Tuesday 08 October 2024
Green & Renewable Energy Stocks: All You Need to Know
With pollution on the rise, it's more important than ever to focus on environmental awareness, which is driving a boom in green and renewable energy companies.
This shift attracts eco-conscious consumers and affects the stock market, as many of these companies are publicly traded.
So, what exactly are green and renewable energy companies, and how can you get involved in trading them? Let's dive into these questions:
What Is Green Trading & Investing?
Green trading, often called socially responsible investing or eco-trading, refers to environmentally friendly investments that have consideration for the social and environmental impacts. This can include trading and investing in renewable energy companies, green companies, and sustainable agriculture.
However, it is important to note that what may seem like green trading to one person might not even make the cut for another. This makes it a blurry field that is also subject to scrutiny and environmental criticism.
Why Trade & Invest in Green Stocks?
Trading and investing in green stocks can support businesses that aim to reduce environmental harm. This may appeal to those interested in the environment and potentially benefiting from the companies involved.
Green Energy, Renewable Energy, Clean Energy: What’s the Difference?
While the terms green energy, renewable energy, and clean energy can often get intertwined, each refers to a different type of energy.
Green Energy: This comes from environmentally friendly sources and does not pollute the planet.
Renewable Energy: This type is generated from resources that naturally replenish, like wind and solar power, though the production process may still have some negative environmental impacts.
Clean Energy: This term refers to energy that produces little to no greenhouse gas emissions. It includes both renewable sources and some low-impact, non-renewable options.
Interestingly, most green energy sources are renewable, but not all renewable energy is considered green.
Types of Green Energy
Green energy can be segmented into solar, wind, biofuel, energy economy, and hydroelectric.
Solar Energy: Harnessed from the sun.
Wind Energy: Captured through wind turbines.
Biofuel: Derived from organic materials.
Hydroelectric Energy: Produced from moving water.
Types of Renewable Energy
Renewable energy comes from natural sources that quickly replenish, offering cleaner alternatives to fossil fuels:
Solar Energy: From sunlight.
Wind Energy: From wind turbines.
Geothermal Energy: From Earth's heat.
Hydropower: From flowing water.
Ocean Energy: From seawater.
Bioenergy: From organic materials.
What Are Green Energy and Renewable Energy Companies?
These companies focus on producing and promoting green and renewable energy through their products and services.
Top Green and Renewable Energy Share CFDs
Some of the most popular green, renewable and clean energy companies are available as Share CFDs on the Plus500 Platform, such as:
Oil Companies Investing in Green Energy
While oil companies may not seem very reminiscent of environmental friendliness, some leading oil companies are actually investing in renewable energy.
These include ExxonMobil (XOM), Chevron (CVX), BP (BP-L), and Enbridge (ENB). (Source: Investopedia)
Factors Affecting Green Stocks Prices
Climate change policies
Renewable energy investments
Corporate earnings
Market sentiment
Countries Most Involved in Renewable Energy
As of 2024, some countries known to be involved in renewable energy include Paraguay, Nepal, Iceland, Bhutan, Albania, Ethiopia, and the Democratic Republic of Congo (DRC).
How to Trade Green Energy Share CFDs
If you’re interested in investing in green energy without actually buying shares, you might consider trading share Contracts for Difference (CFDs). CFDs let you speculate on price movements with leverage, which amplifies both gains and losses. In addition, CFDs allow you to trade both rising and falling share prices. As a result, trading CFDs in green or renewable energy stocks has no positive impact on the environment.
FAQs:
What Is Green Energy?
Energy that can be produced using a method and from a source that causes no harm to the natural environment.
What Is Renewable Energy?
Renewable energy is energy derived from natural sources, such as solar, wind and geothermal, that are replenished at a higher rate than they are consumed.
What Are Some Popular Green Energy and Renewable Energy Companies?
Some of the most popular green and renewable energy companies include SolarEdge, Tesla, Plug Power, NextEra Energy, and Vestas.
