Is it profitable to invest in renewable energy?

Is it profitable to invest in renewable energy companies?
Is it profitable to invest in renewable energy companies?

Yes it is. But we must be realistic, thanks to the support of climate change denier countries, coal has had a new push. Is it profitable to invest in renewable energy companies?

The problem is that in addition to being a polluting source of energy generation, it is finite. In other words, investment in renewable energies, in addition to being profitable, is essential, because there will be no more viable options.

A promising future
The development of renewable energies worldwide, in Europe and especially in Spain, should be much greater. But since the EU is currently with the water around its neck, since it has made the commitment by 2050 to have a climate neutral and sustainable economy, from the EC they are pointing towards renewable energies with new vigor and fresh money.

Is it profitable to invest in renewable energy companies?
Furthermore, the exploitation of renewables has proven to be an excellent business, with a future projection and that once the initial investments in installation have been amortized, only net benefits remain ahead during their entire useful life.

And those payback times are shortened, because there are more and more subsidies and installation costs fall at an accelerated rate.

The only thing that slows the development of renewables at the moment are the restrictions by some governments (not forgetting the Tax on the Sun of Spain or the unconditional support to the burning of coal from the US, Brazil or Russia) That is why it is necessary that in the other countries the regulations are adapted to the new times and the development of alternative energies be decisively supported.

Not only should it be a “growing” market, but it needs governments to opt for renewable energies as the first and undisputed option for electricity generation, with which both banks and private investors will firmly bet on the business of clean energies.

Is investing in renewables good business?
Yes, there is no doubt about that, because many countries that have changed their energy matrix for a non-polluting and sustainable one, through environmental policies that support and encourage renewable energies, have shown that they are a good business because they give a lot of money and carry coupled with a very important growth of the national economy.

Before investing capital in the medium or long term in renewable sources, it is important to assess that alternative energies are on the rise, because the governments of the EU member countries must support their development, but these situations can change abruptly with a change of government or an economic crisis.

What are my options?
Many individuals wonder if it is feasible to invest their savings, with the peace of mind of obtaining an acceptable return, without damaging the environment.

To be able to make correct decisions in this regard, it is essential to be aware of market fluctuations and the news regarding environmental policy, national and European. These are the forms of investment that can be chosen.

Buying shares of companies that are listed on the stock market and that dedicate part or all of their businesses to renewable energies is undoubtedly one of the options. It is easy to know the fluctuation of assets and the money that is contributed, it helps these companies continue to innovate and develop.

Renewable energy investment funds are specific businesses offered by the managers of this type of investment, which can be banks or other private entities.

Within investment funds are Exchange Trade Funds (better known by its acronym ETFs) and Mutual Funds

ETFs or exchange-traded mutual funds are those that are traded in secondary stock markets by tracking indices. The Mutual Funds bring together several investors who contribute money, in order to carry out a specific renewable energy project, such as the installation of a wind farm or solar panels.

What do I need to invest in renewables?
In reality, although there are companies that to sell a package of shares or to become part of some funds, require that the investor contribute very high minimum amounts, for those who have little capital, renewable energies can be very profitable. The subject must be studied exhaustively and bear in mind that, not because something has paid off, it should continue to do so.

What you do need is to have clear objectives, as to how much you want to risk, study the conditions they offer us and assess how credible the plans they are selling us are.

And once we have finalized the business, it is of the utmost importance that we follow up, to verify if the agreement is fulfilled.

Are renewable energy companies ISR?
Investing in SRI is a growing category of investment options, which values that companies comply with ESG criteria, that is, respect the environment, be socially responsible and have a transparent and ethical corporate governance. SRIs, Socially Responsible Investments are also called sustainable investments.

A priori it might be thought that, if a company is dedicated to the exploitation of renewable energies, it should be a good candidate for an NIS, but it might not be the case.

The product you sell, in this case electricity generated from renewable sources is respectful with the environment, does not necessarily mean that the other ESG criteria are met. Check it out before investing.