Strong Trend to Invest in Renewable Energy
If you are looking for options to invest your money, you might have already heard people say, “Invest in renewable energy!” Or you might have already read hundreds of blogs talking about Enphase Energy Inc, JinkoSolar Holding Co Ltd, SunPower Corporation and many other green companies.
But why is renewable energy a good investment? Looking at the following data may help you make decisions whether or not to include green energy in your portfolio.
Consistent Upward Trend in Global Investment Is Likely to Continue
Despite the deepest economic recession in nearly a century triggered by the COVID-19 pandemic, there is a strong investment trend in renewable energy industry in 2020.
According to Energy Transition Investment Trend by Bloomberg NEF, the world invested a record $501.3 billion to decarbonization in 2020, increasing by 9% from the previous year. Breaking down by sector, $303.5 billion went into renewable energy, ahead of electrified transport of $139 billion.
Not only these historical numbers look promising, the International Renewable Energy Agency (IRENA) says it will take $131 trillion in investment to achieve the Paris Agreement targets between now and 2050. That is to say, $4.4 trillion per year are necessary.
The More Affordable, the More Competitive
Renewable energy once had drawbacks – it was too expensive for most consumers. It used to be rather luxurious prestige than commodity, only given to limited countries and companies. In recent years, however, it has become a real force in daily life that investors cannot ignore.
Renewable Power Generation Costs in 2020 by IRENA reveals the change in cost of energy by technology from 2010 to 2020.
- Fossil fuels – $0.076 /kWh in 2010, $0.076 /kWh in 2020
- Solar photovoltaic – $0.381 /kWh in 2010, $0.057 /kWh in 2020
- Offshore wind – $0.162 /kWh in 2010, $0.084 /kWh in 2020
In the same period, the price of lithium-ion battery fell down by 89%. It was $1,100 /kWh in 2010 and $137 /kWh in 2020, according to Bloomberg NEF.
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