How to Invest in Renewable Energy

by Contributor ; Updated July 27, 2017

How to Invest in Renewable Energy. Many people have become concerned about the future of oil, coal and natural gas. These non renewable energy sources will not be available forever and alternative sources of renewable energy will be necessary in the future. You can take part in the world's energy transformation by investing in renewable energy sources including: wind, geothermal energy, biomass, biogas, fuel cells, microturbines and solar energy. Investment in renewable energy sources today may bring you big profits tomorrow.

Step 1

Look to China for the formation of new companies involved in renewable energy sources. Four Chinese companies, engaged in alternative energy include: Suntech Power Holdings, China Biodiesel International, Renesola and China Sun Biochem. Alternative energy companies doing significant business in China include: Canadian Solar Inc., Nordex, Camco International and Suzlon.

Step 2

Identify and invest in established companies that are moving into the renewable energy market. This type of investment is less risky than investing in small start-ups. Favorable established companies include: GE, Sharp Solar, Johnson Controls and Waste Management.

Step 3

Consider investing in companies that are part of the Climate Action Partnership. Together, these companies are lobbying for a nationwide reduction in carbon dioxide emissions. Participating companies include: GE, DuPont, Alcoa, Caterpillar, Duke Energy, PG&E, BP, FPL Group, PNM Resources and Lehman Brothers.

Step 4

Watch for the formation of renewable energy focused mutual funds. While there are not many to choose from currently, such funds will appear in the future. Current funds include the New Alternatives Fund and the Guinness Atkinson Alternative Energy Fund.

Step 5

Check out exchange traded funds (ETF's) which can be bought and sold like stocks. Funds to look for include the following: PowerShares WilderHill Clean Energy, PowerShares WilderHill Progressive Energy, Market Vectors Global Alternative Energy and First Trust NASDAQ Clean Edge US Liquid.

Warnings

  • Don't limit yourself to small start-ups. You may get lucky, but you could also lose. Don't get caught in scams. Whenever there is a boom, there are scam artists out to make money. These people tend to target unsophisticated investors. If you are unsure, contact a financial advisor.