Some of this year’s best-performing industry ETFs provide exposure to alternative and renewable energy companies. For example, the ALPS Clean Energy ETF (Cboe: ACES) is higher by nearly 41% year-to-date.
The ALPS Clean Energy ETF tries to reflect the performance of the CIBC Atlas Clean Energy Index, which is comprised of U.S. and Canadian companies involved in the clean energy sector including renewables and clean technology.
ACES and rival renewable energy ETFs could be poised for more upside in 2020 as demand for and adoption of clean energy is expected to increase.
“Solar and wind power are among the renewable energies forecast to spike in 2020, accounting for two-thirds of the new power generation capacity comings on line, a new report shows,” reports Cecilia Jasmine for Mining.com. “Experts from The Economist Intelligence Unit (The EIU), forecast energy consumption from non-hydro renewables to rise by 14% next year, while oil-generated energy would grow by just 1%, even with prices remaining range-bound despite political tensions in the Middle East.”
ACES Access Granted
ACES’ components provide the products and services that enable the evolution of a more sustainable energy sector. The green energy companies are engaged in renewable energy sources, including solar power, wind power, hydroelectricity, geothermal energy, biomass, biofuels, and tidal/wave energy; clean technologies, including electric vehicles, energy storage, lithium, fuel cell, LED, smart grid, and energy efficiency technologies; and other emerging clean energy activities and technologies.
“The study highlights that the Paris Climate Change Agreement will use 2020 as the base year against which the 2030 targets will be measured,” according to Mining.com. “However, the experts predict that those targets will likely to be missed, particularly if the United States goes ahead with its plan to exit the agreement.”
Data confirm that domestic utilities are generating less power via coal and more with alternative energy sources, such as wind and solar, potentially representing a long-term boon for ACES and its components.
In terms of adoption by big American companies, wind and solar are two of the preferred avenues for clean energy use and that’s relevant to ACES because those themes combine for a significant percentage of the fund’s roster.
For more information on the renewables space, visit our renewable energy category.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.