Investing in Green Energy is Red Hot (image courtesy of Flickr Creative Commons)

A report released this spring by the United Nations Environment Programme and the Sustainable Energy Finance Initiative, entitled Global Trends in Sustainable Energy Investment 2009, showed $155 billion was pumped into clean energy companies in 2008.  Investing in green energy is red hot!

The 2008 green investment figures represent a four-fold increase since 2004.  The report includes the following impressive figures:

“Investment in new energy generation projects (wind, solar, biofuels etc.) grew by 13% during 2008, to $117 billion, and new private investment in companies developing and scaling-up new technologies, including energy efficiency, increased by 37% from 2007 to $13.5 billion.”

Still, the flow of dollars has slowed in 2009, given the current economic situation worldwide.  But we should expect continued investment in green energy in the years to come, considering government stimulus plans – not only in the U.S., but also China, Japan and the Republic of Korea.  A number of countries have “earmarked multi-billion investments in clean energy, including smart grids, under the banner of a global ‘green new deal’,” says the report.

Not all of the news in the Global Trends in Sustainable Energy report is positive.  It indicates that green investment started falling off in late 2008 (although clean energy investments still exceeded those of one year prior).  Yet, 2008 is the first year in which new power generation investment in renewables exceeded that of fossil-fuel technology advancement.

Have we finally turned the corner?  I’ll be cautiously optimistic.

Another driving force for investing in green energy is the fact that:

“President Obama has clearly stated his support for a federal cap-and-trade scheme and a strengthened global scheme may result from the negotiations in Copenhagen in December. A system of interlinked policy-led financial markets, similar to currency markets, is emerging, where every major economy puts a price on greenhouse gas emissions, thereby providing another enabler for sustainable
energy.”

Cap and trade aside, we must consider the fact that certain driving forces that ignited green investment in the past remain in force, and will only gain strength in the coming years: from climate change to fossil fuel depletion, improving technologies and the desire for energy independence.  The demand for green jobs also remains high, and many are betting that they will help pull us out of the current recession.

In short, all signs point to “go” for investing in green energy.

What’s stopping you from considering this red hot market?

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