The importance of renewable energy has grown over the years as people worldwide become more aware of the effects of climate change. Countries are looking to limit their reliance on fossil fuels. Various forms of power generation, such as wind, solar, and hydroelectric, are utilized in the renewable sector.

 If you plan on investing in the renewable energy sector, here are some factors you should consider.


Renewable energy history

For a significant portion of history, renewable energy was the only available energy source. Before coal was used in the 1800s, people were burning wood and other biomass for fuel. Water and wind were also common sources of power.

 The discovery of fossil fuels changed the way people conducted business. Fossil fuels were then used to power the Industrial revolution.

 Renewable energy has gained importance as a means of fighting climate change. It can help countries lower their reliance on fossil fuel imports.


Current trends

 The various forms of renewable energy, such as wind and solar power, are interconnected. There are also common trends that investors should keep an eye on.

Home solar installations

One of the easiest ways to reduce electricity costs is by installing solar panels on your home. People have been adding solar panels at an accelerated rate due to the tax incentives available.

 The residential solar power production capacity reached 2.9 gigawatts in 2020. It continued to grow by 34% in 2021. The industry was able to set new quarterly growth records throughout 2022.

Potential investors can profit from this trend by investing in companies that market and install home solar systems. In addition, President Biden signed legislation that increased the tax incentive for installations.


Offshore wind

Wind power is also encountering a significant issue when finding land for its windmills. Due to the large amount of open space required for these structures, they can be hard to find in areas such as cities along the west and east coasts.

 Wind power, mainly produced offshore in the US, can solve this issue using vast open space. In 2022, over 40 gigawatts of new capacity were already being developed.

 This sector is expected to grow significantly in the next few years due to the construction of over 20 gigawatts of new facilities.


Domestic manufacturing

The COVID-19 pandemic highlighted the vulnerability of the global supply chain. It led to shortages and rising prices. Because of this, many companies have decided to bring their operations back to the US.

 Despite the factors affecting the manufacturing industry, the US could still produce over 20 gigawatts of solar panels in 2021. However, this number has dropped to around five gigawatts due to the need for more demand.


What it means for investors

Despite the factors affecting the manufacturing industry, the US could still produce over 20 gigawatts of solar panels in 2021. It’s believed that green energy will continue to grow in importance in the coming decades. According to a survey, over two-thirds of Americans are very or somewhat concerned about climate change.

 Potential investors can benefit from the increasing number of renewable energy sources by investing in companies that develop new and innovative technologies. They can also consider selling their stakes to companies involved in fossil fuels.

 Climate change is a significant issue that affects everyone. Since it’s becoming more important to fight against environmental changes, more investors are considering adding renewable energy sources to their portfolios.