The market for green energy isn’t going away anytime soon. Estimates suggest that global energy consumption will increase 40% in the next twenty years, as global populations grow and energy becomes an increasingly necessary part of everyday life. Fossil fuels can only carry so much of that weight.
Additionally, as the threat of climate change rears its ugly head, people are becoming more and more environmentally conscious, meaning that those that can afford to make the switch are already trying to figure out how to incorporate renewable energy into their lives.
What green energy companies will see the most growth? Hydropower will most likely come out on top. A single dam can create a lot of energy, and unlike solar or wind energy, productivity is not at the mercy of the weather.
However, solar and wind power will also see strong growth. Together, they are expected to generate 16% of the world’s power by 2030, up from 3% today. Solar will likely do especially well in areas that lack modern grid infrastructure, as well as with individualists who want to become self-sufficient, due to the strong and still-emerging market for roof units. Analysts expect to see more than 100 GW produced by roof units in South America alone by 2030.
Currently, green energy is still very dependent on government subsidies. Companies are still trying to figure out the most effective ways to make use of renewable energy, which means that many people are holding off on changing their energy plans until the industry has become more cost-effective.
In the meantime, green companies are in a precarious position. Some governments are more supportive of green energy than others, and a change in government to a less green-friendly administration can seriously damage the industry, at least in the short term.
Investing in green energy in the short term is a risky move. Even if the stock seems to be going up now, government actions can hit the industry hard, and the current U.S. administration does not seem to be as eager to subsidize renewables as the previous.
However, as far as long-term investments go, green energy looks good. The fact that the industry has not entirely come into its own yet suggests that it has lots of room to improve, and there’s no doubt that there will be demand. According to Bloomberg New Energy Finance, renewable energy will count for more than 60% of the energy produced by 2030, while non-renewables will fall out of favor.