Green energy, also known as renewable energy, refers to the energy that comes from natural sources such as wind and sun. This means that it cannot be depleted, making it a better alternative to fossil fuels. Fossil fuels are bad for the environment as they produce carbon dioxide, the main contributor to climate change and global warming.
Besides the positive environmental impacts of renewable energy, more people are investing in green energy due to the huge investment returns. Read on to find out about the five reasons why more people are investing in green energy;
Growing Sector
The green energy sector is growing mostly due to environmental and climate concerns. Various industries, such as manufacturing and transport, are the largest contributors to climate change due to their over dependence on fossil fuels.
Thus, adopting green energy is important to reduce this over-dependence on fossil fuels. Additionally, food industries such as soy are also adopting innovative food and energy to produce food sustainably so as to lessen the environmental impact of food production and processing.
Food innovation can be defined as the development of new processes to produce food using green energy. This means using renewable energy, such as solar power, to provide energy for food production and development. On the other hand, innovative energy means using natural fuels such as bioenergy as a global energy supply.
Unstable Fuel Prices
There was a sharp drop in fuel prices in 2020 due to the COVID-19 pandemic. The drop was caused by low demand for oil, which resulted in very low fuel prices. For the first time in history, oil prices fell to negative. This further means that the shares of oil companies also dropped, driving current and new investors away.
Therefore, people are investing in green energy because it has great potential and is less likely to be volatile. Unlike crude oil, green energy is renewable and carries fewer financial risks. Sectors heavily relying on crude oil for their operations have also started shifting and investing in green energy. For example, manufacturers are now producing low-carbon products with less hazardous environmental impact. In the transport sector, car owners are now opting for electric vehicles, which have zero carbon emissions.
New Job Opportunities
Another reason why more people are investing in green energy is because of the creation of job opportunities. Currently, over 12 million people are working in the renewable energy sector. For example, solar installers are important as they help assemble and install solar panels on land or rooftops. On the other hand, electrical engineers are needed to build electronic systems to operate wind turbines.
Even after installing solar panels and wind turbines, technicians must constantly inspect them. Creating these job opportunities will help solve the unemployment crisis, which is currently at 6.18%.
Green energy has also indirectly created jobs in the manufacturing sector. The equipment to convert renewable energy into electricity must be made and distributed. Therefore, it also impacts the transport industry by creating jobs for drivers.
High Investment Yields
According to IRENA (International Renewable Energy Agency), renewable energy has the potential to earn 3 to 8 times more than the initial investment. In accordance with the Transforming Energy Scenario, it would cost $19 million more to use renewable sources to keep global warming below 2 degrees Celsius.
However, this investment will bring benefits between $50-140 million dollars, by the year 2050. This will also positively contribute to the world’s GDP raising it by 2.6%. Therefore, investing in green energy not only helps save the environment but also a good catch for investors.
Investing in green energy also helps reduce financial risks as it is not as volatile as crude oil. This is because with time oil reserves may dry up, but there is an unlimited supply of renewable energy. Consequently, crude oil is also bad for the environment and submits to the pressures of supply and demand which may lead to high inflation rates.
Low Cost of Operation
When it comes to estimating the cost of operation, green energy is much more cost-effective than using fossil fuels. According to the UN, the shift from using fossil fuels to using green energy has helped save $US 56 billion.
Although setting up wind turbines and solar panels are quite an investment, maintaining them is much cheaper. The energy produced from renewable sources is also much cheaper than fossil fuels.
For example, soar energy costs an average of 3 -6 cents per kilowatt hour, while fossil fuels cost 5-17 cents per kilowatt hour. Also, solar panels and wind turbines need very little maintenance after installation.
Therefore, more people are investing in green energy due to the low operational costs. This further means there will be more dividends as investors will have more capital investments and annual fixed costs.
Bottom-Line
More people are investing in green energy because of lower financial risks and high dividends. However, the main catch here is the sustainability of using renewable energy sources and their positive environmental impact.
People are also investing in green energy since it is a growing sector with more potential. Food industries have started using green energy in their food production process to produce sustainable food. The manufacturing sector has also started using renewable energy because it is much cheaper and doesn’t pollute the environment. Green energy is also attracting more people as there is the creation of jobs, thus reducing the unemployment rate among skilled workers.
