Stocks in renewable energy have surged amid a more sobering picture for traditional energy brands. While oil giants like Shell and BP have suffered from nose-diving profits as a result of the Covid-19 pandemic and crude oil price falls, companies dealing in cleaner fuels have plenty more to be happy about.
For a time the traditional energy brands had been able to survive such downturns in fortune, as there was no alternative to dependencies on oil and gas. But with new initiatives being raised to combat climate change, it has become evident that companies who invest in low carbon energy are the future.
This can be seen in the financial performance of key new players such as the energy storage company Alfen. The Dutch brand has been witnessing a solid rise in its stock price over the past 12 months. As of October 2020 shares in Alfen were up nearly 250% on the previous year.
It’s been a similar story at ITM Power. The UK brand has become a market leader in manufacturing hydrogen energy equipment. ITM Power’s share price saw astonishing growth of over 400% in the early summer months.
Ceres Power Holdings is another British renewable energy firm that has been enjoying strong trading in 2020. Despite the challenging business environment, the fuel-cell technology brand has seen its share price rise by nearly 150% in the past year.
Such impressive results would be unthinkable without significant government backing. But with major world leaders pledging to back hydrogen-focused technologies to reduce carbon dioxide levels, it’s evident that such renewable energy brands will be pivotal in targeting net zero emissions by 2060.
US brands out of the loop
However, the American government’s absence from the climate change debate could leave the nation’s renewable energy brands in the lurch. It’s a stark contrast from the picture in Europe where brands like Spain’s Solaria Energia y Medio Ambiente and Norwegian hydrogen brand Nel are both enjoying rises in stock prices of over 90%.
As such there is a real sense of urgency for politicians in the US to get behind the nation’s fledgling renewables industry. Thankfully there are some positive scenes in evidence. Ahead of the US presidential election, there are already signs of a so-called ‘Biden Bump’ for those brands who could benefit if the Democrat candidate came to power.
This can be seen in the fortunes of funds such as the First Trust Nasdaq Clean Edge Green Energy Index Fund that is now trading at a record high. It’s a similar story with the likes of the iShares Global Clean Energy Exchange Traded Fund that is now at its highest point since 2010.
Much of the fortunes of these funds rests on what happens on Tuesday. But there will be many shrewd investors who will be betting on the fortunes of the Invesco Solar ETF should Biden gain the presidency next week. All of which shows that there has rarely been a better time to invest in renewables.