How To Invest In Green Energy – Investing in Green Energy For Beginners 2021

Fact Checked by Gary McFarlane

Green energy is simply electricity and renewable energy. All forms of renewable energy include energy from solar, wind, hydro, and other sources, and it’s often cheaper than the energy you can get from fossil fuels. The EU is using all forms of renewable energy to provide 45 per cent of its energy by 2022. According to one study, every European citizen would be better off with a net gain of €14,000 per year from switching to green energy. This has provided incentives for big and small companies to start developing projects that would improve the green energy sector in terms of efficiency as well as profitability. Investing in this sector at the right place and right time can turn out to be extremely profitable for you.

Throughout this guide, we’ll give you the rundown on some pros and cons of investing in green energy and give you a detailed guide on how to get started.

How to invest in Green Energy – Step by Step Guide 2021

For anyone who is struggling to invest in Green Energy stocks, we’ve come up with this handy guide to help you get started in under 5 minutes.

  • Step 1: Open an eToro account – To invest in green energy you need to register with a broker. We recommend eToro as one of the best brokers for investing in green energy. You can simply type “eToro.com” into your browser, press the “Join Now” button and continue by filling in the required details.
  • Step 2: Verify your Identity – This step is easy, the only thing you’ll have to do is provide a photo ID (passport, driving licence) and proof of address (utility bill, bank statement).
  • Step 3: Fund your account – As soon as you get your account verified you’ll need to fund it. You can do that by simply clicking “Deposit Funds”, enter the amount you want to invest and press “Deposit”.
  • Step 4: Invest in Green Energy – That’s it! Now you are set to invest in Green Energy stocks. Search for the green stock you want to buy in the search bar, press “Trade”, enter however much you would like to invest and press the “Buy” button.

Where to Invest in Green Energy – Choosing a broker

Many brokers now include green energy in their services, which makes choosing one even harder. Luckily, we’ve spent a significant amount of time researching some of the best brokers when it comes to green energy and came up with a very helpful list. Below you can find our full reviews of the best platforms you can use to invest in green energy.

1- eToro- Best overall way to invest in Green Energy

eToro is one of the leading social trading platforms out there. It was developed by Yoni Assia, a former derivatives trader. He was joined by other traders in 2007 to create an investment website that would compete with traditional brokerage houses. eToro users have access to over 10,000 markets across more than 130 countries. Investors can read market updates and research their stocks, while trading can be done through up to 20 pre-set strategies on a range of asset classes, stocks, bonds, cryptocurrencies, commodities and more. The energy sector is one of the top picks on eToro due to its important role in shaping the future of the world we live in.

Security and Privacy

Security is one of the most important things you should consider when choosing a broker. If you’re a regular user of social media or online shopping, you know that data protection is a huge deal. Also, several platforms have been prone to cyber-attacks and some investors’ money disappeared in thin air. However, that won’t be an issue with eToro. As it is regulated by both FCA&CySEC, your money is as secure as it could be. This also means that your data is well protected and can’t be misused. In case of any cyberattack, eToro SSL makes sure that any sensitive data on your account is encrypted, hence, making the data useless. Another way to secure your account and data on eToro includes setting up 2FA, which acts as a last line of defence in case your account gets compromised.

Fees and Features

eToro is a commission-free platform. Yes, that’s right, you don’t pay commission for trading on eToro. However, there are non-trading fees that are relatively low including a withdrawal fee of 5$ as well as a 10$ inactivity fee. eToro offers some of the best features out there. One such feature includes Trading Mentor. Any eToro user can benefit from trading mentors as well as being able to download advanced trading strategies and free visualised charts for reference and inspiration. You can set up 2–3 minute sessions to ask the platform’s in-house ‘robo’ questions about trades, and it will answer them. eToro also offers a live chat option if you don’t feel like sending an email. Who doesn’t like a chat?

And if you are someone with advanced trading experience, you’d be happy to know that besides Green Energy you can also invest in a range of markets including cryptocurrencies, forex, and of course stocks.

eToro Fees

Fee Type Fee Amount
Commission Fee 0%
Deposit Fee $0
Withdrawal Fee 45
Inactivity Fee $10 (Monthly)

Pros

  • Regulated
  • Commission-free
  • CopyTrading
  • Simple Interface
  • SSL encryption
  • 2FA

Cons

  • Could use some MetaTrade support

67% of retail investor accounts lose money when trading CFDs with this provider.

2. Robinhood – Invest in Green Energy ETFs

Founded in 2013, Robinhood has grown to be one of the most popular trading platforms in the US, managing to compete with well-established brokers. This platform has over 10 million people trading on it and offers over 5000 stocks listed on US stock exchanges including NYSE and NASDAQ. There are many green energy stocks you can pick from this platform. Robinhood also incorporates ETF trading as well as cryptos.

