július 18, 2021

Arabian Business

A beginner’s guide to investing in renewables

Considering the nature of renewables is far from volatile, they make for smart investments, and benefits can be reaped for many years

Investing in renewable energy is much safer, more sustainable and less panic-inducing than the short-term, high-risk, high-reward wealth building process that day trading is perceived to be. Considering the nature of renewables is far from volatile, they make for smart investments, and benefits can be reaped for many years.

Solar energy is one of the most profitable investments one can make, both for the planet and one’s finances, and they are much more accessible today than one would think. Renewables bring slow, steady, and sustainable returns – one just needs to know where to start.

Have realistic expectations: Renewable energy is slow money, but sure money

Clean energy stocks are relatively stable in their growth, so it’s important not to have hopes of unrealistic miracles like one would chance upon on a good day at the stock market. Clean energy stocks reap returns that genuinely last – one can expect consistent returns for a couple of decades or more. Moreover, as an investor, you don’t really have to worry about reallocating your funds from time to time in anticipation of a loss. The chances of a huge loss are surprisingly slim with renewable energy investments.

There are multiple ways to invest in renewable energy

If you are looking to zero your electricity bills, you can invest in a household solar installation. The region receives 300 plus days of sunshine every year, and a solar installation can help do away with electricity bills for life. However, if you live in an apartment and cannot invest in your own photovoltaic installation, you can invest in a community solar power program like the one run by SunMoney to zero your bills. It runs the world’s largest community solar investment program for individual and small investors.

If you are confident with stocks, invest in renewable and green company stocks

Keep in mind that this may require daily or reasonably regular attention, considering how volatile the financial markets can be. If you can devote that kind of time to managing clean energy stocks, it can be a lucrative option. It is essential to diversify your portfolio to mitigate risks. Study the stocks you are planning to invest in and keep track of how those companies are performing to be able to make the right move at the right time to try and maximise your returns.

The closer your money is to the renewable you are invested in, the higher the returns

If you are looking to invest a more considerable sum or want to invest in renewable energy in a more significant manner, you can look for a suitable renewable energy fund. This kind of investment requires more capital and a slightly higher risk-taking ability, but the returns are more than worth it. Look for a renewable energy fund with low-value tickets to minimise your capital input and gain the advantage of being an early investor in that fund. One can even consider becoming an angel or seed investor in an innovative green energy-related start-up (smart grid, smart metering, electricity storage and the like). These can be higher risk investments, but if you have the time and the courage, this can yield significant returns.

Solar energy is one of the most profitable investments one can make, both for the planet and one’s finances.

Remember that you are actively saving the planet and not just making money

Renewables can be a powerful catalyst for helping economies recover from the pandemic. They can dramatically reduce countries’ dependence on imported fuel and create new and secure jobs in the process, all with zero emissions. Renewables actually help elevate the quality of life, business, and the planet. The impact solar panels, plants, and appliances create is incredible, not just for existing users but for generations to come, while investors can enjoy consistent returns for decades.

The requirement for clean energy is on the cusp of a massive boom, considering how electricity is becoming the new fuel. This is probably the best time for investors to shift their focus to future-aware investing that can help them reap impressive returns while contributing consistently towards caring for the planet and reducing our collective carbon footprint. It won’t be long before renewables are not “the next big thing” because they will be the very thing we need for humankind to continue to survive on this planet.

Zoltan Rendes, CMO and Partner at SunMoney Solar Group.