In today’s tumultuous geopolitical climate, oil and gas prices are soaring worldwide. As a result, you may be considering renewable energy investment alternatives to oil and gas in your retirement portfolio. Whether your goal is to support a greener environment or to capitalize on the potential returns renewable energy presents—you are not alone. Renewable energy has been on the table for quite some time as the world explores ways to offset climate change due, in part, to emissions caused by coal, gas, and oil.
Yahoo published an article last year that stated: It’s estimated that the U.S. renewable energy industry will grow at a 6.1% compound annual growth rate between now and 2025. The growth rate in Europe is projected to be even higher at 6.7%. The projected growth rates make renewable energy investment attractive.
So, if you’re seeking long-term growth, renewable energy assets are worth consideration.
Renewable Energy Investment Alternatives in an IRA
There are quite a few socially responsible investments in the renewable energy sector that attract both savvy and passionate investors who want to increase the ROI in their portfolios. If you have a self-directed IRA, you can easily invest in greener and more eco-friendly assets. Even if you continue to invest in gas and oil, adding additional energy options to your portfolio isn’t a bad move. After all, the world will always need some form of energy to make it go ‘round. And as people become more conscious of their carbon footprints, industries around the world seek socially responsible alternatives for energy resources.
Most people think of renewable energy investments in terms of solar panels and windmills, but other options include waste to energy and hydroelectricity. All four of these alternatives can add diversity to your IRA. In turn, your investment can assist in making the world a healthier place to live.
Investors pursuing renewable energy investments have a variety of options to meet their goals.
You can invest in:
- Private equity
- Exchange-traded funds (ETFs)
- Investing in land that is used to create solar or wind farms.
However, it’s not as straightforward as investing in energy stocks or a specific eco-friendly private equity firm. There are many different avenues that support clean energy. A few examples include:
- Investments with private companies that offer stakes in commodities such as wind and solar technology or tree farms.
- Stock and bond assets that support the cultivation of natural resources and clean energy technologies.
- Eco-friendly investments in businesses that build energy efficient cars, homes, and other structures.
- Private stock options in companies that work to save energy, protect the environment, and promote a green, healthy planet.
Why Is Renewable Energy So Important?
The use of renewable energy is important to preserve the environment. But it also plays a critical role for countries like the United States to become more self-reliant. Gas, oil, and coal must be transported across national and global lines. However, this transportation depends on geopolitical harmony, which is not always in place between countries across the world as evidenced in the current war between Russia and Ukraine.
Natural energy resources that come from wind, water, and the sun does not require transcontinental transport. This fact, combined with the idea that renewable energy is a cleaner, greener alternative to oil and gas—makes it easy to understand why the move towards these sustainable resources is compelling.
Should You Add Renewable Energy Assets to Your Portfolio Now?
This is a question only you can answer. We are just letting you know the options and opportunities are available for your self-directed IRA. But sustainability, self-reliance, and the possibility of a cleaner, greener future present solid cases-in-point for the renewable energy investment class to continue growing.