The Financial Side of Green Energy

Magnolia Potter - Contributing Writer

Posted on Wednesday 18th March 2020

It’s becoming nearly impossible not to be aware of the danger our climate is in. Non-renewable energy sources like fossil fuels have created a variety of issues for our planet. For starters, they release carbon emissions that contribute to climate change and other environmental issues. 

We’ve simply relied on these fuels too much and for too long. But, they’re called non-renewable for a reason. For as harmful as they might be to the environment, they will also eventually run out. So, it’s no wonder as to why renewable energy sources have started to grow in popularity. Not only are they better for the planet today, but they can help to create a more sustainable future. 

For businesses and individual investors, though, it’s important to know the ins and outs of green energy. Oil and other energy industries have been lucrative for years. Can renewable energy sources be just as profitable?

Recognizing Real Renewable Resources

Fossil fuels have become such a part of our culture that most people recognize the value they’ve held for years. But, not everyone is as educated when it comes to renewable forms of energy. 

If you want to know if an energy source is truly renewable, you have to ask yourself if enough of it can be naturally produced by the earth to compromise our use. Solar energy and wind energy are excellent examples of renewable resources because they’re not finite. We’ll never run out of sunlight or wind. 

Trees, on the other hand, are only renewable to a certain extent. Yes, new trees can be planted, but many parts of the planet are already experiencing deforestation which can contribute to climate change, and impacts thousands of animals worldwide. 

There are even some more “strange” sources of renewable energy that are being tested, including sugar, and a special type of cell from jellyfish. While these sources are likely years from becoming usable by the masses, doing your research on various renewable forms now can help you to make smarter investments in the future. 

Your Investment Potential - and Possible Risks

So, is it possible for a renewable energy source to come along that will produce a high return on investment? Unfortunately, the answer is unclear right now. As oil becomes more scarce, the value will decrease. As renewable energy sources grow in popularity, their value likely will continue to increase. Finding that one source that will “lead the charge,” so to speak, will be the key to making a smart investment. 

Today, green energy seems like a good and smart investment for governments to support. China is investing up to $360 billion in renewable energy, and already in Iceland, the country is running on 86% renewable energy. 

As a business or individual, though, the rewards of investing in green energy haven’t been extravagant - at least, not yet. That doesn’t mean things won’t change as oil becomes more scarce. But, it’s important to know the risks of investing before you make that decision. Solar panels can catch fire. Wind turbines can also overheat and even explode. They also pose a risk to flying animals like birds and bats. No one knows whether those risks will prevent those renewable sources from taking over for fossil fuels, but you have to consider safety when taking a risk of your own, by investing your money. 

Looking to a Greener Future

There’s little doubt that we’ll focus more on renewable energy sources for the future. But, when it comes to the financial side of green energy, knowing where to invest your money now can mean the difference between success and disaster. 

There is also little doubt that renewable energy will continue to improve as we find ways of harnessing it. The “risks” and potential drawbacks of popular sources like wind and solar will become fewer as we rely on those sources more. A combination of natural resources will also likely come forward at some point that harnesses the power of several energy sources at once. Thinking about that kind of clean, green future can make it exciting to want to invest now. 

So, whether you’re a long-time investor looking for something new or a business that’s been waiting to jump on board with renewable energy, the best thing to keep in mind is that until these renewable sources become a priority for everyone, the return on your investment will likely be hit or miss. But, if you stick with it and invest now, you could end up with a larger payout as we turn further away from oil.

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