The significance of renewable energy has increased in recent years as awareness of the effects of climate change increases and nations strive to reduce their reliance on foreign fossil fuels. The renewable energy sector encompasses various methods of power generation such as hydroelectric, wind, solar, and others. Despite the diversity of power generation methods, there are prevalent trends within the industry.
The Evolution of Renewable Energy
Renewable energy was the only energy source that existed for a large portion of history. Before the widespread use of coal in the mid-1800s, people burned wood and other biomass that could be regrown. Wind and water were also common power sources, with boats using large sails and mills relying on wind or water flows. This was the way of life for centuries.
However, the discovery of coal and other fossil fuels upended the way of doing things. As people began to burn these fuels to power the Industrial Revolution, the use of renewables decreased. They were replaced by fossil fuels that were cheaper and more energy-dense. The industrial revolution brought many benefits but also caused a severe impact on the environment.
More recently, the need for cleaner energy sources has become more pressing, with concerns about climate change and environmental degradation driving renewed interest in renewables. Renewable energy has regained its importance as a way to fight against climate change. They also offer a way for nations to improve their energy security by reducing reliance on imported oil and other fossil fuels. Renewable energy is now seen as a key solution to address climate change and create a sustainable future for the next generation.
Current Developments in the Renewable Energy Industry
The renewable energy sector encompasses various forms of power generation, such as wind and solar power. Despite the diversity of the industry, there are trends that investors should pay attention to, as these different forms of power generation are interconnected.
Trends in Energy Storage and Battery Technology within the Renewable Energy Industry
One major drawback of many renewable energy sources is that they struggle to produce consistent output 24/7/365. Solar panels are great in many sunny regions, but the sun goes down every night, and some days see clouds. Wind power can produce huge amounts of electricity, but the wind doesn’t always blow. With fossil fuels and other power sources, you can produce energy without worrying about the whims of nature.
To overcome this issue, a significant trend in the renewable energy sector is finding a way to store excess power when conditions are suitable for production. Many companies have entered the power grid energy storage industry to try to solve this problem. The goal is to store the excess energy generated during the peak hours, so it can be used when the demand is high.
In addition, some companies have started to focus on making batteries that are less expensive and have greater capacity. This crosses over into other aspects of green energy, such as electric vehicles, where battery capacity is essential. Businesses like Tesla, Toshiba, General Electric, and NextEra Energy have focused on this problem. The development of affordable and efficient batteries is crucial to the success of renewable energy and the growth of electric vehicles.
Given that batteries have applicability to all forms of renewable power, investors are keeping a close eye on the growth of this industry and looking for companies that might be close to a breakthrough. With the increasing demand for renewable energy, the storage and battery industry are expected to grow, and investors are looking for opportunities to invest in this sector.
Trends in Residential Solar Panel Installations
A popular way for individuals to go green and save on electricity costs is to put solar panels on their homes. Thanks to the potential savings and tax incentives available, people have added solar to their homes at an accelerated rate. In recent years, the trend of installing solar panels on residential properties has grown rapidly.
In 2020, residential solar production capacity was 2.9 gigawatts. That grew by 34% to 3.9 gigawatts in 2021. Through 2022, the industry continued to set quarterly growth records, adding more capacity each consecutive quarter. The home solar installation industry has been growing at an unprecedented rate, and it is expected to continue to grow in the coming years.
Investors looking to profit from this trend may invest in the businesses responsible for marketing and installing home solar systems. in 2022, President Biden signed a bill increasing the tax incentive for solar installations, which may help installations grow even further. The government’s support to the industry and the increasing awareness of the benefits of solar energy are the key factors driving the growth of the home solar installation industry. Investors are looking for opportunities to invest in this sector to capitalize on the growth potential.
Trends in Offshore Wind Energy Generation
One major problem for wind power is finding space to put windmills. Wind farms require large amounts of open space, which can be challenging to find in developed areas such as cities along the east and west coasts. The limited availability of land has been a significant barrier to the growth of wind power.
Offshore wind, meaning windmills located in waters off the coast of the United States, solves this issue by offering large amounts of open space. The vast ocean areas are ideal for wind farm installation as they can generate a consistent flow of wind and can be located far from population centers.
In mid-2022, more than 40 gigawatts of generating capacity was under development compared to just 42 megawatts of currently operating offshore wind power. The offshore wind power industry is still in its infancy, but it is expected to grow rapidly in the coming years. The offshore wind industry is expected to generate more than 20 GW of electricity by 2030, providing a significant contribution to the country’s energy mix.
With roughly 20 gigawatts of capacity under construction or in the permitting phase, this portion of the industry is likely to grow massively in the next few years. The increasing awareness of the benefits of offshore wind energy, the technological advancements and the government’s support are the key factors driving the growth of the offshore wind energy generation industry. Investors are looking for opportunities to invest in this sector to capitalize on the growth potential.
Trends in Domestic Renewable Energy Manufacturing
The COVID-19 pandemic has highlighted the vulnerability of global supply chains, leading to a cascade of rising prices and product shortages. This has caused many companies to bring their manufacturing back to the United States to ease supply chain issues. The pandemic has accelerated the trend of domestic manufacturing, particularly in the renewable energy industry.
American manufacturers have increased their production capacity for green energy technology, including solar panels and other equipment. However, production has fallen well short of demand. Despite the increase in production, U.S. manufacturers made just five gigawatts of solar panels compared to the 20 gigawatts installed in 2021. This indicates that the domestic manufacturing of renewable energy technology is still lagging behind the demand.
If domestic manufacturing continues to grow in popularity, investors may look to purchase shares in the companies making those panels locally. The increasing demand for renewable energy, the government’s support, and the desire to reduce the dependence on foreign suppliers are the key drivers of the domestic manufacturing of renewable energy technology. As the industry continues to grow, investors will be looking for opportunities to invest in companies that are well-positioned to benefit from this trend.
The Implications for Investors in the Renewable Energy Industry
Green energy is here to stay and will likely grow in importance in the following decades. About two-thirds of Americans state that they are somewhat or very worried about climate change, and green energy is one of our best ways to fight this issue. The increasing awareness of the effects of climate change, the government’s support, and the desire to reduce dependence on fossil fuels are driving the growth of the renewable energy industry.
Investors interested in the industry may look for investment opportunities that expose them to new and growing renewable technologies or look for investments in related sectors. The renewable energy industry is diverse and has a lot of opportunities for investment, such as solar, wind, battery storage, and more.
They may also consider divesting themselves of companies that focus on fossil fuels, which may lose importance as the capacity of renewables increases. The shift towards renewable energy has led to a decrease in the demand for fossil fuels, and investors are looking for opportunities to invest in sectors that align with their values and goals.
Even if you know you want to invest in renewables, finding what to invest in can be complicated. Q.ai uses artificial intelligence to help you invest toward any goal and in any economy. With its Investment Kits, investing can be simple and fun. With the help of AI-driven tools, investors can make informed decisions and identify the best investment opportunities in the renewable energy industry.
The Conclusion
Climate change is a massive problem that could impact everyone. The increasing awareness of the effects of climate change and the need to reduce greenhouse gas emissions have led to the growing importance of renewable energy. Renewable energy has gained importance as a tool for fighting against further changes to our climate.
Investors who want to profit from a greener planet might look to add renewables to their portfolios. The renewable energy industry is growing rapidly and has many opportunities for investment, such as solar, wind, battery storage, and more. Investing in renewable energy not only aligns with the values of fighting climate change but also has the potential for high returns.
