In a world that is constantly struggling to meet its increasing energy requirements, renewable energy is seen as the best possible way in which the energy demand can be met without resulting in negative impact on the environment. Produced from natural resources like wind, tidal power, biomass, solar and hydro power – renewable energy generates power without contributing to climate change or causing a greenhouse effect. It is due to these qualities that governments across the globe are creating programs and policies that support investment in renewable energy. According to analysts at Technavio, the global renewable energy investment market will grow at a CAGR of more than 6% by the year 2020.
Factors behind increased investment in renewable energy
Large corporations are the biggest consumers of energy, which is why the onus often falls on them to switch to cleaner and more environmentally-friendly means of energy generation. The past few years have witnessed a growing trend among companies to increase their investments in renewable energy sources. More than half of Fortune 100 companies have committed themselves to bringing down their greenhouse gas (GHG) emissions.
Here are some of the factors behind increased investments in renewable sources of energy:
Reduced long term operating costs
Though the initial investments required for renewable energy infrastructure are huge, when seen from a long-term perspective, regular operating costs are less than the costs associated with traditional energy resources. As the prices of fossil fuels and natural gases are quite volatile and are sure to spike in the coming years, it makes sense to invest in renewable means of energy production given that the power generation costs are minimal.
Rebates from governments
As previously mentioned, governments across the globe are encouraging the adoption of clean energy in a bid to bring down GHG levels. They are accomplishing this by offering major rebates for corporations that choose to implement renewable energy sources, which in turn reduces operational costs and helps companies to put their money and resources into research and development activities.
Boosts job generation
Renewable energy sources are far more labor-intensive as compared with non-renewable energy sources. Renewable energy requires a lot more man power, which ultimately leads to job generation. This is particularly important in developing countries, where unemployment is a major social and economic issue. Along with direct job generation, switching to renewable energy sources has a positive ‘ripple’ effect on other industries as well. For example: industries in the renewable energy supply chain will benefit, as will the local businesses on which these supply chains are indirectly dependent, which will in turn benefit households and other indirectly related businesses.
Most of all, switching to renewable energy boosts the goodwill and overall image of companies, which helps them win the loyalty of their customers. Therefore, investing in renewable energy is beneficial in more ways than just the obvious ones. Now that the big companies have set a precedent, we can expect to see many more companies adopting and investing in renewable energy sources in the next five years.
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