While the environmental news continues to be dire and bleak, there’s a ray of light amidst the darkness. Dropping costs and improving technology have led to a rise in renewable energy.
According to a report from the Wall Street Journal, the surge in clean energy presents a promising opportunity to reduce reliance on fossil fuels. In fact, Boston Consulting Group’s global chair Rich Lesser noted that progress in technology has exceeded expectations.
In 2009, the International Energy Agency predicted that solar power would remain economically uncompetitive on the grid. But renewable energy and electric vehicles experienced greater growth than anticipated. The International Renewable Energy Agency reported that last year, over 80% of the world’s new power capacity came from renewables.
Continued Growth in Wind and Solar Energy
The initial growth in wind and solar was driven by subsidies. However, subsequent technological advancements and large-scale manufacturing have significantly lowered their costs. The price of lithium-ion batteries has also seen a substantial decrease.
Financial investments continue to pour into clean energy projects. Jarand Rystad, CEO of research firm Rystad Energy, said that the proliferation of solar panels is compensating for slower growth in areas like offshore wind.
BloombergNEF anticipates that the installation of solar panels in the current year will contribute nearly 400 gigawatts of generating capacity, equivalent to 4.5% of the total generating capacity of the world’s power plants in 2022. Proponents of the transition to renewable energy argue that it’s not a question of if, but when renewables will surpass fossil fuels. The International Energy Agency predicts that the demand for coal, gas, and oil will reach its peak within this decade.
Targeting Solar Power
Investors looking to invest in the growing sector of solar power may want to look into the Invesco Solar ETF (TAN ). TAN delivers targeted exposure to the solar energy industry by following the MAC Global Solar Energy Index.
TAN charges 69 basis points.
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