Melting polar ice caps, increased carbon emissions from burning fossil fuels, and other climate challenges have become more concerning in today’s world. The energy demand is higher than ever, but our conventional methods of generating electricity are rapidly depleting.
To combat these effects, green energy comes into play, helping us fight climatic challenges and protect nature. Hence, there has been a groundbreaking shift towards energy. In this article, let’s delve into green energy investment and explore how it can shape a sustainable future for us all.
What Are Green Energy Investments?
Investing in companies or projects that produce energy using renewable sources is what we call green energy investments. Solar, hydropower, biomass, wind, geothermal, and ocean energy are the available renewable sources.
Thanks to government policies, technology enhancements, and foreign investments, which have a remarkable impact on the growth of the green energy sector in India, it provides a peculiar way of making money that has a positive impact on the environment.
Why Green Energy Investments?
Forget fossil fuels; clean energy is the new hotshot!
Based on the Power Ministry’s estimates, renewable energy investments in India are going to witness an 83% rise in investments in renewable energy projects, reaching nearly $16.5 billion in 2024.
The International Renewable Energy Agency has mentioned that clean energy is attracting more investment than ever before.
In fact, the International Energy Agency has reported exponential growth, with renewable energy investments jumping from $331 billion in 2015 to $659 billion in 2023. All this tremendous growth happened over just nine years.
Let’s look at the table below, which gives us a picture of green energy investments in India over the past nine years.
| Year | Renewable power Investments (Bn USD) |
| 2015 | 331 |
| 2016 | 340 |
| 2017 | 351 |
| 2018 | 377 |
| 2019 | 451 |
| 2020 | 494 |
| 2021 | 517 |
| 2022 | 596 |
| 2023 | 659 |
This ambitious goal helps to switch power generation from fossil fuels to renewable sources and aims to bring it below 50% of the country’s power generation. Moreover, India has set a long-term vision to achieve net–zero emissions by 2070 for a sustainable planet.
INDIA’S RENEWABLE ENERGY PRODUCTION CAPACITY
Incredible schemes or policies like Pradhan Mantri Urja Suraksha Evam Utthaan Mahabhiyaan (PM-KUSSUM), the development of solar parks and ultra-mega solar power projects, etc., by the Indian government have a major impact on the growth of green energy in India.
Have a look at the table to learn about India’s renewable energy capacity:
| Types of Renewable source | World rank | Installed Capacity of Renewables |
| Solar | 3 | 84.27 GW |
| Wind | 4 | 46.42 GW |
| Small hydropower | 5 | 5 GW |
| Bio-energy | 4 | 46.92 GW |
Concurrently, as the Indian economy is undergoing a wide range of changes, here’s a tabular presentation of some values and comparisons assessed as per the latest data:
| Metric | Value Change | Change/Comparison |
| Non-fossil Fuel Energy Target | 500 GW by 2030 | World’s largest expansion plan. |
| Installed Non-Fossil Fuel Capacity | 201.75 GW (as of May 2024) | Increased by 396% in 8.5 years |
| Percentage of Total Energy Capacity | 45.3% (as of May 2024) | – |
| Renewable Energy Growth (2022) | 9.83% year-on-year | Highest growth rate globally |
| Installed Solar Capacity | 84.27 GW (as of May 2024) | Increased by 30 times in 9 years |
| Solar Energy Potential | 748 GWp | Estimated by National Institute of Solar Energy |
| Overall Renewable Energy Increase | 128% since 2014 | – |
| Foreign Direct Investment (FDI) Allowance | Up to 100% | For renewable projects under automatic route |
GREEN ENERGY GENERATION CAPACITIES BY DIFFERENT COUNTRIES
The USA has been providing a phenomenal tax credit to clean energy manufacturers and domestic equipment manufacturers, including EVs & batteries. China’s “New Three” policy has helped to record strong growth in solar, storage, and EVs.
All these initiatives by the countries helped them to be the top performers in the world.
