While some investors are still skeptical about the growth of green energy companies, others see the financial opportunities that this sector offers. With record-breaking sales in 2019, the renewable energy industry achieved a milestone by becoming a self-sustaining segment, meaning that the market itself is providing the product or service for future sales.
Renewable energy companies raised $16.9 billion in capital in 2019, and almost 90% came from retail and institutional venture capital. It’s an indication of investors’ growing confidence in the market, which saw its value rise by 16% in 2019. The sector is attracting big money because it’s a solid business opportunity and a hedge against the ongoing climate change movement. In 2022, the worldwide market value of the solar industry is projected to hit $126 billion.
The global market value of the solar industry is projected to reach $126 billion by 2022.
The renewable energy business achieved a record-breaking year in 2019, closing out the year with 13% yoy growth in sales. The market grew by 5.9% in the last quarter of 2019.
The growth was fueled by the strong demand for rooftop solar systems, which increased by 11% in 2019, according to the Solar Market Report published by research firm GTM Research.
Growing Institutional & Retail Interest
While retail interest in solar energy has declined in recent years, investment opportunities have increased as of late. Institutional and venture capital investment in the renewable energy industry reached a record high in 2019, according to the Solar Industry Investment Review published by the Global Commission on Sustainable Investment.
According to Gainsbury, the manager of the Global Commission on Sustainable Investment, investment in the renewable energy industry increased in 2019 and is projected to rise further in the coming years.
“There is a trend of clean energy becoming a sustainable mode of investing, and the sector is attractive because of the rising demand for electricity, which is being driven by population growth and an increased focus on sustainability,” Gainsbury said. “The long-term investment opportunities in the sector provide good risk-reward for investors.”
In 2019, the renewable energy sector raised a record-breaking $16.9 billion in capital, according to a Venture Capital Investment Review published by the Sustainable Energy & Advocacy Organization. The report covers the major capital-raising events that took place in 2019, including corporate venture rounds and private placement offers. More than 90% of the capital came from institutional venture capital and private equity, which indicates that there’s still plenty of room for growth in this area.
This year’s capital raise was led by FirstSolar, which saw its stock price rise 27% in the last year alone, followed by SunPower, which saw its stock price increase 16%. The report indicates that despite the fact that the sector is still in its early days, it’s becoming a popular investment option for accredited investors who want to play a role in shaping the future of energy.
The renewable energy companies that we’ve rated #1 on our list in 2020 are already showing significant earnings growth, and this trend is expected to continue in the coming years. These companies are leaders in their respective fields and are poised to become large and profitable companies, providing investors with a good return on their investment.
The industry’s top three players, FirstSolar, SunPower, and Sun Microsystems (formerly Sun Microsystems Inc.), all saw revenues rise by 25% in the last year, while BlackRock’s iShares Cleantech Small Cap Value Fund (IJSFC) grew its revenues 12% in 2019. The industry’s revenue is projected to hit $27 billion in 2022.
What To Watch
While there are a few solid and consistent investments to choose from, it’s still a risky area, which is why we’ve limited our list of the best renewable energy companies to these three stocks. Stocks can change hands for a variety of reasons, so it’s important to continuously monitor the market and these stocks’ performance, to get the best possible return on investment. In the last few years, this segment has become a popular play area for hedge funds and other institutional investors because of its solid growth prospects and unique investment opportunity.