions<\/strong><\/strong><\/h2>\n\n\n<div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-question-1747128494907\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>Which are the best green energy mutual funds in India for 2026?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>As of January 2026, the top-performing funds by Assets Under Management (AUM) are the <strong>ICICI Prudential Energy Opportunities Fund<\/strong> (\u20b99,828.30 Cr) and the <strong>SBI Energy Opportunities Fund<\/strong> (\u20b99,128.58 Cr). For investors seeking high trailing returns, the <strong>DSP Natural Resources and New Energy Fund<\/strong> has delivered a 1-year return of <strong>28.30%<\/strong> as of late January 2026.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1747128513403\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>How does the Union Budget 2026 affect railway and energy stocks?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>The Union Budget 2026-27 has earmarked a massive capital expenditure (Capex) of <strong>\u20b92.75 trillion to \u20b92.8 trillion<\/strong> for Indian Railways. This 10-12% increase in allocation is a significant driver for energy stocks, particularly those involved in industrial electrification, track doubling, and the expansion of the <strong>Kavach safety system<\/strong>.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1747128528666\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>What is the current status of the Kavach safety system rollout in 2026?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>By January 2026, the <strong>Kavach Version 4.0<\/strong> has been successfully commissioned on approximately <strong>738 route km<\/strong>, with a major focus on the Delhi-Mumbai and Delhi-Howrah corridors. The government has invited bids for equipping an additional <strong>9,069 locomotives<\/strong>, creating a robust order pipeline for technology and energy equipment suppliers.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1747128567200\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>What is the tax rate for green energy mutual funds in FY 2025-26?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Equity-oriented green energy funds are subject to the following tax rules:<br \/><strong>Short-Term Capital Gains (STCG):<\/strong> <strong>20%<\/strong> if units are sold within one year of investment.<br \/><strong>Long-Term Capital Gains (LTCG):<\/strong> <strong>12.5%<\/strong> for gains exceeding \u20b91.25 lakh in a financial year, provided the units are held for more than 12 months.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1747128579242\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>Has India reached its 500 GW renewable energy target in 2026?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>India has officially achieved the milestone of having over <strong>50%<\/strong> of its cumulative installed power capacity from non-fossil fuel sources by early 2026, reaching the <strong>500 GW<\/strong> mark five years ahead of the initial 2030 target. In the 2025 calendar year alone, India added a record-breaking <strong>44.5 GW<\/strong> of renewable capacity.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1769688971843\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \">What are the risks of investing in energy thematic funds in 2026?<\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Thematic energy funds are classified as <strong>\"Very High Risk\"<\/strong> because they lack the sector diversification of regular equity funds. They are highly sensitive to government policy shifts, infrastructure evacuation constraints, and the rising costs of energy storage systems like <strong>BESS<\/strong>. Analysts suggest an investment horizon of <strong>7+ years<\/strong> to navigate the volatility of this sector.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n<pre class=\"wp-block-code\"><code><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-red-color\"><em><strong>Disclaimer:<\/strong> This article is intended for educational purposes only. Please note that the data related to the mentioned companies may change over time. The securities referenced are provided as examples and should not be considered as recommendations.<\/em><\/mark><\/code><\/pre>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>India\u2019s energy needs are growing fast, and at the same time, there\u2019s a serious push to move away from coal and fossil fuels. This shift has created new opportunities for investors who want to support clean power sources like solar, wind, and hydro. That\u2019s where green energy mutual funds come in \u2014 they focus on [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":12521,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[269],"tags":[661],"class_list":["post-12512","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-basics","tag-best-green-energy-mutual-funds"],"_links":{"self":[{"href":"https:\/\/lakshmishree.com\/blog\/wp-json\/wp\/v2\/posts\/12512","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lakshmishree.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lakshmishree.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lakshmishree.com\/blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/lakshmishree.com\/blog\/wp-json\/wp\/v2\/comments?post=12512"}],"version-history":[{"count":5,"href":"https:\/\/lakshmishree.com\/blog\/wp-json\/wp\/v2\/posts\/12512\/revisions"}],"predecessor-version":[{"id":13783,"href":"https:\/\/lakshmishree.com\/blog\/wp-json\/wp\/v2\/posts\/12512\/revisions\/13783"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lakshmishree.com\/blog\/wp-json\/wp\/v2\/media\/12521"}],"wp:attachment":[{"href":"https:\/\/lakshmishree.com\/blog\/wp-json\/wp\/v2\/media?parent=12512"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lakshmishree.com\/blog\/wp-json\/wp\/v2\/categories?post=12512"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lakshmishree.com\/blog\/wp-json\/wp\/v2\/tags?post=12512"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}