5 Ways to Invest in Renewable Energy Companies

by Josh Biggs in Finance on 15th October 2020

The most common ways to invest in renewable energy companies are direct investments, buying shares, investing in ETF, and supporting companies.

Non-renewable energy, mostly fuels, are depleting from planet earth slowly. The impact they are having is pretty severe as global warming has gotten very critical. 

To prevent the use of non-renewable energy, there has been a surprising increase in demand for renewable energies. Solar power, wind power, and hydropower are all very popular, and many countries are switching from coal or fuel-based energy systems to renewable energy systems. So now would be a good idea to invest in these forms of energy.

Why Should You Invest In The First Place?

Investing in renewable energy has many more perks than just protecting the environment. It can even improve our economy. 

That’s definitely amazing, but just like any other sector, you must do proper research before investing. You must be aware of the financial trends and scams. NoBSIMReviews blog posts and other similar sites regularly talk about the newest investment opportunities and whether they are legit.

Let’s take a look at the other reasons why you should invest in renewable energy-

Technological Improvement

Technology has been growing at a fast rate, and the development of the last 20 years surpasses the previous 100 years. 

With this improvement, it has been proven that renewable energy is much more reliable and efficient, and we can create an infinite source for it. 

Increased Job opportunities

As technology and demand rise for renewable energy, many people will start to invest in them, and this will open up a lot of job opportunities for many people. 

Power plants, factories, and industries will need a lot of workers and will open up job opportunities, which is another reason you should invest in them.

In a study, it was found that by the end of 2050, renewable energy sectors will have opened up job opportunities for around 63 million people.

Reliable Resources

Although the technology related to renewable sources of energy is new, it is quite dependable.

When was the last time you heard a solar power plant malfunctioned or a windmill crashed? Yes, there are some reports here and there, but they are very rare. 

This is why it is a good idea to invest in them as they can last even more than 20 years, more than they were signed up for.

Save The Environment & The Economy

We all know and have been taught that non-renewable energies produce a lot of carbon dioxide and other greenhouse gases that warm up the planet earth, and thus, they can eventually make it uninhabitable. 

So, it is of ethical importance that you switch to renewable energy which is less harmful to our planet.

How to Invest In Renewable Energy?

If you think you can invest in renewable energy as you did with non-renewable ones, then you might be partially right. The things you can invest in are somewhat the same; only the methods vary a little. 

Here are some of the best ways of investing in renewable energy-

1. Greenwashing

Even though renewable energies mean they are green and eco-friendly, that is not always the case. This is where you need Greenwashing, a process of how you filter out Green energies that are not actually green. 

Now that the first part is done, let us take a look at the actual investment methods.

2. Direct Investment

This is somewhat for smaller investments which have a lesser room for error and loss. The most common form is investing in a community solar power plant.

Some companies even offer regulated and tradable debt assets, which can be compared to bonds. They are similar in nature, and you can invest through them for any project that generally is contracted for around 20 years.

3. Buying Shares

Direct investments have very little risk and small but guaranteed profit; shares are the opposite. They have a higher risk, but at the same time promise higher rewards. The stock value of these renewable energies can fluctuate very often and by a large difference.

This is why you need to be careful. But if you are up to face the risk to get those high rewards, be sure to invest in pure green renewable energy sources.

4. Invest in Companies That Build Supporting Tools

This is a bit safer option compared to share investment but has better profit than direct investment. So you can say it has the best of both worlds. 

The key is to look for companies that make tools and components for renewable energy, such as solar panels or windmills.

These companies are growing really fast, but some have inadequate funding and need angel investment.

But there is a catch. As these companies depend on the actual application of renewable energy, their values can fluctuate very often, making it quite unpredictable.

5. Exchange-Traded Funds

This is a bit riskier than direct investment and has room for errors. ETF or Exchange Traded Funds is a set of securities that an individual can buy and use in various strategies, somewhat in a similar fashion to mutual funds. 

As there are multiple sets of securities where an individual can invest, it gives them the scope of investing in multiple renewable energy companies. 

The downside is that they will mostly be able to invest in larger companies as they are the ones using better security protocols, which increases the minimum amount of investment by a significant amount.

There is a giant possibility for renewable energy, and with every year, scientists are putting more emphasis on using renewable sources of energy, and many investors are shifting their investment towards it.

Whatever investment method you choose, always remember to run a background check on the company first.

Final Thoughts

The world is badly affected by climate change, and everyone must step up to fight against it. Investors can also play their role by investing in renewable energy sources than non-renewable ones. There are plenty of reasons as to why you should switch to investing in renewable energy, and honestly, by seeing the promises it holds, it can be the best investment decision you make for you and for your planet.

Categories: Finance