It’s a distressing time for the climate industry in the U.S. as the current administration attempts to erase decades of energy transition progress. However, despite political pressure and related negative sentiment, the fundamentals for renewable energy keep it relevant in an age of increasing AI demand.
The Trump administration took a wrecking ball to climate initiatives in the U.S. since January 20. From Executive Orders attempting to pull and withhold funding for any climate-related initiatives to boosting domestic coal and gas production, the new administration has made its energy priorities clear.
Growing Renewable Energy Demand
Despite negative sentiment from the current administration, many U.S. companies continue to forge ahead with climate mandates anyway. Ford Motor Company just signed the largest clean power purchase agreement (PPA) with a utility — DTE— in U.S. history, reported Clean Technica. PPAs are increasingly used between utilities and tech companies to fund growing energy demand. They’re a contract where the buyer agrees to purchase an amount of energy from a utility company in advance. It provides buyers with a set energy price for a specified period of time.
PPAs are most often used to build out solar and wind farms. They allow the utility company to receive necessary financing and the buyer to benefit from guaranteed power at set prices. In the case of Ford and DTE, the agreement is for 650 megawatts of power and will span multiple new solar farms as well as wind energy.
Let’s also not forget data centers, experiencing a surge in demand from increasing AI adoption and build-out. While the current administration endorsed a return to coal, renewable energy is the most rapidly growing source of energy for data centers.
“Taken together, renewables remain the fastest-growing source of electricity for data centres, with total generation increasing at an annual average rate of 22% between 2024 and 2030, meeting nearly 50% of the growth in data centre electricity demand,” the International Energy Agency noted in a recent report on energy use and AI.
Although a surge in coal and fossil fuel use will likely fill the gap for the next five years, by 2030 renewables and nuclear energy will meet most energy demands for data centers globally.
The Cost Analysis Works In Favor of Renewables
Stepping back to look at all energy, in 2024 wind and solar collectively generated more electricity than coal in the U.S. It’s the first time that the renewable energies surpassed coal domestically according to Ember’s 2025 Global Elecricity Review report.
So why are companies still turning to renewables in the current environment? As it turns out, like with any technology s-curve, renewable energies have evolved to become the cheapest option for new energy. Renewables crossed that cost inflection point versus non-renewables in the last decade. Subsequently, most new energy is now produced by renewable energy sources. It’s just good business sense to go with the cheapest option, after all.
The International Renewable Energy Agency’s report last month revealed that over 92% of all new power added in 2024 came from renewables.
“Renewable energy is powering down the fossil fuel age. Record-breaking growth is creating jobs, lowering energy bills and cleaning our air,” said UN Secretary-General António Guterres in the IRENA report press release. “Renewables renew economies.”
International Renewable Progress Continues
Although the climate transition in the U.S. faces strong policy opposition currently, that transition continues abroad. China dominated renewable energy development once again last year, contributing 64% of all new renewable energy capacity, reported AP. Around 75% of that came from new solar farms. China is a country of energy duality, with the highest coal use globally. However, the Chinese government’s dedication to renewable energy continues to keep it at the front-edge of the energy transition.
Meanwhile, the EU continues to expand its regulated carbon market, covering more industries. Notably, the Carbon Border Adjustment Mechanism (CBAM) will remain a driver of carbon emission reductions globally. In essence, CBAM protects EU industries with carbon regulations from price inequalities in goods produced by countries without carbon regulation. Goods from carbon-intensive industries produced in a country without a regulated national cap-and-trade carbon allowance are taxed extra when entering the EU. This mechanism seeks to capture the price of carbon emitted in unregulated countries.
Regulated carbon markets take the funding raised through the sales of carbon allowances and funnel them into a wide range of climate initiatives and climate technologies. They fund renewable energy buildout projects and new technologies that further reduce the cost of green energy production.
The UN International Maritime Organization also established a historic framework this month. The framework passed tense negotiations and sets net-zero emissions by 2050 for the sector. The new mandate target ocean-going vessels over 5,000 gross tonnage, according to the UN press release. These vessels are currently responsible for 85% of carbon emissions within the maritime industry.
The net-zero transition pressures industries to cut emissions while driving greater renewable energy development. Although net-zero progress may slow — or even stop — from a policy level in the U.S., globally that transition continues unabated. It is also one more catalyst driving foundational demand for renewable energies in the years to come.
Investment Opportunities for Long-Term Investors
Investors looking to gain exposure to renewable energy opportunities this Earth Day have a number of options available to them. For those looking to harness the explosion of solar energy, currently doubling in capacity every three years according to Ember, the Invesco Solar ETF (TAN ) or the Global X Solar ETF (RAYS ) are worth consideration. Both funds take a global approach to investing in companies within the solar industry. Investors that instead see strong opportunity in the growth of nuclear energy sources would do well to consider funds like the VanEck Uranium and Nuclear ETF (NLR ) or the Global X Uranium ETF (URA ).
For those investors seeking broad renewable exposure, the Fidelity Clean Energy ETF (FRNW ) invests in companies that produce, distribute, or provide equipment or technology that enables the production of renewable energy from solar, wind, hydrogen, and other sources. The iShares Global Clean Energy ETF (ICLN ) invests globally in companies within renewable energy industries.
Finally, carbon allowances offer strong diversification potential within a commodities sleeve. With low correlations to stocks and bonds, carbon allowance funds are worth consideration for the long-term fundamentals of cap-and-trade markets. Because they help drive renewable energy growth, they offer a different angle to renewable energy investing. The KraneShares Global Carbon Strategy ETF (KRBN ) is the flagship fund within the space and offers exposure to the major regulated carbon markets globally.
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