Clean Energy Investing Under Trump Is Easier Than You Think
By Jonathan Goodwin
Since his inauguration, US President Donald Trump and his administration have engaged in rolling back environmental protections, cutting sustainable energy plans, and boosting the coal and nuclear markets in spite of prevailing conditions.
For many fans of the environment it looked like the movement for renewable energy was surely doomed, but it has turned out to bloom and boom against these backwards headwinds. Investing in clean energy is still possible, through traditional means and by getting a little creative with some indirect approaches.
The Old-Fashioned Way Is Still Good
Naturally, investing directly in renewable energy companies is still a great way to promote the growth of renewable energy in this age of Trump. The market was beating down clean energy a few years ago, but 2017 was a very strong year and 2018 is shaping up quite similarly.
To start, solar energy stocks roared last year. This was partly due to federal tax credits for home panel installation and some other incentives, yet it looks more like the market is embracing solar as it strengthens over time. The Guggenheim exchange-traded fund (ETF), which tracks solar companies’ share prices, delivered a powerful 54 percent return across 2017.
Recently, solar stocks have shown some volatility, such as Vivint, First Solar, and Sunpower, but now’s the right time to invest since prices are low and there are growth opportunities on the horizon. With California’s new mandate for all new homes to be built with solar panels installed by 2020, the industry has a strong chance for growth in the coming years.
If the Golden State can prove its thesis with this law, other states will surely follow suit with similar requirements, offering more and more chances for growth in the solar market.
Wind is also doing quite well for itself. Investing in wind stocks is sure bet to pay off and here’s why.
Through all of GE’s painful restructuring, it is still laser-focused on renewable energy as part of its power division and dropped $1.7 billion to buy LM Wind Power last year. What’s most exciting about GE’s wind efforts is its new turbine, the Haliade X. This new offshore model has blades longer than a football field and its R&D budget is about $400 million over the next three to five years. It’s a good time to buy GE stock while this turbine is engineered.
The Haliade X will offer much, much higher power capacity, capable of producing as much as 67 gigawatt-hours each year with a capacity factor of 63 percent. This means a great deal more power will be available more often, so backup costs will drop a lot and peak energy demand will be more easily met.
Looking at a broader level, the market has never been more favorable to renewables. This recent Lazard report on 2017 energy costs shows how much cheaper solar and wind are becoming when compared to fossil fuels.
So in spite of Trump’s rhetoric and policy movements, the traditional measures for investing in renewables are still really viable for not only getting good returns, but also boosting the sector. Interested investors should look at buying wind and solar stocks, but also participating in cleantech startup funding rounds, installing solar panels on their homes and offices, and buying into renewable energy ETFs.
If investing directly into renewable stocks and projects is too much risk for investors, they should look to companies with established, separate business models that are investing in renewables themselves.
Big Tech is a great place to look, as the world’s most valuable tech companies are looking to power themselves with renewable energy. Google/Alphabet announced in April that it bought enough energy from renewable sources to match its demand for electricity. Four days later, Apple couldn’t be outdone and announced that 100 percent of its global facilities were powered by renewable energy sources.
Facebook recently committed to eliminate 75 percent of its greenhouse emissions and power all of its facilities with renewable energy by 2020. Part of getting there for the social network is ramping up its investments in extremely sustainable data centers in Luleå, Sweden, not far from the Arctic Circle.
Not only is Big Tech growing clean energy investments, so too is Big Oil. Some of the largest oil companies are pouring billions into renewable energy projects in a bid to bolster sustainability and satisfy both consumer and investor demands.
Norway’s state-owned Statoil completely rebranded to Equinor and is building the Empire Wind Project, which is projected to power over a million homes and increase global offshore wind energy capacity by about 5 percent.
Royal Dutch Shell is ramping up its investments in solar power while the French oil company Total bought a majority stake in Sunpower and is transitioning to becoming an energy utility, rather than an energy extractor.
It might seem counterintuitive, but buying stocks in these companies is a step toward growing the renewable energy sector and sustainably-minded shareholders can band together and demand these companies (and others) scale up their efforts toward clean energy.
Go Your Own Way
Finally, fans of clean energy need only get creative to support the renewables sector to make real differences – and it all starts with acting local. There are a handful of alternatives available now or in the near future.
Community-based energy communities are a great place to start. New York’s own Shared Solar is a perfect example of this system, wherein consumers subscribe to receive solar energy from a grid of panels distributed throughout the community, while building owners lease their roof space to host solar panels or have them installed and sell the energy into the collective.
These community systems are great people-powered approach to support renewable energy and they eliminate the risks associated with relying on a company or government to do it on their own. Communal energy customers can get returns in huge savings on their energy bills and expand clean energy access to their neighbors along the way.
Another method is by directly investing in local clean infrastructure projects, like solar farms or even individual wind turbines. NestEggis a Dutch startup that builds blockchain technology empowering individuals to invest in projects of their choosing. The company’s goal is to innovate on pension investments by verifying investment ownership and enabling investors to collect value throughout their lives, not just after retirement.
Essentially, a single person would buy some value on a chain, codifying their identity and stake in a project, and enjoys the value until death. If Hans buys a percentage of a windmill, NestEgg records it on a chain and delivers him a portion of the turbine’s energy value each month, lowering the cost of his energy bills. When Hans retires, he would receive a larger monthly stipend, further subsidizing or even entirely eliminating his energy bill.
Finally, interested investors should look for investment platforms that offer them a chance to engage in sustainable projects. Swell Investing is one such platform, transparently connecting investors to what they own and managing their money by a strict set of rules.
Even during a presidential administration determined to remain in a past version of the economy, investing in clean energy has hardly been easier. Opportunities abound and so too does the renewable energy sector.
Author Bio: Jonathan Goodwin is a writer and marketing & PR professional with experience working for agencies and startups. He often writes on the intersection of business, technology, policy, and innovation and researches future trends in those areas. He resides in New York City.
Investment Disclaimer: The CaelusGreenRoom website and the information contained in this post is not intended to be a source of advice or credit analysis with respect to the material presented, and the information and/or documents contained in this website do not constitute investment advice. The opinions presented in this post are those of the author.