Best Ways to Invest Your Money In Renewables Projects

Techsense Team I 8:00 am, 20th November

Renewable energy has been one of the driving forces of the world. According to research by the US Energy Information Administration, renewable energy will supply more than 50% of the world’s electricity needs in 2050. This is why many companies have started investing heavily towards renewable technology development.

Potential for solid returns

Since IT companies are heavily dependent on renewable energy resources, it makes sense for them to invest in renewable projects. When IT companies invest in renewable resources, they help themselves get a step closer to their ideal technology and strategic goals.

But apart from the company itself, CIOs, IT managers and employees of IT companies can also individually invest in renewable projects. In fact, according to research by MIT, 20% of all those who invest in renewable projects, get a 20%-25% ROI.

Tips for IT companies investing in renewable projects

- Purchase renewable energy stocks

There are many renewable energy firms in the market who offer stocks for purchase. Investing in them directly will be a relatively low-risk way of investment. Additionally, some types of renewable investments are free from taxes and can be an excellent way to make some savings.

- Exchange-traded funds are an excellent investment method

Exchange-traded funds give you the access to a group of clean energy stocks which are highly liquid. By tracking indices such as the Nasdaq Clean Edge Green Energy Index or S&P Global Clean Energy Index, you’ll be able to forecast potential price movements of your stocks. You’ll then be able to make better buy/sell decisions with greater clarity.

- Direct investment can be an ideal method for IT companies to forge partnerships

CIOs can work with CEOs of renewable companies to plan for a direct investment buy-in of shares or a partnership with them. If you have majority ownership, your company will be able to make decisions about the renewable project too. Or, you can provide your technological resources to co-create/offer renewable resources to your customers.

- Invest in YieldCos

YieldCos are companies who don’t build technology to generate renewable resources. Instead, they purchase existing renewable energy generation technology (for example solar panels) and lease the operation of the plants to experts. They allow investors to purchase units and pay dividends on the energy generated by the company.

- Be careful about Greenwashing

Greenwashing is the process by which certain renewable/green companies try to make their products, services and stocks look “greener” and “more sustainable” than they are. As an investor, you should check if the renewable project you want to invest in, is authentic and truly sustainable or not.

- Keep track of Government policies for buy/sell decisions

Changes in Government policies can impact how a renewable project develops in a particular company. If there’s a change in political leadership, then the access and permissions offered to the company may be modified. This affects not only the renewable project, but your potential for returns as well.

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