As the market shakes off the mistakes of several disappointing tech IPOs in 2019, we look to 2020 and ask if renewable energy will be the economy’s driving sector?
Jan. 10, 2020
It seems that the renewable energy sector has never been in such a strong position as it is now at the start of 2020. Could a renewable energy company be one of the biggest winners of the new decade?
On Thursday, it was reported that the British firm Calisen Group — which provides smart readers to households — plans to list on the London Stock Exchange to get a feel for investor appetite in the sector. This comes after a tough year for flotations which saw British IPOs fall to their lowest level in a decade.
Likewise, there were disappointing performances from the likes of Uber (NYSE: UBER) and Slack (NYSE: WORK) on the U.S. markets; could renewable energy make up for the damage caused by 2019s unicorns?
Who is involved in renewable energy?
One of the biggest growth stories in renewable energy is solar power. Whether it is generated via rooftop solar panels or a utility-scale power plant, it is now cost-competitive with its fossil-fuel counterparts.
Some of the top solar energy stocks at the moment include the likes of Vivint Solar (NYSE: VSLR), SolarEdge Technologies (NASDAQ: SEDG), and SunPower (NASDAQ: SPWR). The global renewable energy market was valued at $928 billion in 2017 and is expected to reach $1,512.3 billion by 2025, which would imply a compound annual growth rate of 6.1% from 2018 to 2025.
With that in mind, it’s easy to see why some of the biggest names in business are jumping on the trend, including Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B). Berkshire CEO and founder Warren Buffett’s energy segment, Berkshire Hathaway Energy, had invested approximately $6.5 billion in renewable projects by the end of 2018.
Other sectors ‘driven’ by renewable energy
An entirely new branch of the auto sector has emerged on the back of renewable energy which has seen the creation of now world-famous brands such as Tesla (NASDAQ: TSLA) and competitors like Nio Inc (NYSE: NIO).
Tesla’s stock price just hit an all-time high this week off the back of a record-breaking 2019 where it saw huge success in China, while the global electric vehicle market is expected to reach nearly $570 billion by 2026, according to analysts.
Even companies you would not think of have been changed by renewable energy and are trying to save the world. The most valuable brand in the world. Apple (NASDAQ: AAPL), has seen all of its data centers powered exclusively by renewable energy since 2014, reducing its greenhouse gas emissions by more than 50%.
In a world that is growing increasingly eco-aware, renewable energy is looking set to experience a big year of growth in 2020.
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