Following a multi-year stretch of disappointment, clean energy equities and the related ETFs ranked among 2025’s most resurgent asset classes. Just look at the ALPS Clean Energy ETF (ACES), which is higher by 42% for the 12 months ending Feb. 4. With ACES and friends on the mend, some investors may be wondering if they’ve missed the clean energy rebound party.
Time will provide the final answer to that query, but investors considering ETFs such as ACES today can find some assurance in the clean energy industry’s appealing fundamental outlook – one fortified by increasing electrification demands by way of artificial intelligence (AI).
“After 20 years where demand for power has been offset by power efficiency, we’re now seeing significant growth. And that’s coming from two things,” noted Ulrik Fugmann of BNP Paribas. “One, broader electrification. So simply, the world is getting increasingly electrified, with EVs and buildings and homes. Second. the build-out of a broader digital infrastructure. The scale is enormous in terms of the investments that are being made and the energy requirements that are involved.”
ACES Advantages
One of the benefits offered by ACES’ rebound is that while it’s a passively managed ETF, it offers a good amount of industry-level breadth, levering the ETF to a variety of clean energy adoption trends while potentially positioning to benefit from themes such as AI electrification and clean energy infrastructure demands.
Those are factors for investors to ponder because they speak to the long-term viability of this investment concept, underscoring the point that market participants that exercise patience and proper risk management could benefit from ACES’ rebound over longer holding periods.
“When we look at clean energy, that is a theme that really started rallying and becoming secular because of economics and adoption, meaning solar and wind are now significantly cheaper than using coal and gas,” added Fugmann.
As for ACES’ intersections with AI, those are relevant as well. The math confirms as much. Put simply, data center demand is booming, but data centers powered by fossil fuels or nuclear energy take far longer to construct than equivalent venues powered by clean energy sources.
“A gas facility will take six to eight years to build. Nuclear will take 12 years to build, whereas solar, wind and energy storage takes about 18 months and hence it’s no surprise that close to 100% of additional power built in the US last year came from solar, wind and energy storage,” concluded Fugmann.
For more news, information, and analysis, visit the ETF Building Blocks Content Hub.
