Renewable energy is undoubtedly one of the hottest sectors right now for investors to build a camp. As economies embrace cleaner energy solutions to curb greenhouse gas emissions, renewable stocks have identified their position at the top of the energy landscape. According to iShares Global Clean Energy ETF, green stocks rose by 140% in 2020. Although in 2021, the stocks dropped by 16%, the dip should not scare your interest in investing in renewables. There are still convictions that clean power stocks are here to win.
Firstly, there is an infinite growth opportunity in renewable energy. As big corporations pledge to use renewable energy exclusively in their daily operations, the demand for clean power will skyrocket in the next decade. Clean energy projects have one of the most significant funding from governments, and you can see wind farms and solar farms being installed across the world over.
Electric Vehicles are the new trend. Big economies such as China and the United States have laid out policies that will advance battery-powered vehicles’ adoption. Car manufacturers are planning to go fully electric or hybridize their internal combustion engine vehicles to use batteries.
The latest findings by Solar Energy Industries Association and energy consultant Wood Mackenzie projects that about 324gigawatts (GW) of solar power capacity will be rolled out in the United States over the following years. This value will be a threefold increase from the capacity installed in 2020.
Similarly, an International Energy Association report predicts that green energy sources will account for around 95% of the “net increase in global power capacity through 2025”.Investors could tap into solar energy gurus such as Enphase Energy and SolarEdge Technologies.
The two solar giants have recorded consistent revenue growth over the past three years. Enphase is valued at $21 billion, while SolarEdge is worth $14 billion. Another reason to invest in renewable shares is the need to boost your passive income. Dividend-paying stocks help you build wealth without getting much involved with the companies. For instance, Brookfield Renewable Partners give investors a 3.04% forward yield.
Lastly, the favorable environment for clean energy due to the Paris Agreement requirements promises significant growth in the renewables sector. Interest rates are low, and administrations are giving rebates to green startups. The low-interest rates enable companies to improve their finances.
“During 2020, we continued to take advantage of the low-interest environment and executed on $3.4billion of investment-grade financings, extending our average corporate debt maturity to 14 years and reducing our borrowing costs by $5 million per year,” stated Brookfield Renewable Energy in its 2020 fourth-quarter letter to shareholders.https://tramways-monthly.com/