U.S. Clean Energy Investments Spur Rise in Corporate Investments

It’s not just the U.S. government that’s willing to open its wallet to fund clean energy projects. Corporations are also ramping up their investments in clean energy as well.

With the help of government subsidies, this is only fueling more corporate investment dollars into clean energy projects. From solar power to electric vehicles (EVs), corporations are quick to take advantage of benefits, such as tax breaks, especially amid a high inflation environment that could eat into corporate profits.

“A boom in clean-energy manufacturing is fast getting under way across the U.S. Factories are suddenly cranking out everything from solar and wind equipment to batteries and low-carbon fuel,” a Barron’s article said. “Corporate investment dollars, spurred by new tax breaks, are transforming the U.S. from an also-ran in alternative energy to a real player, lifting the fortunes of a number of companies.”

“Since President Joe Biden earmarked $370 billion for clean energy in the Inflation Reduction Act in August, there have been 76 announcements of clean-energy projects, notes Credit Suisse Of those, 40 specified dollar amounts, totaling $77 billion,” the article added.

A Broad Clean Energy Play

Given the exponential growth in clean energy, consider adding the ALPS Clean Energy ETF (ACES) to a portfolio. The fund seeks investment results that correspond (before fees and expenses) generally to the performance of its underlying index, the CIBC Atlas Clean Energy Index (NACEX).

Overall, ACES delivers exposure to a diverse set of U.S. and Canadian companies involved in the clean energy sector including renewables and clean technology. The clean energy sector is comprised of companies that provide the products and services that enable the evolution of a more sustainable energy sector.

As of February 24, the big three allocations in terms of sector-specific exposure include electric vehicles, solar power, and wind power. This allows an investor to get diversified to the clean energy sector without over-concentrating in a specific sub-sector or specific stocks.

For more news, information, and analysis, visit the ETF Building Blocks Channel.