Is it time to invest in renewables?

There are several reasons why the renewables sector should be a sound investment now, even if you’re a confirmed climate change denier. When big players like Warren Buffet and Bill Gates are putting their billions into renewables and 1 in 5 dollars are being invested in this area generally, you know that there’s something going on.

Since the climate change agreement at the Paris accord was adopted in 2015, most countries have come on board and are trying to lower carbon emissions by focusing more on renewables and developing innovative technologies.

Yes, the USA under Donald J Trump has decided to withdraw but that doesn’t mean everyone else is going to follow suit – in fact it’s been quite the opposite.

As newly elected French President Emmanuel Macron said following Trump’s fateful speech:

“I do respect this decision but I do think it is an actual mistake both for the US and for our planet…Wherever we live, whoever we are, we all share the same responsibility: make our planet great again.”

Neither does it mean that America will no longer invest in solar, wind and other technology to create greener energy. There are many who believe that the Trump climate denying bandwagon will only have a limited shelf-life anyway.

Many countries are beginning to invest time and billions in a renewables infrastructure, including previously reticent players such as China and India. They see the potential here to create jobs, industry and money. Indeed, China is expecting to put some £292 billion into renewable power by the end of the decade and they may well become the world leader before too long.

Even the UK, where the focus on renewables has been a little shaky in recent times, saw half of its electricity provided by green energy through the middle of June this year. The Tory government were accused of killing off the solar industry by slashing Feed in Tariffs but insiders believe that the industry has a bright future despite a few setbacks. Business minister Greg Clark recently announced that the UK is going to invest heavily in battery and storage technology for energy. According to the government website:

“Known as the Faraday Challenge, the 4-year investment round is a key part of the government’s Industrial Strategy. It will deliver a coordinated programme of competitions that will aim to boost both the research and development of expertise in battery technology.”

For many in the renewables industry this is not before time. There have been calls for money and research to put into storage technology for a while now and it’s largely been ignored.

The People Investing in Renewables

A couple of years ago, it became obvious that serious investors, particularly large corporations, were starting to expand their portfolios to include renewable energy. There has also been a movement in some circles to disinvest from carbon heavy options such as coal and oil. The change has been slow but has given rise to the ethical investor that wants to put their hard-earned cash into those businesses with a sustainable and eco-friendly portfolio.

There is also the suggestion that, rather than being a lot of hype and hot air, green technology is finally beginning to disrupt the energy market and change things for real. A recent report by Morgan Stanley showed that renewables such as solar and wind will be the cheapest source of power across the globe within the next few years.

Investing by Installing

Of course, another way of investing in renewables is to have them installed. For most people, the obvious choice is solar which has come down in cost over recent years. While we may not have the strong Feed in Tariff rates that we had in the past, solar panels still represent a sound investment for the future and can reduce energy costs.

Another option if you don’t want to dabble on the stock market is to choose energy providers that are putting more investment into the renewables. While this used to be the province of smaller utility companies, the big five are also now working to get more of their mix from renewable sources and promoting green energy practices. And major car companies have now stopped developing products that are designed to enhance petrol cars and are beginning to focus more acutely on the electric or hybrid future.

The good news is that investment in renewables is increasing steadily. That could be the real nail in the coffin of the fossil fuel industry over the next few decades – people will simply prefer to put the money in the stocks and shares of companies that helping us lead greener and better lives. And that’s probably why the US, it’s climate change deniers and President Donald J Trump won’t have the impact we first feared.

 

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