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The increase in the global population is increasing the demand for energy. Today, climate change and global warming are the two phenomena the world is most concerned about. We’ve caused our planet to warm up because of our unsustainable energy use from non-renewable sources. Using fossil fuels like oil, coal, and gas to meet our energy demands releases large quantities of greenhouse emissions in the atmosphere, trapping heat and raising the temperature of the Earth’s surface. So, yes, you should invest in green energy right now.
Emerging economies and developing nations will cause energy demands to rise by nearly 50% by 2050. With scientists predicting that temperatures will rise well over 2 degrees Celsius, countries around the world are working to replace fossil fuels with renewable sources of energy. The emerging renewable energy industry provides a market opportunity for people looking to profit from green energy investments.
Green energy is energy from renewable sources such as solar, wind, and hydroelectric that can replace energy from fossil fuels. Green energy also refers to technologies that are important for a transition to cleaner energy sources. These can include smart grids and battery technologies for electric vehicles.
A recent study found that global investment in green energy technologies reached 755 billion dollars in 2021. To achieve net-zero emissions by mid-century, we need to reach green energy investments worth over 2 trillion dollars between 2022 and 2025 and 4.1 trillion dollars between 2026 and 2030.
New solar and wind power installations in 2021 saw investments in these technologies soar. To reach net-zero emissions by 2050, solar and wind energy investments need an average of 1.5 trillion dollars every year between 2026 and 2030. The Asia-Pacific region led investments in climate-related technologies with 368 billion dollars.
Green energy prospects offer several ways of earning profits. The most direct way to invest in green energy is to identify individual companies in the business of producing renewable energy technologies. However, going over every company’s profile can get exhausting and time-consuming. Also, not all green stocks trade publicly. An easier way to invest in green energy is to identify a mutual fund with a large basket of green energy securities.
The main reason you should invest in green energy is apparent. Green energy investments save the environment. Climate change and non-renewable energy use are interlinked. Using and burning fossil fuels to power our economies hurts the environment. Replacing fossil fuels with clean energy sources will prevent further damage to the environment.
Investing in renewable energy can improve our air and water and reduce diseases. It also reduces the emissions of greenhouse gases like carbon dioxide. Renewable energy is also low-cost and highly efficient.
1. Unstable fossil fuel prices
The oil supply dropped during the COVID-19 pandemic. For the first time in US history, crude oil prices fell to negative values. The stocks of fuel companies plummeted.
Fossil fuel companies will have financial risks in the long run due to climate change and global warming. Investors are starting to realize this and have begun divesting.
Renewable energy is a growing industry. Sources of renewable energy like wind, solar, and hydroelectricity show us that a carbon-free lifestyle is easy to live. The renewable energy sector offers endless opportunities and innovations.
2. High yields and socio-economic development
In 2020, the International Renewable Energy Agency (IRENA) published a report showcasing the impact of renewable energy on socio-economic development. The report says that the transition to renewable energy will drive socio-economic development. Also, investing in green energy aligns with limiting the Earth’s warming to 2 degrees Celsius.
Of course, investing in renewable energy is expensive. It costs 19 trillion dollars more than the usual business approach. But, green energy investment will bring benefits worth 50-142 trillion dollars in the long run.
3. New job opportunities
The renewable energy industry will provide jobs to 42 million people worldwide by 2050. The development of the industry will offer local employment within small and large-scale businesses.
On the other hand, owing to climate change, jobs in the fossil fuels industry will reduce year by year. Governments need to develop plans and policies to make it easy for people working in the fuel sector to transition easily to the green energy sector.
4. Technological advancements
Every year, the world advances in technology. Technology allows us to improve solar panels, wind turbines, and other equipment required for renewable energy production. The cost of renewables has decreased, but their quality has significantly improved.
Technological improvements in energy storage could massively drive the industry’s growth. Improvements in battery storage technologies allow us to store energy from wind and solar sources for later use. Also, with the jump in the production and purchase of electric vehicles, manufacturers are looking for ways to use recycled material and green products to reduce the environmental impact of the vehicles. Technological advancements will greatly help manufacturers in this field.
With advancements in technology, renewable systems are bound to be more innovative and efficient.
5. Green energy is a growing sector
The rising concerns around climate change are propelling the renewable energy industry forward. Many countries around the world have commenced zero-emission projects. Also, renewable energy is much cheaper than fossil fuels. The increase in demand for renewable energy will further reduce costs and lead to more advancements in the industry.
In 2020, owing to the pandemic, renewable electricity capacity witnessed a decline of 13% compared to 2019. But the renewable energy companies showed resilience in 2021 and bounced back with new installations. Solar PV and wind energy accounted for 86% of global renewable energy capacity last year.
Renewable energy is the solution to saving our planet and securing a green future.
Public awareness about climate change and the harmful effects of using fossil fuels has led to people preferring to invest in green energy over conventional fuels.
Green energy stocks have shown a massive increase within the time frame of just a year. Therefore, green energy investments are extremely profitable.
Technological advancements will bring more innovations and job opportunities to the renewable energy industry, which is why green energy investment losses will be negligible.
It is always good to invest in green energy companies that are trying to give humanity and the Earth a glimmer of hope of survival.