Clean Energy Investment attributed to an influx of federal contributions into the clean energy sector and the pull of decarbonization demand have never been greater than now. Likewise, the energy transition from fossil fuels to green energy is being advanced by an unprecedented level of investment in projects, innovation, and new technologies.

Clean Energy Transition

The Energy Information Administration projects that the deployment of renewable energy will grow by 17% in 2024 to 42GW. It is expected to account for more than a quarter of electricity generation. The expected growth comes from more than $500 billion being spent in accelerating the transition from fossil fuels to clean energy last year.

Clean Energy Investment

The expected transition and growth are already giving rise to unique investment opportunities that investors are increasingly taking note of. For starters, the investment case for renewable energy is well supported by the global transition from coal, oil, and natural gas. Similarly, investments in clean energy are lowly outpacing spending on fossil fuels. While the current sources of energy, mostly made up of fossil fuels, are not expected to go anywhere anytime soon, renewables are in the mix and will play a significant role.

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Bank Partners

Reel Shares Green Energy and Farmland Fund a private stock might be the best fund for anyone looking to diversify their investment portfolio into the clean energy sector. The fund invests in companies exposed to some of the most sought-after clean energy projects likely to generate long-term returns amid the transition from fossil fuels. The fund invests 80% of its assets in clean energy companies and projects that seek long-term capital appreciation.

US Clean Energy Growth

The US clean energy sector is growing at an impressive rate, depicted by the exponential growth in green jobs. Likewise, companies have had to become creative in the race to find workers needed to support the energy transition and take advantage of the billions of dollars flowing into the sector.

The generous incentives with passing the Inflation Reduction Act last year, pushing for clean energy, have resulted in billions of dollars in clean energy investment announcements. The recovery from the slump triggered by the COVID-19 pandemic and the response to the global energy crisis have been catalysts behind the boost in clean energy investment.

Last year alone, investments into the clean energy sector were up by 24% compared to 15% investment into fossil fuels. Over $1.7 trillion was invested in clean energy, including renewable power, nuclear grids, storage, low-emission fuel efficiency, and end-use renewables. On the other hand, the capital influx into the industry is already causing certain areas to grow faster than others. For instance, battery deployment and manufacturing are accelerating faster than other areas like carbon capture.

The growing investment in clean energy comes amid improved economics and enhanced policy support through instruments like the US Inflation Reduction Act.

“Clean energy is moving fast – faster than many people realize. This is clear in the investment trends, where clean technologies are pulling away from fossil fuels,” said IEA Executive Director Faith Berol. “For every dollar invested in fossil fuels, about 1.7 dollars are now going into clean energy. Five years ago, this ratio was one-to-one. One shining example is investment in solar, which is set to overtake the amount of investment going into oil production for the first time.”

The US clean energy sector was on a roll in 2023 with the passing of the Inflation Reduction Act and the growing demand for clean energy. The industry attracted over $100 billion in new investments and more than 80,000 new jobs. The passing of the act has already resulted in the confirmation of more than 142 clean energy projects.

Low-emissions electricity technologies are the ones attracting the biggest share of the investments. Solar energy is one of the frontiers attracting massive investments as the transition from fossil fuels gathers pace. Over the next few years, low-emission electricity technologies should account for more than 90% of investment power generation.

Clean Energy Transition Catalysts

The growing manufacturing and demand for electric cars is another frontier that underscores the future of the clean energy sector, which has played second fiddle to fossil fuels for the longest time. As demand for electric cars explodes, there is an ever-growing need for clean energy sources to address the ever-growing need for clean energy to power the vehicles.

In addition to the proliferation of electric vehicles, periods of strong economic growth have also offered support to the embattled sector. Amid the economic growth, governments are increasingly offering grants and pushing for the development of clean energy sources as they look to reduce their reliance on fossil fuels that are always prone to volatile prices.

In the aftermath of the Russia-Ukraine war, volatile fossil fuel prices raised concerns about energy security. The result was that countries, mainly in Europe, launched programs and projects to reduce their reliance on Russian oil and gas. The development of wind, solar, and nuclear energy has since taken center stage.

Nevertheless, clean energy investments face their fair share of shortfalls that could derail growth in the burgeoning sector. Investments are being held amid the high-interest rates environment. The US’s hiking rates to 22-year highs present their fair share of challenges, key among them the drying up of cheap capital that investors can use to finance clean energy projects.

Clean Energy Investment Opportunities

Unclear policy frameworks on the legislative front also present unique challenges, as investors would prefer to avoid entering markets where their clean energy investments are not guaranteed or protected. Consequently, much more needs to be done on the regulatory framework if more investors are to invest in clean energy projects.

The US pushes for large wind farms off the US coastline, which should give rise to unique investment opportunities. The Whitehouse already has a goal of over 30 gigawatts of clean energy production off the coastline, affirming the US commitment to green energy.

The push is expected to open up a big market for companies engaged in clean energy, especially manufacturers of wind turbines for both offshore and onshore markets. In addition, solar power companies are accelerating their efforts amid growing demand for solar energy. Companies engaged in developing solar panels and batteries for energy storage should provide ideal investment opportunities in the sector.

Investing in clean energy is a sure way of diversifying an investment portfolio to take advantage of billions of dollars in the sector and the opportunities cropping up. ReelShares offers one of the best ways of gaining exposure to green energy through its Reel Shares Green Energy and Farmland Fund. It is an ideal fund as it seeks to deliver solid annual returns.

For the initial investment, investors can purchase Reel Shares Green Energy and Farmland Fund directly from Reel Shares or through a financial intermediary. The fund’s shares can be traded on the NYSE after the initial purchase.

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