Is Renewable Energy a good Investment?
The Future is certainly looking very bright for the Renewable Energy sector. As global energy demand continues to grow driven by developing economies it is expected to rise by 40% in the next 20 years, this level of growth will need a staggering amount of Coal, Oil and Gas to satisfy.
However it is not just fossil fuels that will satisfy this growth it will also need to be renewable sources like Wind, Solar, Hydro and biomass.
According to recent studies we are going to see an explosion in Renewable Investment in the coming years. Already, we have seen new records set as Renewable energy attracted $260 billion in investment in 2016 compared to $130 billion in new coal and gas generation, this trend sets a precedent for investment in the coming years.
So how does an investor take advantage of these investment trends?
There are a number of ways that a private investor can invest in renewable energy projects:
1. Buy stocks that are up and coming in the Renewable sector like Solarcity or Tesla which are now producing solar tiles for the roof of your house. Then there are also the more established companies like General Electric (GE) and Siemens who produce wind turbines and software for the energy sector and these companies have been around for a long time. In fact GE made $9billion in profit last year from its renewable energy sector compared to $13billion from its oil & gas sector.
2. There are several bonds/ETF's available which will allow investors to invest in 20 or 30 companies with the hope that the good performances far out weight the sinking ships!
3. Direct Investment, through a company that offers a share or percentage of a renewable energy
project can be very profitable. Getting in this early can reap serious rewards for your portfolio.
Renewable energy is growing all around the world from green energy companies like Tesla leading the technological advances in the first world to practical small scale solar applications in developing economies, renewable energy certainly looks to be the future.
Getting in at the ground level now at a relatively low price point, could show some serious returns in the medium to long term.