Investing in Green Energy

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As the demand for energy rises each year, the need for green energy is rising too. The demand for non-renewable energy is coming out of the growth in worldwide energy usage. It’s expected to grow by 40% over the next 20 years. With the expected rise of the renewable energy market, it is more important than ever for investors to look into green energy as a potential investment.

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Renewable Energy Investment

According to a survey done by the American Council for Renewable Energy, many top investors are looking into doubling their investments in the renewable energy sector by 2030. Within the next 12 years, the survey showed that 70% of private investors’ contributions would bring the renewable energy sector to over $500 billion in investments.

In addition to this, over a quarter of investors’ responses showed a collective investment of $1 trillion in renewable energy. The American Council for Renewable Energy set a goal of $1 trillion in U.S. private sector investment in renewable energy. They also hope to use the $1 trillion investment to enable new grid technologies in the U.S. by 2030.

Investors also plan to add to their portfolios by adding technology investments associated with grid advancement, energy storage, and energy transmission. By improving the integration of renewables into the energy sector and supporting market growth, ACORE noted that the investors surveyed saw their investments as a way to add to their funds.

The companies surveyed estimated that the investments in renewable energy would be between $500 billion to $1 trillion. Sixty-seven percent of these companies have plans to increase renewable energy investments in 2018 by over 5%. These companies confirmed that they didn’t intend to reduce their investment in the future. 

Market Drivers

As it continues to generate interest, the renewable energy market is expected to gain more in investments. There are a few main drivers behind the presumed market increase in renewable energy throughout the coming years. The increased support for electric vehicles and renewable energy are expected to be a factor in the market increase.

Additionally, new business models and improved economics will scale up the energy storage market. Financial innovation is another factor contributing to increased investments in green energy. For example, capital stacks (the total amount invested in a company) are expected to replace tax equity as the main source of project financing in the future.

Power Generation: Share Fluctuation

Renewable energy sources will experience a rise in market shares over the next 12 years and will account for over 60% of the 5,579 gigawatts of new generation energy capacity. They will also account for 65% of the $7.7 trillion currently in power investment by 2030. The total share of power generation for fossil fuels and other non-renewable energy sources will drop to 46% by 2030.

Hydropower, solar, and wind energy will rise in power generation shares, with hydropower taking the bigger share of new energy capacity among green energy sources. The Bloomberg report, a news agency specializing in financial news, determined that solar and wind will increase their share of global generation capacity to 16% by 2030, up from their combined share of 3%.

Bloomberg also predicts that emission reductions will play an important role in the power grid’s integration of renewable energy.

Line of green energy solar panels in grass field
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Conclusion: Investing in Green Energy

The renewable energy market is expanding, and investing in green energy could turn into a worthy investment down the road. Top investors are planning to increase their investments in renewable energy and it may be time to follow their lead. 

As fossil fuels are a finite resource, we will have to take up renewable energy at some point. Besides that, there is the issue of climate change, which the use of fossil fuels has only worsened.  If we want to benefit from our investment while working towards a brighter future, then renewable energy is an important investment opportunity.