In my Sept. 10 column, I told you about the profit potential in solar energy. But why stop there? Renewable power use is expanding rapidly across the board. And there are fortunes to be made. Today, I’ll give you a trio of picks that can help you do just that.
Are there big trends, the kind of “Megatrends” we like to ride? Oh, yeah. In fact, in the first half of 2020, 22.2% of U.S. electricity came from renewables. And, depending on what happens in November, uptake could kick into overdrive.
I’ll explain the electoral factor, and I’ll also give you a pick that should thrive no matter what happens at the polls and who takes the oath in January 2021.
Let’s start, though, with some basics. There are three types of renewables: solar, wind and hydropower. Here’s the generation breakdown …
Wind power provided 9.1% of U.S. electricity in the first half of the year, up from 7.7% in the same period of 2019 and 7.1% from the same period of 2018.
Hydro has remained steady for the past few years — providing 8% of U.S. electricity in 2018 and 2019 and 8% in the first half of 2020. That’s because you can’t build new rivers like you can solar plants or windmills.
Solar power provided 3.4% of U.S. electricity in the first half of 2020, up from 2.7% in the same period of 2019 and 2.3% in the same period of 2018.
All renewable energy is small compared to natural gas, coal and nuclear power. But that just means the opportunity for growth is enormous …
Looking at this chart, you can see that natural gas power generation continues to grow. But coal-fired power is falling off a cliff. That’s the opportunity for renewables.
That’s just in America. Globally, renewables are still a small piece of the pie, too. But again, that just means they have room to grow.
Because, as you can see from this next chart, global use of renewable energy is ramping up, and sharply …
How’s that for a megatrend? And it’s just getting started.
In fact, renewable energy production is projected to increase fivefold in the next decade. That will take it from roughly 100 gigawatts (GW) of installed capacity today to around 500 GW in 2030.
And here’s something else: Starting in 2021, any new commercial or residential property built in California MUST have solar panels. California is a trend-setter for the nation, so expect that trend to spread.
Political Winds
What could really kick solar — and wind — into overdrive is if Democratic presidential nominee Joe Biden is elected.
As I explained in my Sept. 10 issue, Biden has committed to the “Green New Deal,” which, among other things, boosts America’s commitment to renewable energy — solar, wind and hydro.
Biden could win, he could lose — I’d say his odds are 50-50. So, we want investments that can ride the big trend already in place — and that stand to cash in if the Green New Deal becomes policy.
So, How Can You Play It?
There are, in fact, three very liquid alternative energy ETFs you can buy. They are …
The iShares Global Clean Energy ETF (Nasdaq: ICLN, Rated C). This fund invests in 30 companies tracked in the S&P Global Clean Energy Index and is weighted toward solar. It has an expense ratio of 0.46%. My Supercycle Investor subscribers already own it.
The Invesco Solar ETF (NYSE: TAN, Rated C). This fund holds a basket of 28 solar-leveraged stocks tracked in the MAC Global Solar Energy Index. It has an expense ratio of 0.71%.
The First Trust ISE Global Wind Energy Index Fund (NYSE: FAN, Rated C-). This fund holds a basket of 45 wind-leveraged stocks tracked in the ISE Global Wind Energy Index. It has an expense ratio of 0.62%.
These funds will help you do well. Individual stocks in this industry could help you do even better. When it comes to wind and solar, the sky’s the limit on profit potential.
All the best,
Sean
P.S. — There’s another incredible opportunity in another sector that doesn’t usually float around in the mainstream: Gold.
Although gold saw a boom earlier this year because of the COVID-19 recession, it’s really nothing compared to how high it is heading. There has been a massive shift of capital into precious metals — just look at what Warren Buffett recently did. We’re now at a point where investors can earn unprecedented profits because they’ll have invested early.
And this opportunity won’t last long.
That’s the reason why I’m hosting a FREE urgent briefing detailing how you can make the most of this unique opportunity on Wednesday, Sept. 23 at 2 p.m. EST.
