May 10, 2023
The federal government is getting serious about going green. Congress has passed several laws over the past year that promise to pump hundreds of billions of dollars into the economy to jumpstart the green energy boom. For the retail shareholder, there are a number of public companies that are poised to tap into this energy.
All of this is being driven by climate change concerns, which is moving us away from carbon-based fossil fuels. Alternative energy sources are on the rise. There are estimates that over the next 30 years, more than $150 trillion will be invested in renewable and alternative energy sources.
The Inflation Reduction Act, passed last August (along with the 2021 infrastructure law), offers massive subsidies that are designed to move the nation toward renewable energy and creating new industries to compete with China. In less than a year since the act passed, about $150 billion in investments in renewable energy and battery storage have been announced, according to the American Clean Power Association. Billions more in investments have been announced for batteries, carbon capture and hydrogen.
Last year, renewable sources surpassed coal for U.S. electricity production for the first time in more than six decades, increasing by 12% to generate 22% of the energy produced in the U.S. at the same time coal dropped 8%, according to research from Rhodium Group. And that’s in the U.S., which is running behind the rest of the world when it comes to clean energy.
The International Energy Agency says renewable energy will become the largest source of global electricity generation by 2025. Wind and solar generation are expected to double over the next five years to provide about 20% of global power generation by 2027. The war in Ukraine is pushing the European Union to go green even faster as it tries to wean itself from Russian fossil fuels by 2027.
So what are some of the companies ready to take advantage of this renewable energy boom? Several work directly in the field of renewable energy, but others are positioned to tangentially benefit from the growth in green energy. We will look at a few of those here as well.
Brookfield Renewable Partners (Tii:BEP) is one of the world’s largest producers of hydroelectric power and one of the world’s largest publicly traded platforms for renewable power and decarbonization. Its portfolio consists of hydroelectric, wind, solar, distributed energy and sustainable solutions across five continents. A consortium led by Brookfield Renewable Partners announced recently that it would acquire Origin Energy, Australia’s largest integrated power generator and energy retailer.
General Electric (Tii:GE) might not immediately come to mind when it comes to green energy production, but the company is rolling its GE energy businesses under one banner with its GE Vernova unit. The unit will include renewables, power, digital and energy financial services under one banner. Scott Strazik, CEO of GE Vernova, said: “As a leader, I am held accountable for a lot of numbers, many of them financial. But our quarterly financials aren’t the only numbers I am ultimately going to be judged against. It is what we do about the approximately 800 million people without access to reliable and affordable electricity today; how we keep pace with the global electricity demand projected to grow by 50% in the next 20 years; and how we decarbonize the power sector and strengthen its resilience simultaneously.”
NextEra Energy (Tii:NEE) is one of the largest producers of wind and solar energy in the world. And with a market capitalization of more than $100 billion, it is the world's largest utility company. NextEra Energy is the first company in history committed to moving past net zero all the way to Real Zero, leveraging low-cost renewables to drive energy affordability for customers. NextEra Energy has created the Zero Carbon Blueprint, a plan to significantly increase renewable energy deployment and lead the $4 trillion market opportunity to decarbonize the U.S. economy. Plan would generate only carbon-emissions-free energy from a diverse mix of wind, solar, battery storage, nuclear, green hydrogen and other renewable sources.
General Motors (Tii:GM) doesn’t produce any of its own renewable energy, but its electric vehicles will certainly drive the market for green power. The company has plans to invest $35 billion in electric vehicle and autonomous vehicle production through 2025. In a letter to shareholders, CEO Mary Barra said the company’s Chevrolet Bolt EV and Bolt EUV had record sales in 2022. Bolt sales rose 72% to 38,120 in 2022.
Clearway Energy (Tii:CWEN) is one of the largest developers and operators of clean energy in the U.S. with more than seven gigawatts of wind, solar and energy storage in operation. Clearway’s operating footprint and development pipeline include utility-scale wind and solar assets and community solar projects nationwide. In addition, Clearway owns a large portfolio of distributed solar projects.
Canadian Solar (Tii:CSIQ) is one of the world’s largest solar photovoltaic product product producers, as well as one of the largest solar power plant developers globally. The company has delivered more than 90 gigawatts of solar modules to thousands of customers in more than 160 countries – enough to meet the clean, green energy needs of approximately 21.2 million households. Canadian Solar currently has 25 gigawatts of solar projects and 47 gigawatts of storage projects in pipeline.
First Solar (Tii:FSLR) was founded in 1999 and is a leading American solar technology company and global provider of eco-efficient solar modules. The company is unique among the world’s 10 largest solar manufacturers for being the only U.S.-headquartered company and not manufacturing in China. First Solar’s thin film photovoltaic (PV) modules are the next generation of solar technologies, providing a lower-carbon alternative to conventional crystalline silicon (c-Si) PV panels.
SolarEdge Technologies (Tii:SEDG) was established in 2006 and developed the DC-optimized inverter that changed the way power is harvested and managed in photovoltaic (PV) systems. The SolarEdge intelligent inverter solution maximizes power generation while lowering the cost of energy produced by the PV system, for improved RoI. Continuing to advance smart energy, SolarEdge addresses a broad range of energy market segments through its diversified product offering, including residential, commercial and large-scale PV, energy storage and backup solutions, EV charging, home energy management, grid services and virtual power plants, batteries and uninterrupted power supply (UPS) solutions.
Along with these companies, retail shareholders have many other options available to invest in green energy and its production. The market for renewable energy is expected to continue to burn as bright as the sun that powers these companies' products.
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