Renewable energy has been slowly taking over the energy market for years, but today – and partially because of the effects of the coronavirus pandemic – it clearly has momentum on its side.
Governments, corporations and investors are now betting on this disruptive energy market with the promise of good money and a better future. So why should you invest in renewables now? Maybe the right question is: Why wouldn’t you?
Reason 1: It is the perfect storm
Government policies, subsidies, and tax credits are giving a tailwind to boost the clean energy evolution while the demand for electricity is continuously growing. The United Nations’ and the European Union’s climate goals give an extra push to the market. In the United States, the Biden administration’s efforts mean that the US is also investing heavily in green energy.
The market boosting policies and tax credits drew the attention of the big fish: the corporations, who are key to demand and financing on the energy market. US corporations acquired close to 30,000 megawatts of solar and wind energy in assets or in power cumulatively in the last couple of years. That is enough to power the households of a small European country.
The United Arab Emirates is setting world records in solar power plant development. The UAE government’s ambitious strategy aims to increase the contribution of renewable energy in the total energy mix to 44 percent by 2050. Also, Europe generated more electricity from renewables than from fossil fuels in 2020.
Reason 2: The cheapest electricity
The cost to build solar and wind power plants decreased, while the efficiency of the technology increased as tech innovation drives the renewable energy market forward. The growing efficiency of solar panels, inverters and wind turbines make more energy than ever before. The general support and maintenance costs of these power plants are also minimal compared to the fossil fueled ones. The produced energy per dollar of investment is on the rise.
Energy storage technology is also improving, which makes it possible to optimize the energy supply of the power plants to the grid. The improvement of energy storage has a big impact on the bright future of renewable energy.
According to the International Energy Agency’s (IEA) world energy outlook “the world’s best solar power schemes now offer the cheapest electricity in history with the technology cheaper than coal and gas in most major countries.” The IEA is forecasting 43 percent more solar output by 2040 than it expected in 2018, partly due to the fact that solar power is 20-50 percent cheaper than before.
Reason 3: “The sure thing”
The only certain thing on the energy market these days is uncertainty. The unprecedented fallout from the pandemic had dramatic effects on the global energy market with fossil fuels taking the biggest hit.
The demand for electricity on the other hand is on the rise. To meet the demand, governments make energy investment decisions and bet on cleaner energy, because it’s cheaper and less risky, and it also help these countries to meet their climate goals.
These decisions have long-term consequences. This decade is the time to invest in renewables as it carries minimal risks and decent long term profits. One of the few certain things about the future of the energy market is that slowly, but surely renewables will take over.
Beyond the financial benefits of backing renewables, investing in the new wave of energy is an investment in a better future that will help safeguard the future of the planet.
