The move to renewable energy stocks has grown over the last few years, as large established firms and the smaller firms are continuing to make investment in green initiatives. Companies including SolarEdge Technologies Inc. and Sunrun Inc. are getting some benefits from this change from the high carbon fuels to the clean and the renewable energy stocks, with stocks up about 300% and 200% respectively. They have easily conquered the market, and they have outperformed the Big Tech firms, including Facebook, Apple, and Amazon. There has been an estimation that $11 Trillion will get invested in the new Power generation Technologies by the year 2050.
So, what has spurred this great rise in renewable energy stocks? What is the best way for investors to be able to capitalize on its development? Among the key reasons for the strong success of the green energy stocks right now is that the market is rising rapidly. The need for green technologies is at an all-time high due to the increasing emphasis on sustainability and climate change. Currently, about 25% of the World’s electricity is from renewable sources.
In its base case, International Energy Agency sees the renewable energy generation capacity increasing to around 30% by the year 2024 under the base-case scenario, which is driven by the cost reductions as well as advances in digital technologies. Solar will have the brightest future; the IEA is estimating with this technology expected to fuel most of that development. The swelling demand for environmental investment or socially conscious investment is another reason green energy stock is gaining momentum with new buyers (SRI). According to Morningstar, in the US, $20.9 billion poured into renewable funds in the first half of 2020.
The story was the same in Europe, with the European Sustainable funds attracting a record inflow of €54.6 billion in the 2020’s second quarter. This was more than twice the inflows that were registered in 2020’s first quarter. In Australia, the responsible as well as sustainable funds representing about 37% of the nation’s $3 trillion investment into well managed Assets. Once a niche field in finance, sustainable investing has grown to become a mainstream investment practice, and clean energy stocks are gaining.
Investors are also now focused on the fact that many big cities around the World are committed to being net-zero-carbon cities by 2050. As part of UN Race to Zero Initiative, more than 425 cities globally have vowed to become carbon-neutral, including Copenhagen, Melbourne, Oslo, London, Vancouver, and Sydney, as well as 1,101 firms including Ford and Facebook, 45 of the largest investors and 549 Universities.