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Looking ahead: Why the Smart Money is Investing in Green Energy

Commodities / Renewable Energy Nov 28, 2018 - 11:44 AM GMT

By: Andrew_Cioffi

Commodities

Tech industry headlines might have been focused on Apple’s recent milestone, whereby they officially became the first company in history to achieve a $1 trillion market capitalization, but the renewable energy sector had its own cause for celebration, also starting with the letter ‘t’.

The news from Bloomberg New Energy Finance (BNEF), the world’s total capacity for energy production through wind and solar has surpassed 1 terawatt, and we might not have to wait too long before we can get to the next terawatt, if the current pace of progress, uptake, and innovation keeps up into the future. As a matter of fact, the BNEF makes the surprisingly upbeat prediction that by the year 2023, we might see this achieved at only 46% of what the first terawatt cost.



The world at large is growing increasingly more aware of and welcoming to the idea and benefits of embracing renewable energy. As usual, where there is growing interest in something, there is an opportunity to invest, and there might never have been a better time to invest in green energy, aside from yesterday, that is. That’s what has so many industry players excited about the prospect of investing in solar energy, wind, and hydro.

The world is growing bigger with each passing day, and its power demands are growing right along with it. It’s expected that we will see our global power requirements jump by about 40% within the coming 20 years, driven primarily by the growth of emerging economies. Fossil fuels such as coal, gas, and oil will, of course, supply the greater part of this massive demand, but the situation will inevitably bring with it a massive increase in the demand for green energy sources.

Why Invest Now?

For the smart investor, getting onto the renewable energy train is a matter of timing it right, and all indications point to the time being now. The market share that renewable energy will command is set to undergo some impressive growth spurts.

Studies tell us that we can expect to see approximately %5.1 trillion’s worth of investment into the sector by the time 2030 rolls around. That isn’t as far away as you might think, especially in investment terms. The guys over at Bloomberg New Energy Finance estimate that by this time, over 60% of the almost 6,000 gigawatts of new generation capacity worldwide. As things stand at the moment, fossil fuel power commands about 64% of power production. That’s not change; that’s a revolution, and there’s a lot of money to be made by betting on the right side.

Solar Energy’s Potential

As things currently stand, it would seem that large-scale hydro-power will be the biggest green energy source in the coming era, but there’s no doubt that solar and wind are set to post some impressive performances. The statistics show that solar and wind combined will constitute almost 16% of the world’s total energy production come 2030, and that’s a big jump from the current 3% they provide.

Investing in solar energy is a priority now for many governments and authorities all over the world, especially in regions whose economies have previously seen large parts of their populations go without proper connection to national power grids. For example, certain parts of Latin America, Africa, or India will actually see their cost of installing rooftop solar panel arrangements to provide their power consumption needs to be a cheaper alternative to seeking connection to power grids. Government initiatives with regard to investing in solar energy are expected to take the form of utility-scale solar power plants capable of powering hundreds, if not thousands, of homes. The technology to achieve this is getting more efficient, accessible, and cost-effective with each passing day.

Renewable Energy Investment Options

For those of us looking to hold a stake in our planet’s power supply stakes, with a focus on renewable energy, the options are plenty. Those thinking of investing in solar energy can take a look at some solid options such as the Guggenheim Solar ETF (TAN). Backers of a wind-powered future can place their bets on the First Trust Global Wind Energy ETF (FAN), while those thinking the future will be water-powered can take up a stake in General Electric Co. (GE), which holds considerable interest in the hydro-power turbine manufacture industry. Whichever way you choose to place your bet, you can be pretty confident that by going green, you’ll be landing in the green.

By Andrew Cioffi

© 2018 Copyright Andrew Cioffi - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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