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Renewable Energy: an Investment Guide

November 15, 2016 8:40 pm Category: Latest News, Research & Finance A+ / A-
More and more renewable firms are listing on global markets

More and more renewable firms are listing on global markets

by Ben Barlow

A Guide to Investing in Renewable Energy Companies

The stock market offers a plethora of investment opportunities for traders to increase their personal wealth. A lot of these can involve buying shares in and backing a company that may not meet with your ethical beliefs but will lead to a profit. For those who this is a real concern, consider investing in some of the many renewable energy companies available. The global energy market is valued at over $7 trillion, and given that we all need many sorts of energy to live our daily lives, it’s not something that risks disappearing.

Reasons to Invest in Renewable Energy

There are many reasons to invest in renewable energy, whether it’s something you are passionate about or just want to make the most of its increasing value. For example, the wind tower market is expected to breach $19 billion by 2019, offering a great chance to boost your profits while doing the environment some good.

The demand for energy is forecast to grow faster than actual consumption, and with more individuals and companies seeking ethical, clean options, renewable energy offers a good projected investment. There are options to diversify investments, across solar, wind and other sectors, plus there are a range of new and established stocks to back.

How to Invest in Energy

S&P 500 Energy index is a good place to begin your search for energy companies to invest in. This not only provides the performance of the sector, but individual stocks’ that can be broken down and analysed to find the best ones that suit your needs.

There are various ways to invest in renewable energy. From ETFs and futures, to CFDs and share trading at IG, depending on your trading strategy, choose the best method for you. Those unsure about how much and the best way to invest based on their circumstances will be best speaking to a financial advisor beforehand.

Renewable Energy Technologies to Consider

There are many established and emerging renewable energy technologies that are set to become more prominent in the coming years. Investing in any of these should lead to profit and a cleaner environment in the future.

Wind Towers and Turbines

As mentioned, the wind tower market is growing rapidly. Now is the perfect time to capitalise as the advancing technology behind wind towers and turbines continues to evolve. Ten manufacturers possess around three-quarters of all the installations generating wind power in the world, each set to offer great returns on investment.

German powerhouse Siemens and General Electric control about one fifth of the market, but both have other interests. Vestas are a Danish company whose sole purpose is to manufacture wind turbines, and have a 10% market share, making them possibly the best option to back.

More Efficient Solar Panels.

Solar power is becoming cheaper and more common. Light-sensitive nanoparticles have been the latest breakthrough, which are a cheaper, more expensive and effective material for solar cells, as at the moment most solar panels are only around 15% efficient.

There are various solar companies on the stock market, with First Solar Inc., (NASDAQ: FSLR) operating some of the largest photovoltaic plants across the globe. This makes them a fairly safe investment option with analysts predicting they will increase.

Electric Car Charging

Electric cars are on the rise everywhere, and while investing in the car manufacturers’ stocks is one idea, a quickly emerging technology and a necessity which goes with the higher number of electric cars, is charging points. These are manufactured by car brands, independent stations and utility companies.

From 2014 to 2020 the number of electric car charging stations are predicted to rise by 11.7 million. Pacific Gas & Electric have stated they will create their own network which will quadruple the number in California alone, offering a great investment opportunity.

Renewable Energy Storage

The number of home solar panels are increasing, which has led to a problem for some who do not need all the energy they are producing. Therefore, energy storing batteries and other technology is being developed, so that it can be used at a later, darker date. AEG Power Solutions are one company developing and offering such technology.

Risks and Opportunities

As with investing in any stocks, there is a lot of risk involved that you need to be aware of. The main way to prevent against losing out is to diversify your investments across a range of renewable energy stocks and shares, and set up a trading plan with risk reduction measures.

Renewable energy is on the rise and there are sure to be many more fresh opportunities popping up on the stock market in the coming years. Don’t just opt for the first one you see, conduct plenty of financial and ethical research before investing in renewable energy companies.


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