2021 saw the push towards clean energy get an extra boost thanks to the backing of the federal government via its trillion-dollar infrastructure plan.
The plan calls for funding to build out more clean energy infrastructure, whether that’s more solar energy panels or more wind turbines. As more clean energy initiatives develop, look for federal government subsidies to help increase demand for more of these projects across the country.
“This year will prove a landmark one for federal climate action,” a Forbes article notes. “Congress will enact transformative climate legislation when the Senate passes the BBBA investment package, which passed the House late last year. These investments will catalyze decarbonization across the economy.”
“In the electric power sector, the long-term extension of the tax credits and their conversion to direct pay will mean that 2022 will be another record year for renewable energy deployment,” Forbes adds. “We will see more utility-owned clean energy projects, which will be important to stopping the more than 200 gas plants utilities current have planned.”
Zeroing In on Clean Energy Technology
As the world moves towards reducing its carbon footprint, a growth opportunity exists for companies that operate primarily in renewable energy technology. That trend encapsulates itself in one fund: the Global X CleanTech ETF (CTEC ).
At a 0.50% expense ratio, CTEC seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Global CleanTech Index. The fund invests at least 80% of its total assets, plus borrowings for investment purposes, in the securities of the index and in ADRs, GDRs based on the securities in the index.
The index is designed to provide exposure to exchange-listed companies that are positioned to benefit from the increased adoption of technologies focused on improving the efficiency of renewable energy production and/or mitigating the adverse environmental effects of resource consumption. Overall, the fund gives investors exposure to:
- High growth potential: CTEC enables investors to access high growth potential through companies at the leading edge of a structural shift in global energy use.
- An unconstrained approach: CTEC’s composition transcends classic sector, industry, and geographic classifications by tracking an emerging theme.
- ETF efficiency: In a single trade, CTEC delivers access to dozens of companies with high exposure to the clean tech theme.
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