For the last thirty years, the demand for green energy has been multiplied as we can find a large number of new technologies that promise us a satisfying solution to reduce the dependence on natural gas, oil, or coal. In connection with studies made in this field energy usage of the whole world is continually growing. The rate will be nearly 40 % higher over the next two decades. So the need for green energy sources also explodes, and if we are interested in investing in this field, it can mean some remarkable portfolio as well.
The rate of global green investment has increased up to $285.9 billion which is 5% more than the previous years’ peak, which was $278.5. In the last 12 years the total amounts have been invested over $2.3 trillion, and if we recall the new dollar investment peak set in 2015, we can see that terms of Gigawatts of capacity were added as a result. If we look at the numbers of 2014, we can see a considerable rise in wind energy – 62 GW 49 GW in 20114) from the total green power and the solar accounts – 55 GW (45 GW). It is worth observing the regional distribution. An excellent new record rose in Chine that increased the outlays by 17% which means $102.9 billion and about 36% of the world total. The US show us an increase in investments, up 19% – $44.1 billion, in Africa and the Middle East up 58% – $12.5 billion, while India up 22% – $10.2 billion. But a decrease can be seen in Europe by 21% – $48.8 billion which was the lowest rate within the previous nine years.
But how viable is the green energy? We should consider the facts below:
– The source of energy is constant and reliable: there is little to be said that energy provided by the wind or solar generators is sustainable, renewable and continual.– Energy prices are stable: the inflation results decrease or increase in the supply of fossil fuels. The costs energy coming from renewables depends on how much money has been invested in the infrastructure; therefore, we can count with stables expenditures.
– Greenhouse gas emissions are low as they do not pollute the environment.
– The cost of operation is much lower than the fossil fuel procedure claims, which is important if we consider the higher costs of implementation and development.– A large number of jobs can be created with using the green energy plants worldwide.
– Micro-stations can be put up which means to avoid transporting energy from the primary stations.We can select the optimal investment in green energy if we follow a process f.e. like this:
– We should choose stocks that are high-dividend – it reduces the risks of the portfolio without decreasing returns expected.
– It is recommended to select stocks that have low fugacity or low market correlation – it helps to avoid the risk of sacrificing returns.– Opting for stocks with small capitalization and lower liquidity brings more liquid counterparts and larger outperform.– Choosing a portfolio that contains individual stocks is a more efficient way to gain the pros of these market anomalies.When we want to invest in green energy, we do need to consider the facts above so we can understand that this has steadily growing potential. The key for investment is to know what we want to get and gain out of this investment.