The ongoing global warming and climate change become responsible for a major change in the overall environment of the planet. This led to the government around the world to focus more on renewable energy resources more than ever. For the same reasons, the Indian government making new policies and spending more on renewable energy sources and encouraging people to use solar energy, wind energy, and biomass energy, etc. Not only it is profitable for us to conserve our fossil energy sources but also profitable in making good returns while investing in renewable energy stocks. There are plenty of reasons to invest in renewable energy stocks rather than invest in companies that often rely on fossil fuels. Here we’re going to explain these reasons which make renewable energy stocks more favourable than other energy and non-energy stocks.
Reasons to Invest in Renewable Energy Stocks
We all know that energy is always in demand. It is the key to our future. As fossil fuels fast approaching the expiration date, the only source of energy left will be renewable energy. It is clear where the fossil fuels may last for a century, the sun will likely to be around for billions of years. As the saying goes, renewable energy will soon be in huge demand. So, by investing in renewable energy stocks in the stock market, we will not only participate in the future of the planet but can also make profits out of it. But, what makes renewable energy stocks a potential investment? – Let’s find out.
High-Revenue Generating Market
If you look at the most revenue-generating listed companies, then you will find out that energy generates more revenue than any other industry. Also, there’s huge potential for future growth in this sector where China, India, and middle-east will play a major role in the upcoming years. Also, the global oil demand will further increase in the future as the no. of cars will be doubled in the next decade or two. India is already one of the biggest oil importers in the world and with the rapid depletion in fossil fuels, the only thing left to do is to harness the power of solar and wind. So, it makes sense to start investing in renewable energy stocks more than ever.
With the robust demand for renewable energy sources, the share prices of renewable energy stocks are rising and giving above-average results in the last decade. For example, the share price of Solar Industries India Ltd (SOLARINDS) has come to Rs. 1,173.05 from Rs. 392.65 in last 5 years. Similarly, there are other renewable energy stocks in India that has the average rate of return is around 6-8% and it is expected to double in the next five years.
Renewable energy stocks are potential future prospects that make them worthwhile of your money and time. It is because giving the depletion in fossil fuels, the renewable energy sources like solar energy and wind energy will most likely to dominate in the energy sector on a global scale. No doubt, when the water will on the verge of extinct, the electricity will increase in price and companies will have to rely on solar energy sources to produce electricity. This would be the time when the shares of solar companies will be at the peak. So, if you don’t own the renewable shares then you should start thinking about it!
As part of its Paris Agreement commitments, the government of India has set an ambitious target of achieving 175 GW of renewable energy capacity by 2022. With the ambitious green targets of the Indian government, the renewable energy sector has become very attractive for both domestic and foreign investors. Furthermore, the Indian government has also made different laws and policies and conserving a vast budget for the renewable energy sector. The government started understanding the importance of renewable energy resources and willing to extend the budget towards the sector. When the sector will be at its peak, the shares of renewable energy companies will rise in value and can possibly provide massive profits to the investors.
There aren’t many companies in this sector so there is a massive scope of progress within the industry. With the new technological advancements, more people will be able to afford renewable energy sources. Apart from this, the government is also doing a lot of things to encourage people of both urban and rural areas to use renewable energy sources. This scope of growth made renewable energy stock more considerable to invest in. Hope, this article helped you in understanding the benefits of investing in renewable energy stocks. Nevertheless, if you have any query or would like to add something then doesn’t forget to mention in the comment section below.