Investing in Green Technology – the Future Is Now

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Investing in Green Technology – the Future Is NowGlobal new investment in renewable energy increased 2% in 2017 with total transactions also increasing 1%. The industry ended 2018 with new investments of $279.8 billion and transactions totaling $393.8 billion. 2018 is on track to be another strong year for investment with total new investments in the industry at $211.4 billion through the third quarter. Green technology investments are taking a variety of forms, with increases in wind power and electric vehicle developments, the installation of renewable power capacity reaching new highs and significant increases in public market investments worldwide. Across the globe in 2018, Asia-Pac is leading investment with solar powered innovations drawing in the greatest funding. Thus, what was once a mere glimpse into the future has indeed now become a reality as countries around the world are making substantial investments year over year in green technology.

What’s Behind Green Technology Investing

Green technology investing, also referred to as clean technology investing, typically involves the selection of investments in companies with sustainable and environmentally friendly practices and products/services. While some clean technologies offer improvements that increase resource productivity and efficiency, others decrease environmental impact. As green technology continues to emerge as a growing force, several strong industry clusters have emerged with varying levels of investment as innovation trends emerge and change. The United Nations Environment Programme (UNEP) breaks the industry into the following categories: wind, solar, biofuels, biomass, small hydro, geothermal and marine. As global green technology investments have grown so to have the number of countries participating. The UNEP breaks down global investing by United States, Brazil, Americas (excluding U.S. and Brazil), Europe, Middle East & Africa, China, India, and ASOC (excluding China and India). In 2018, Bloomberg reports Asia-Pac at large as the leader in investments with just under $40 billion total.

Industries

In 2017 green technology continued to dominate new power generating capacity with greater than 60%. Solar and wind specifically have continued their lead receiving $161 billion and $107 billion in new investments respectively in 2017. With the trend for solar and wind maintaining its momentum in 2018, electric vehicles have also been gaining attention. The initial public offering (IPO) of NIO has boosted interest. NIO is China’s rival to Tesla. The company’s IPO raised $1 billion. NIO trades on the NYSE with a price that has gained to $7.96. China overall was also reported as the leader in electric vehicle sales for 2017 with a total of 533,000.

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