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Investing in SRI/ESG: The decade’s next big growth trend?

Investing in SRI/ESG: The decade’s next big growth trend?

November 04, 2021
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2030 is targeted for incredible change in the US’s fight against climate change. As I have mentioned before, the US would like to be at 100% clean-sourced electricity by 2035, but there are many changes likely by 2030, for both the US and around the globe. Here are a few bullet points that might pique your interest and have you thinking this next decade could be the next big growth trend, whether you’re into SRI/ESG investing or not.

  1. The US’s large-scale battery capacity rose 35% over 2020 to reach 1,650 MW. Going forward, utilities are planning to increase capacity by 10 GW over the next two years.1
  2. As of December 2020, five states (California, Texas, Illinois, Massachusetts and Hawaii) account for 70% of the US battery storage power capacity.1
  3. Solar power has grown 4,000% over the last decade, but it still only represents 3% of the US’s power source. In order for the U.S. to raise the country’s solar power as an electricity source from 3% to 40% by 2035, which means solar growth rates will need to triple or even quadruple by 2030, according to the Department of Energy.2
  4. The next decade will need to increase scale significantly to reach net zero by 2050. According to the International Energy Agency, scaling for solar and wind needs to reach annual additions of 630 GW of solar photovoltaics and 390 GW of wind by 2030- that’s four-times the record levels set in 2020.3
  5. The European Union has set a goal to build devices that split hydrogen atoms from oxygen, called an electrolyzer, that can convert 40 GW of renewable electricity into hydrogen by 2030. 4
  6. The Biden administration has set a goal of reducing the cost of renewable hydrogen by 80% by 2030.4
  7. Scientists at the Australian National University have produced a more efficient bifacial solar cell, setting a new world record in the process. The panels are dual-sided so both the front and the back of the solar module can generate power. A mirror is then placed behind these cells which allows incoming sunlight to be absorbed twice, which add an additional 30% power generation.
  8. The U.S. now generates almost 20% of its electricity from renewable sources such as wind, solar and hydropower. 6This is up from 2019 when it was less than 9%.7
  9. One important mitigator for Climate Change is the global cap-and-trade carbon allowance market. Companies are allotted a set amount of carbon emissions and if they want to increase their allotment they can do so by purchasing unused carbon allotments from other companies from an exchange. Revenues from the carbon exchange will be used to offset carbon, and can be invested in by investors. This can ultimately aid the movement to stop climate change, support responsible investing, and incentivize global change.
  10. Our northern friends in Canada have a plan to increase their renewable use to 90% of its electricity sourcing by 2030.8

Do these statistics make you want to invest in renewable energy? If so, your first step would be to connect with a professional who specializes in this arena. Just because there’s a lot of room to grow doesn’t mean all renewable energy companies are likely to be good at what they do, be profitable, or even survive. A Chartered SRI Counselor (CSRICTM) professional is dedicated to keeping up with the trends and the details of this sector. You can conduct a search for a CSRICTM professional near you by using this search tool.

 

1 Patel, Sonal. EIA: Large-Scale US Batter Power Capacity Slated for Fourfold Expansion in Two Years.  https://www.powermag.com/eia-large-scale-u-s-battery-power-capacity-slated-for-fourfold-expansion-in-two-years/. 19 Aug 21

2 Stevens, Pippa. Solar costs dropped more than 70% over the last decade, and Biden wants to accelerate the trend.https://www.cnbc.com/2021/08/17/biden-administration-plan-for-lowering-costs-of-solar-energy.html. 17 Aug 2021

3International Energy Agency’s Net Zero By 2050 Roadmap

4 Dezem, Vanessa. Why Hydrogen is the Hottest Thing in Green Energy. https://www.bloomberg.com/news/articles/2021-06-19/why-hydrogen-is-the-hottest-thing-in-green-energy-quicktake. 18 Jun 2021.

5 Cohen, Ariel. Dual-Sided Solar Panel Breakthrough Means Massive Efficiency Gains. https://www.forbes.com/sites/arielcohen/2021/08/30/dual-sided-solar-panel-breakthrough-means-massive-efficiency-gains/?sh=13bc68a75b24. 30 August 2021

6 Weil, Dan. How Big Can Renewable Energy Get in the Next 10 Years? https://www.wsj.com/articles/renewable-energy-us-power-11626098450. 12 Jun 2021

7 Lack, Simon. The Hidden Cost of Renewables. Catalyst Insights. https://catalyst-insights.com/the-hidden-cost-of-renewables/. 24 Nov 2020.

8Joslyn, Dillon. The ALPS Clean Energy ETF (Ticker: ACES) Continues to Surge Following Biden Electionwww.alpsfunds.com. 24 Nov 2020.

 

Carrie Waters Schmidt is a registered representative of Lincoln Financial Advisors Corp., a broker/dealer (member SIPC) and registered investment advisor. Equanimity Wealth Planning and Investing is a marketing name for registered representatives of Lincoln Financial Advisors.    CRN-3901696-110421