Investing in renewable energy stocks can provide investors with higher returns than the market average. The rapid growth of renewables over the last decade has dramatically exceeded expectations.
Renewable energy providers are ramping up their capacity to meet growing demand for clean, green power. The industry is expected to generate 60% of the world’s electricity by 2035.
The cost of renewable technologies has fallen substantially. Solar and wind farms cost a fraction of the price of a coal-fired plant, and their operating costs are relatively low. However, the growing number of players and higher technology costs put pressure on returns.
The energy industry has made tremendous strides in efficiency and sustainability. In the US, for example, renewable power has outperformed fossil fuels for more than a decade.
The cost of large-scale solar projects has fallen 85% in the last decade. With the advent of the clean energy revolution, companies are exploring new profitable offtake markets for electricity. Data centers, for instance, are a potential area for growth.
With the development of efficient operating models, the renewables industry has moved forward faster than expected. But the challenge is finding the right land to build wind farms. The supply chain is becoming more complex. The demand for more choice is also increasing.
As the renewables industry scales, it is necessary to develop more advanced analytical systems to manage the growth. In addition, utilities must compensate for the loss of centralized control.
In addition to the growth in renewables, national regulators are working to level the playing field for green investors. These reforms include requiring utilities to commit to digital transformation.