Let’s have a quick look at the production capacities of different countries
| Rank | Country | Renewable energy generation capacity (Includes all renewable sources) |
| 1 | China | 1,504,641.3 MW |
| 2 | USA | 404,292.1 MW |
| 3 | Brazil | 194,084.7 MW |
| 4 | India | 180,714.6 MW |
| 5 | Germany | 172,362.0 MW |
| 6 | Japan | 149,144.5 MW |
| 7 | Canada | 108937.7 MW |
GREEN ENERGY STOCKS IN INDIA
KP Energy Ltd.
This company is committed to electricity generation through wind turbines, and it has been a consistent performer in the green energy sector over the past five years with a profitable return.
BF Utilities Limited
BF Utilities excels in producing energy through windmills. BF Utilities Ltd. has shown significant growth over the years and continues to carry forward the trust of investors.
KPI Green Energy
It is the largest solar plant in Gujarat. Over the last five years, KPI Green Energy has shown dynamic growth, attracting investors from all corners of the world of finance.
Adani Green Energy Limited (AGEL)
AGEL operates both in wind and solar projects. Central and state government entities and government-backed corporations are the customers of Adani Green Energy Limited.
Others
Apart from these stocks, there are many other green energy stocks in India like Tata Power, NTPC, NHPC, Suzlon Energy, etc.
WHAT ARE ESG MUTUAL FUNDS?
Now, let’s have a quick sneak peek into ESG Mutual funds. ESG stands for Environmental, Social, and Governance. ESGs are one of the rapidly evolving sectors in the world of investments, as they provide ethical governance and social responsibilities while giving financial returns.
ESG mutual funds work the same as traditional mutual funds in pooling money, where the fund manager invests your funds into stocks or bonds, but the key difference here is that funds that are pooled will only be invested in companies that follow sustainable means of production without any unethical practices that harm or damage the planet.
ESGs not only provide returns but also help to reduce carbon footprints and pollution, which would otherwise be a nightmare for future generations.
Quant ESG Equity Fund, ICICI Prudential ESG Exclusionary Strategy Fund, and SBI ESG Exclusionary Strategy Fund are a few of the ESG mutual funds in India.
GREEN WASHING
As green energy investments grow, so does the risk of greenwashing, where businesses present themselves as environmentally conscious and sustainable while still using unsustainable means in their production process.
Greenwashing poses a significant threat to the renewable energy sector because it misleads investors and questions the credibility of genuine green energy companies that aspire to achieve real environmental goals.
How to Identify Greenwashing?
It may be a daunting task to identify genuine and fake companies, but there are a few primary indicators that one needs to consider to avoid being a victim of greenwashing.
The key signs include the non-disclosure of information by companies about how exactly they maintain sustainable practices, the usage of unclear or overblown phrases like sustainable, renewable, and eco-conscious without proper evidence, and the presentation of false certificates, etc.
Thus, to tackle greenwashing, it is required that government bodies implement strict rules and regulations about how companies fully disclose their reports, conduct frequent assessments to analyze the company’s integrity towards green energy policies, etc.
Despite all the efforts by government bodies, investors must remain cautious about their investments by doing thorough research on companies before making any investments.
CONCLUSION
In a nutshell, the gaining popularity of green energy investments represents a major shift towards a sustainable future. However, this inflating demand has also raised the concern of greenwashing, whereby imposing robust regulations and conducting frequent assessments by authorities will help to enhance the credibility of truly green energy companies.
Even after all the measures taken by government bodies, investors also need to be extra careful about picking the right company to invest in. We can say that investing in green energy is not just a financial decision but also a conscious choice for a sustainable future.
FAQs
What is green energy investment?
It refers to putting your money as an investment into the companies, projects, and technologies that strive to generate energy using renewable sources, say solar, wind, ocean energy, hydropower, biomass, and geothermal.
Is green energy worth the investment?
Yes! The boom in the sector, improved technologies, and government back-up says that it is worth investing in green energy as it fetches you potential returns while contributing to a a sustainable future. However, make sure to do thorough research about the company and industry before investing.
How to invest in green energy?
There are several ways to add green energy to your portfolio, like investing in ESG mutual funds, green energy stocks, green bonds etc.
What is an example of green investment?
Let’s say you invest in a company that produces energy using wind. This company is like a seed, with the potential to grow and provide clean energy to the world. Your investment helps the company to flourish and make a greener future. As the company shines, so does your investment.
