The global economy is rapidly shifting to new energy sources. Due to concerns about climate change, the world is moving away from carbon-based fossil fuels to cleaner alternative energy sources. The production and consumption of renewable energy is expanding and is steadily increasing. Decarbonizing the global economy will require an estimated investment of over $21 trillion through 2050. Renewable energy will play a crucial role in this energy transition.
Source : Statista
Renewable energy sources, such as wind, solar and hydroelectric power, provide about a quarter of the electricity needed. Despite rapid growth and in light of growing concerns about climate change, the pace has picked up in recent years to help decarbonize the economy. Climate change is forcing companies and other institutions to focus on how they can contribute to decarbonization. Many businesses are signing power purchase agreements with utilities and other power producers to specifically purchase electricity generated from renewable sources.
Others invest directly in renewable energy development projects. With democratization and adaptation to the means of production, renewable energies are becoming almost more economical than ecological with a decrease in the costs of solar panels, wind turbines and batteries for energy storage. In addition, governments are calling for an acceleration of the global decarbonization process with the adoption of legislation and increased investment in the sector. To illustrate this point, the US Senate passed a $1.2 billion infrastructure package in August 2021 to increase investment in clean energy.
Investors should therefore take a look at the analysis of the 5 companies in the renewable energy sector presented below:
Clearway Energy is one of the largest owners of renewable energy in the U.S. and is an energy infrastructure investor and owner of long-term contracted assets across North America. The company’s operations are separated into conventional power generation and renewable activities. It generates steady cash flow for the company from natural gas-fired power plants. Clearway Energy has a strong financial profile and expects to grow its dividend by 5 to 8 percent annually in the coming years.
Market capitalization: Almost doubled in the space of 3 years, from 2,232 million in 2019 to nearly 4,205 million in 2022.
Free Cash-Flow: Tripled within 3 years from 249 million in 2019 to 735 million in 2022.
ROE: Positive with full growth and tripled between 2021 and 2022
Net debt: Stable at around six billion since 2019
SolarEdge Technologies develops and manufactures an inverter system optimized for a solar photovoltaic (PV) system. This component maximizes the power produced by the solar panels, helping to reduce the cost of the energy generated by the system. SolarEdge has had a 1354% rise since its IPO in March 2015. This meteoric rise has allowed it to become the market leader in solar inverters in 2020, up from 10th in 2014. With solar power expected to account for 38% of the world’s supply by 2050, SolarEdge should benefit from this and thus increase its revenue.
Market capitalization: Almost quadrupled in 3 years, from 4622 million in 2019 to 16,972 million in 2022.
Free Cash-Flow : Slightly down but stabilizing at around 100 million.
ROE : Stabilization at around 22%.
Net Cash Flow: Down in 2021 to 76.3 million but forecast to rise to 1,094 million in 2022.
Canadian Solar Inc. is a solar energy and battery company. The company is a provider of solar energy products, …….