4 Good Reasons To Invest in Renewable Energy Stocks

The renewable energy business has been one of the fastest-growing industries of the last century. ' Solar and wind power increased fast at the beginning of the century, but investors didn't see much of a return on their investment.

As of 2021, the industry is beginning to establish itself as a viable business entity. As a result of these developments, manufacturers now have a leg up on their competitors, while technology-based firms stand out from the crowd. Here are the four main reasons I'm optimistic about renewable energy equities, given all of the developments in energy over the previous two decades.

There isn't much development in the energy business as a whole. But renewable energy stocks has been flourishing since the turn of the millennium. The graph below illustrates how renewable energy output has changed over the last decade. In terms of renewable energy, you can see that solar energy is expanding the quickest, but the whole industry is also increasing significantly.

For the first time in American history, the nation's primary power source is renewable energy rather than coal. Renewable energy is the first place to go if you're searching for development in the energy business.

Technology

Renewable energy could benefit significantly from technological developments in energy production. Over the last 40 years, the cost of solar panels has dropped by more than 99 percent. Wind, solar, fuel cells, batteries, and other renewable energy sources' prices are falling while their efficiency rises, which is a positive development for widespread use.

Shortly, fuel cell technology will provide hydrogen fuel that is 100 percent clean and less costly than fossil fuels. Managers at Bloom Energy (BE -5.68 percent) anticipate clean hydrogen fuel will surpass gasoline on a cost basis as the company's expenses continue to fall.

Renewable energy technology is continuously developing and becoming more competitive with fossil fuels, no matter where you look. That will have a long-term positive impact on the industry.

Boosting the economy

Renewable energy firms have had difficulty making money consistently during the last ten years. Because of this, things are shifting. As you can see in the table below, all four of these companies are profitable: First Solar (FSLR-3.71 percent; SPWR-9.11 percent; Enphase Energy (ENPH-7.62 percent; and SolarEdge Technologies (SEDG-3.62 percent). Only Sunrun ( RUN -5.58 percent) of these five firms is losing money, and that's partly due to the way it funds solar projects.

ESG

Renewable energy equities could benefit from increased attention to environmental stocks, social, and governance (ESG) considerations by investors. Large investors and pension funds sell off their fossil fuel assets, which bodes well for wind, solar, and energy storage technologies.

By 2030, ESG investments will account for $1 trillion in assets under management. According to Armando Senra, BlackRock's America's head of iShares. Brookfield Renewable Partners and NextEra Energy Partners, who purchase renewable energy assets and keep them for decades, will benefit from this category's growth. As a result, manufacturers and other renewable energy producers can meet this need.