While the state of Texas is the largest coal consumer according to the U.S. Energy Information Administration (EIA), it also has significant wind and solar energy growth.
According to a Fortune article, Texas “leads the nation in wind power generation, which accounts for around 20% of Texas´ energy usage, while the state´s solar power industry is also growing fast.” If Texas can pave the way for more growth in other states, look for investment opportunities in these niche energy sectors.
One potential ETF play is the Global X Solar ETF (RAYS). The fund seeks to invest in companies positioned to benefit from the advancement of the global solar technology industry, which includes companies involved in solar power production, the integration of solar into energy systems, and the development/manufacturing of solar-powered generators, engines, batteries, and other technologies related to the utilization of solar as an energy source.
The prices of solar power materials have gone down as of late despite the rising tide of inflation. That said, more solar projects could be underway in the coming years, especially now that the U.S. infrastructure plan that passed last year is allocating more funds towards renewable energy sources like solar.
RAYS offers investors:
- High growth potential: Forecasts suggest that the global market for solar energy could reach $200 billion by 2026, quadruple the market size in 2019.
- Advancing clean technologies: Solar is the most abundant energy resource on earth. Increased adoption of solar technologies could potentially help address global power insecurity and minimize the adverse environmental impacts of fossil fuel consumption.
- Conscious approach: RAYS incorporates environmental, social, and governance (ESG) screens and follows ESG proxy voting guidelines to affect positive change alongside financial returns.
A Growth Play for Wind Energy
With wind energy projects expected to grow domestically, another potential play is the Global X Wind Energy ETF (WNDY). The fund seeks to provide investment results that correspond generally to the Solactive Wind Energy Index.
As such, WNDY seeks to invest in companies positioned to benefit from the advancement of the global wind energy industry, which includes companies involved in wind energy technology production, the integration of wind into energy systems, and the development and manufacturing of turbines that harness energy from wind and convert it into electrical power. The fund comes with a 0.50% expense ratio, which can be offset with its 30-day SEC yield of 1.01% (as of February 2).
Features of WNDY include:
- High growth potential: Forecasts suggest that the global market for wind energy could reach $127 billion by 2027, double the market size in 2019.
- Advancing clean technologies: Wind-powered turbines produce zero direct emissions, meaning that broader adoption could result in reduced greenhouse gas emissions and improved air quality.
- Conscious approach: WNDY incorporates environmental, social, and governance (ESG) screens and follows ESG proxy voting guidelines to affect positive change alongside financial returns.
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