The legacy energy sector has been hurting ever since oil prices fell a few years ago. Add the global pandemic, recession, and k-shaped recovery and energy has had a bad time of it. However, things are looking up all across the energy industry. The pandemic is getting better in the USA, UK, Europe and elsewhere as vaccinations take hold. We can expect to see an economic boom at least this year and perhaps for several years if Biden’s infrastructure plans work out. In this like we are looking at energy investments for 2021 and beyond.
Best Renewable Energy Stocks for 2021
The Motley Fool discusses the best renewable energy stocks for 2021. The world is steadily moving towards renewable, clean sources of energy and, especially, away from hydrocarbon sources like oil and coal. Wind, solar, geothermal, biomass, green hydrogen, and ocean currents and waves are all renewable, clean energy sources. Transitioning to these energy sources will require trillions in capital and will happen over decades. Choosing the right renewable energy stocks in 2021 could result in handsome profits for decades to come.
Their top three choices are Brookfield Renewable Partners, First Solar, and NextEra Energy. A mix of these three companies would give you access to solar panel technology, utilities heavy in solar, and multiple renewable energy approaches worldwide.
Best Solar Energy Stocks for 2021
If you are specifically interested in solar energy investments, you can break this down into the operation of solar power generation facilities, solar panel installation, batteries and other devices to store energy, and the design and manufacture of solar panels. Two of the companies mentioned I regard to renewable energy are top picks for solar as well. These are First Solar and Brookfield Renewable Partners. The third is Solar Edge Technologies. First Solar makes solar panels and Solar Edge makes solar power optimizers. And, Brookfield operates across the entire renewable and solar spectrum.
Energy Transition Investment Trends 2021
BloombergNEF published an insightful piece about how investment is transitioning within the energy sector. They consider not only specific renewable energy sources but also heating and vehicle electrification and various carbon capture and low-carbon projects. Their bottom line is that total investment in renewable went over $500 billion last year with the lion’s share going to upgrading renewable energy capacity ($300 billion) and electric vehicles ($139 billion). $50 billion went to offshore wind facilities as well as to home installation of energy-efficient heat pumps. The nations leading the charge are the EU, China and then the USA. Europe increased its investment last year while both China and the USA reduced their money going into this sector.
Top Energy Stocks for 2021
Despite the fact that the world will gradually move away from carbon-based fuels, they are still the major part of energy production and a necessary one during years when it rains less and hydro is down or when the wind does not blow or at night! As the pandemic relents and the economy booms, companies like Exxon and a legacy energy investment like Kinder Morgan will do well. Market Watch has a very thorough article about energy investments for 2021 that are expected to go up nicely.
Energy Investments for 2021 and Beyond – Slideshare Version