Investing in Sustainable Energy: Opportunities and Trends

Global energy markets are currently transitioning towards renewable-energy-dominated future, providing long-term investors with opportunities.

Policy initiatives such as renewable portfolio standards (RPSs), tax credits for renewable technologies and consumption mandates are driving market expansion for solar, wind and hydroelectric technologies. Meanwhile technological innovation and cost competitiveness are helping accelerate this market expansion.

1. Increased Energy Efficiency

Energy efficiency offers consumers and society a risk-free, high-return investment option that reduces power plant requirements while decreasing environmental costs compared to alternatives such as expanding natural gas infrastructure or building coal plants.

Energy efficiency improvements are an integral component of all industries and households alike, but are especially relevant in households and industry. One-time investments in energy efficient appliances, buildings, vehicles and services yield immediate dividends in reduced electricity bills for users – for instance upgrading an air conditioner, refrigerator or lamp can cut annual energy consumption by 33%!

Industry can also save energy through more energy-efficient motors or by changing production practices to cut their energy intensity by up to 35%, helping increase productivity and profits while simultaneously decreasing waste and CO2 emissions.

2. Reduced Carbon Emissions

At an international level, governments and organizations are taking steps to reduce carbon emissions, creating investment opportunities in renewable technologies, electric vehicles, green hydrogen production facilities and carbon capture storage services.

These initiatives also can lead to lower electricity costs for consumers and businesses, increase economic productivity, improve respiratory health and decrease environmental impacts – all key elements in efforts to decrease carbon emissions and combat climate change (United Nations 2022).

Investors can select either divesting from fossil fuel producers or investing in lower carbon index strategies available through some exchange-traded funds (ETFs), but real world efforts by companies to transition their business towards renewable energy may have more of an effect than simply re-balancing their portfolio carbon intensity. Therefore, investors must set long-term goals while considering exposure to climate solutions.

3. Lower Utility Bills

Clean energy costs far less than fossil fuels. Decarbonization could save the world up to $4.2 trillion each year in climate impacts and health damages, in addition to providing significant economic and social equity benefits such as improved respiratory health and lower healthcare costs (United Nations 2022).

Renewables offer greater resilience than other forms of power generation when coupled with storage – a factor which is driving an increasing interest in renewable PPAs from corporates who wish to ensure long-term price certainty.

Transitioning away from fossil fuels will open up investment opportunities in clean energy infrastructure as well as redesign of grid architecture to accommodate intermittency of renewables. This bottom-up approach to electricity sector will generate many of the same jobs produced by oil industry but with much lower job creation costs for families struggling to pay utility bills – creating jobs more affordably while hastening a cleaner future for all.

4. Access to Clean Energy

Over one billion people worldwide lack access to electricity, severely restricting their opportunities and negatively affecting their health. Clean energy technologies such as solar power and hydrogen advancement offer significant potential in creating economic development in low-income communities and households.

Sustainable energy is an international priority, given the impact that its usage can have on the planet’s ecosystem. Sustainable energy production involves exploring alternative and greener sources that do not pollute or cost too much money – these may include wind or solar power as alternatives that don’t harm nature, contribute to climate change or have heavy operational costs associated with them.

Renewable energy transition can play an essential part in meeting Sustainable Development Goal 7 and improving quality of life for millions of families by reducing indoor air pollution caused by traditional fuels such as wood and coal burning in poorly ventilated homes. EESI works with utilities and third parties such as green banks to establish equitable on-bill financing programs and electrification initiatives that reduce energy bills for low-income households; including using grant funding for technical support to rural electric cooperatives through our Access Clean Energy Savings program.

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