If you are thinking about investing in the future, participating in the renewable energy movement can be an excellent way to lead earth towards a more sustainable future and potentially earn a return on your investment.
In fact, according to information from the Center for Climate and Energy Solutions, renewable energy sources are the fastest-growing sources of energy in the U.S. Their usage has skyrocketed over 100 percent in the past ten years alone.
If you are looking to get ahead of the future of energy, keep reading this guide to learn the best renewable energy companies to invest in and how to get started.
What Is Renewable Energy
According to the U.S Energy Information Administration, renewable energy definition is energy that comes from sources that can replenish naturally.
The primary Renewable energy sources include:
- Solar
- Wind
- Geothermal
- Hydropower
- And Biomass
Globally, hydropower controls the largest share of renewable energy consumption. The next largest is wind, and then solar follows in third place.
How to Invest
Now that you know the different renewable energy examples you can invest in, it’s time to get started. There are several different ways you can invest. These include the following.
1. Invest Directly
First and foremost, you can invest in renewable energy companies directly. Doing so will often require a large sum of money that you don’t won’t need to use any time soon.
When you invest directly into a company, you will generally retain an ownership role depending on how large the stake is. The company may need the funds for operations to grow the company. In these instances, it can also take a while to generate a return on your investment.
2. Buy Stock in Renewable Energy Companies
A simpler way to invest is to sign up for a brokerage account and buy shares in the company. You can purchase shares with less money than what would be required to invest directly. You can invest as much or as little (depending on share price) as you want.
For example, if you want to invest in a solar company, you can research the best solar investments and determine which one is best for you.
Some of the more popular solar investments that investors have a stake in include SunPower, First solar, and SolarEdge.
3. Consider an Exchange Traded Fund (ETF)
Last but not least, you can invest in a renewable energy exchange-traded fund or ETF. These financial products are created and designed to track the performance of certain renewable energy or company and mimic the performance.
For example, if you were interested in investing in wind energy but don’t know which company to invest in, you can invest in the technology through an ETF. One of the most popular wind energy ETFs is the First Trust Global Wind Energy ETF. The fund is invested in several different wind energy companies and products.
The Best Renewable Energy Companies for You to Invest In
There are a few things to keep in mind when it comes to investing in renewable energy companies. First, how long has the business been around. If it’s a newer company, it can come with more risk than an established company that has been doing business for years=. Next, you will also need to consider how much business it’s doing and its projected growth. If the company isn’t doing much business now but has a promising product, it has more risk and higher reward potential.
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