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Is Renewable Energy a Good Investment? Everything You Need to Know!

Ruby Layram 5th Jun 2025 No Comments

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Renewable energy is rapidly becoming a focal point for investors worldwide. With global energy investment projected to reach a record $3.3 trillion in 2025, driven primarily by a surge in clean energy spending, it’s clear that the sector is gaining momentum.

But, is renewable energy actually a good investment?

In this guide, we will give you the rundown on everything that you need to know to make a confident investing decision in 2025.

An Overview of The Renewable Energy Space

Before we dive into whether or not it is a good investment, let’s do a quick refresher of the renewable energy sector.

The renewable energy sector covers all the ways we generate power from naturally replenishing sources such as solar, wind, hydro, geothermal, and biomass.

Unlike fossil fuels, which are finite and polluting, renewables offer a cleaner, more sustainable way to meet the world’s growing energy needs.

Over the past decade, this sector has grown at a pretty fast pace! Solar panels are popping up on rooftops across the UK, wind turbines are a familiar sight in rural areas and offshore, and governments around the world are committing billions to support clean energy transitions.

In fact, renewable energy made up nearly 30% of global electricity generation in recent years, and that share is expected to rise.

It’s not just about saving the planet (although that’s a pretty good reason!). It’s also about economics. Renewables are becoming cheaper and more efficient thanks to innovation and economies of scale. That means more countries, businesses, and homeowners are making the switch.

Is Renewable Energy a Good Investment in 2025?

At first, investing in renewable energy might seem like a no-brainer! However, there is more to the sector than meets the eye!

Here is an overview of the pros and cons of investing in renewable energy to help you make a decision.

Why renewable energy could be a great investment!

1. Strong global investment trends

The International Energy Agency (IEA) reports that clean technologies, including renewables, nuclear, and energy storage, are projected to attract $2.2 trillion in investment, twice the amount directed at fossil fuels.

It’s clear that people are turning towards sustainable energy sources!

2. Job creation and economic growth

The renewable energy sector is a significant job creator.

According to the International Renewable Energy Agency (IRENA), renewable energy jobs globally reached 12.7 million in 2021, with the solar sector accounting for more than 4 million jobs.

The U.S. Bureau of Labor Statistics predicts that jobs for solar photovoltaic installers will grow by 52% from 2020 to 2030.

3. Environmental benefits

Renewable energy sources like solar and wind significantly reduce greenhouse gas emissions. Generating electricity from solar energy produces no direct emissions, while wind energy also emits virtually no greenhouse gases during operation.

4. Technological advancements

Advancements in energy storage, such as lithium-ion batteries and emerging technologies like molten salt storage, are making it easier to store renewable energy during peak times, addressing the intermittency issue.

These technological advancements make renewable energy appealing on the global stage.

What about the downsides?

As we’ve already mentioned, there’s more to the renewable energy sector than meets the eye. And, it might not be the best investment for every investor!

1. Intermittency issues

Renewable energy sources like solar and wind are intermittent, meaning they depend on natural patterns and may not produce energy consistently.

This can be a drawback, especially if backup power sources or storage solutions aren’t in place.

We still haven’t come up with a solution for this issue, and until we do, the sector may struggle with mass adoption. If you’re a short-term investor, this could be a drawback!

2. High initial costs

The upfront costs of installing renewable energy systems, such as solar panels or wind turbines, can be higher than fossil fuel-based systems.

This initial investment can be a barrier for individuals, businesses, and governments looking to transition to green energy.

3. Geographic limitations

Not all renewable energy sources are suitable for every location. For instance, wind energy is more effective in coastal or open areas, while solar energy works best in regions with consistent sunlight.

Editor’s takeaway:

The renewable energy sector is still relatively new and growing! Investing in up-and-coming tech is more suitable for long-term investors who have enough time to ride out the learning phase and benefit from future growth.

However, short-term investors may struggle to reap the rewards of investing in renewable energy as the sector still needs time to overcome current challenges.

How to Invest in Renewable Energy Through ETFs

Exchange-traded funds (ETFs) offer a convenient way to invest in the renewable energy sector without having to pick out individual stocks.

Some of the top renewable energy ETFs to consider in 2025 are:

To invest via ETFs, you will need to sign up for an ETF platform such as InvestEngine or Interactive Investor. Here, you will be able to browse available ETFs and make a purchase with your debit card or bank details.

Renewable energy ETFs provide a hassle-free way to build a diverse renewable energy portfolio, without needing to spend hours researching different stocks!

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Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.