Did you know that Australians are at an all-time high with their concern for climate change (75%) and 82% of Australians support phasing out coal-fired power stations? All this concern translates into action, as Australians support recycling programs, renewable energy initiatives, AND investing in clean energy. 

Many green energy investments are also taking over the financial world. They are taking advantage of the upsurge in Australians interest in supporting businesses that use green energy or those that are building renewable energy sources. 

If you still haven’t jumped on the green energy investing bandwagon, then you might be wondering what the potential economic advantage would be to you. We will show you in the article below why you would be smarter to invest in green energy businesses. 

The Future of Renewable Energy Is Bright

Unless you have been living under a rock, you know that fossil fuels are running their course as the main energy source for the world. Not only are we running out of fossil fuels, but fossil fuels are also a major cause of global warming and the resulting climate change.

If we don’t stop burning fossil fuels, the resulting increase in CO2 in the atmosphere could result in a rapid global temperature increase. This would melt all the glaciers and icebergs in Antarctica and the Arctic, increasing the water levels.

Not only will all low-lying lands be submerged by this water, but it would also result in major natural disasters, like hurricanes, tsunamis, earthquakes, and more. 

In Australia alone, the average temperature has increased by 1.44 ± 0.24 °C since 1910. 

All of this is to say that as time goes on, it’s going to become imperative to use renewable energy sources to fuel economic growth, rather than fossil fuels. Otherwise, the future of humanity would start looking quite unstable indeed. 

A lot of newer businesses are already making renewable energy a priority because they see it as the wave of the future. They are betting on green energy sources and you as an investor can bet on that growth along with them. 

Australia Pledges Zero Net Emissions by 2050

Australia is one of the leading global coal and gas suppliers. The Australian government has pledged to bring its carbon emissions down to zero by 2050. Similar stances have been made by the UK government (all its electricity from renewable sources by 2035) and the United States (halve emissions by 2030). 

This means that in the future the reliance upon fossil fuels will reduce rapidly and renewable energy sources are going to come to the forefront. 

Are you going to take advantage of this trend by investing in clean energy ETFs or not? 

Clean Energy ETFs Are Growing Rapidly

There are many clean energy ETFs that are popping up in the investment market. This allows you as an individual investor to take part in this global uprising towards green energy. 

Clean energy ETFs are exchange-traded funds that invest in alternative energy sector stocks, like wind, solar, hydroelectric energy, and geothermal power. You might already be investing in petroleum companies, like Shell, BP, or Puma Energy. 

If you wish to diversify your portfolio to account for the changing temperament of the global investment world, then clean energy ETFs are a great way to do it. Some clean energy ETFs to watch out for are:

  • Invesco WilderHill Clean Energy ETF
  • ALPS Clean Energy ETF
  • First Trust Global Wind Energy ETF
  • SPDR S&P Kensho Clean Power ETF
  • iShares Global Clean Energy ETF

As the renewable energy market becomes hotter, more ETFs will pop up. Get in on this sector while the market is still young, so you can take advantage of any future growth.

More Job Opportunities Created

One main reason you will want to invest in green energy is to offer support to these businesses. The more Australians invest in clean energy businesses, the more funds these businesses will have to invest into furthering technological innovation. 

Not only that, but you can feel good investing in such businesses. You are creating numerous jobs and job opportunities for the Australian youth of today and your children and grandchildren. 

This also helps you build a world where your children and your children’s children don’t have to worry about their future. And they can live in a world that’s sustainable and safe.

If you wish to look your children proudly in the eye, you will want to do everything you can to secure their future. And the future of this beautiful blue planet you live on.

Green Energy Has So Much Untapped Potential 

The astounding thing about renewable energy is that there’s so much untapped potential there. We haven’t even skimmed the surface with the potential growth yet.

As businesses in the field grow, they are going to come up with new and innovative ways to tap into clean energy sources. That’s something that you will want to take advantage of by investing in it as an early adopter. 

Think about Bitcoin and how much potential it had initially when it was first introduced. No one could have imagined that it would go all the way to 93,385 AUD when it sat at 1 AUD or lower for such a long time. But every investor who bet on the future potential of BTC is now rolling in the dough. 

No one knows where the future lies. If you did, you would be a billionaire by now. 

But you can gauge the market and realize that the renewable energy sources market is in its infancy. There’s just so much opportunity there and you would be remiss if you didn’t invest part of your portfolio into it.

Some Things to Be Aware of Before Investing

Before you jump head-on into clean energy ETFs or mutual funds, there are some things to be aware of, as per below: 

Clean Energy Stocks Are Expensive

Because clean energy stocks are still new to the investment world, they are expensive. The prices could be high because the renewable energy sector has great potential and has achieved such good results to date. 

But you will need to do proper due diligence before investing in any clean energy stocks. Make sure that your portfolio is balanced and diversified. Don’t invest heavily into any one sector, be it fossil fuels or renewable energy.

Think About Investing Into International Energy Stocks

Do not invest overly into energy stocks or companies based out of the United States or Australia. Interestingly enough, China is the country that’s investing the heaviest in renewable energy sources. Japan lies third after the United States.

If you want to ensure that you don’t have too many of your eggs in one basket, you will want to invest in stocks, ETFs, and mutual funds that are in some international markets as well. 

Not Short-Term but Think Long-Term With Clean Energy

You are not going to get rich quick if you invest in renewable energy sources. Neither should you be looking for that. Think long-term when it comes to investing in businesses that are focused on green energy.

You are probably going to get the majority of your profits in green energy companies after 10-15 years, when the industry matures and the need for clean energy peaks. 

Hold your horses when it comes to selling your clean energy stocks. Don’t panic if there are fluctuations in the market, as you should be in it for the long haul. 

Invest Into Solar Power for Your Home as Well

Don’t only think about investing in ETFs, stocks, and mutual funds. But also about getting solar panels for your home, and investing in green energy in that manner. 

The Australian government has many renewable power incentives in place for any homeowner or business who wants to install renewable energy sources. These include solar panels, solar water heaters, wind turbines, and more.

In this way, you get access to clean energy at a cheaper rate. And you get to contribute to reducing Australia’s reliance upon fossil fuels.

For any additional energy that your solar panels generate, they are fed into the power grid. You will receive a monthly payment from the government for this. 

It also ensures that you have access to green energy as long as the sun is in the sky. 

Alternative Energy Investments Await

As government legislation changes rapidly due to extreme pressure from the worried public, renewable energy sources are going to become more ubiquitous. This will result in massive growth in businesses that are focused on the clean energy sector.

You might be doing your bit right now by recycling your beer cans and composting your organic waste. But you can do so much more by investing directly in green energy companies. 

New ones are popping up all the time, and by investing in them, you are betting on a brighter, greener, more sustainable future. 

Interested in learning more about Australia’s first Islamic super fund? Crescent Wealth has over 10,000 members already who are growing their wealth without compromising their core values or beliefs. Join them today and get in on the action!

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Ethical Finance and Innovation

Dr. Sayd Farook is the Executive Director of Crescent Foundation. He is Group Chief Operating Officer of Crescent Wealth and Managing Director of Crescent Finance. He previously served as Advisor to the Executive Office of the Vice President and Prime Minister of the UAE and Ruler of Dubai. In this capacity, he envisioned and executed strategic / transformation initiatives for Dubai and the UAE. Prior to that, he was the Global Head Islamic Capital Markets at Thomson Reuters, where he advised and served large corporates, multilaterals and governments in the Middle East, North Africa and South East Asia.

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