As the global economy steadily grows and populations increase, demand for power looks set to soar. I think buying renewable energy stocks is a good idea for me as the need for clean energy in particular booms.
Assurance and risk management business DNV expects electricity consumption worldwide will rise 10% between now and 2050. It predicts that green energy consumption will soar past demand for fossil fuels too.
DNV also thinks solar power will account for between 40% and 45% of all electricity by the middle of the century. It predicts too that wind power will be responsible for between 30% and 35%.
3 renewable energy stocks I’d buy
So which renewable energy stocks should I consider buying for my portfolio? Here are three green power giants on my radar right now.
#1: US Solar Fund
As DNV says, solar power looks set to be the most popular form of green power going forward. This is why I think buying US Solar Fund could be a good idea.
You may have guessed that this fund focusses on investing in solar farms in the US. This is another reason I like this particular energy share as government support for the solar sector is particularly strong in the States.
One problem with solar power is that the pollution it emits is higher than that of other renewable sources. This means legislation helping the industry might not be as favourable in the future.
Still, as things stand today, I believe the potential rewards of owning US Solar Fund shares outweigh this risk.
#2: Greencoat Renewables
I also like Greencoat Renewables because of its geographic footprint. In this case, its assets can be found in Ireland, France, Spain, Sweden and Finland.
This is important because power generation from renewable sources can be extremely unpredictable. When the sun doesn’t shine and the wind doesn’t blow, profits can take a significant hit.
The uncertainty related to weather conditions is still a risk to Greencoat Renewables, which focuses almost entirely on wind farms. But, in my opinion, it offers more security than businesses whose assets cluster around a smaller area. It can realistically expect favourable weather conditions to reign in some of its territories at all times.
#3: Gore Street Energy Storage Fund
The erratic nature of renewable energy generation actually plays into the hands of firms like Gore Street Energy Fund.
This renewable energy stock buys and builds battery storage assets which accumulate power and deploy it as and when needed. It therefore plays a critical role in keeping the flow of electricity moving when power generation from wind turbines and the like begins to drop.
Gore Street is focused on the UK and Ireland, though its current pipeline is geared toward expanding in the US and Western Europe. Demand for its services looks set to grow rapidly as the number of green energy projects soars.
I’d buy Gore Street even though rising competition in the energy storage industry poses a potential threat.