Security and Privacy

If you are over 18 years, Robinhood will approve the application to trade. You must have access to a desktop computer and have access to a high-speed connection, as this is an online trading platform. You also need to have a U.S. bank account to hold the money in for the account. This is slightly different from the requirements at other brokerages. You will have an option to verify your identity and fill in a few extra details, such as your location and phone number. Although your data is relatively safe with Robinhood, they do share some of your data with third parties so that they can more effectively market and personalize their services to you.

Fees and Features

Robinhood charges a $0.00 commission on any trade you make. Yep, that’s right $0.00 for any buy and sell order you make on their platform. However, there are other fees that you have to pay for when conducting a trade. Such fees include FINRA and SEC on the sell order. These fees average less than 50 cents per trade which is relatively low when compared to other platforms. Another fee to expect is a $5 monthly fee for a Gold account.

Robinhood Fees

Fee Type Amount
Commission 0%
Withdrawal Fee $0
Deposit Fee $0
Inactivity Fee $0

Pros

  • Zero-commission
  • No inactivity and withdrawal fee
  • SEC and FINRA regulated
  • Easy to use
  • Over 5,000 US stocks and 250 non-US stocks

Cons

  • Limited to US traders
  • Accepts only US bank transfer payment method

67% of retail investor accounts lose money when trading CFDs with this provider.

3. Capital.com – Great platform to Invest in Green Energy

Capital.com is also one of the top trading platforms out there that you could use to invest in Green Energy. Although this platform is relatively new, it has been growing at really high rates. The best part about them is that they offer investing guides for new investors. This helps them gain more information and have better management of their investments.

Security and Privacy

Capital.com is one of the best platforms out there when it comes to protecting your data. As they fully comply with PCI data security standards, there’s no risk of having your data sold to the highest bidder. Also, for UK-based customers, there’s insurance coverage up to £85,000 by FDIC in case the platform is compromised.

Fees and Features

Capital.com provides some of the best features out there to its users. They provide detailed guides to investing for beginners as well as a practice account before jumping into real investing. This helps sharpen your investing skills and lowers the exposure to financial losses. They also have TradingView integration for experienced traders which allows you to access highly advanced charting tools.

Capital.com Fees

Fee Type Amount
Commission 0%
Withdrawal Fee $0
Deposit Fee $0
Inactivity Fee $0

Pros

  • Practice Account
  • FDIC insurance
  • TradingView integration
  • Great range of guides

Cons

  • Limited to investing CFDs and stocks
  • Track record far shorter than some of its competitors
  • Invest in Green Energy – Broker price comparison.
  • Use this useful table we’ve built to refer to when choosing a broker to invest in green energy.

67% of retail investor accounts lose money when trading CFDs with this provider.

What are the different ways to invest in Green Energy?

If you’re looking to invest in Green Energy then you need to carefully consider what options you have on the table. If you’re new to investing, it can be frustrating to grasp the different types of investment strategies out there. It often requires understanding financial concepts and terms which new investors are not familiar with, hence, discouraging them from investing. But we got you covered! Here are a few ways to invest in Green Energy. Go with the big-name – Companies such as Tesla. Others such as TerraForm Power (NASDAQ: TERP ) and Pattern Energy (NASDAQ: PEGI ) are for more adventurous investors but have the potential to pay off handsomely. Stay clear of penny stocks – although rare, investors should avoid buying these high-risk, high-reward opportunities.
To help ease the struggle for you further we’ve broken down the process of investing in green energy into 3 main ways you can invest explained in easy-to-understand language.

Stocks

Unlike most other investments, investing in stocks is done through either an exchange-traded fund (ETF) or stocks on a company’s trading platform. ETFs are quite popular for investing in the stock market since they are often quite low risk and allow one to spread out their risk. Stocks, on the other hand, provide a higher level of risk and are known for their volatility. This volatility is because the stock market is simply a market with buyers and sellers that offer a level of risk to the investor. Investors use this volatility to profit by buying low and selling high. A higher level of volatility is good because the higher risk means that you’ll gain more when the price rises, but you risk more when it falls.

CFDs (Contract for Difference)

One of the easiest ways to invest in green energy is by using CFDs. CFDs are for someone who is looking to make huge gains in a short time. For someone who is risk-loving, this is the perfect way to invest in green energy. With a CFD you make a bet as to whether the price of the stock will go up or down. When the price goes up after having bought the CFD, you sell it and the markup is your profit. A CFD is a financial instrument in which you buy the opposite of what you are selling. The logic is that you are taking advantage of the price differential (the spread), and hoping that it is big enough to make money. Unlike ETFs, CFDs allow for fractional ownership of energy projects which is unique in the green energy sector.

ETFs (Exchange-Traded Funds)

You must be familiar with all the different types of ETFs before investing in green energy. Exchange-Traded Funds are funds that are traded in the open market and the prices are based on the general movements of stock prices. They are usually passively managed and come with low fees. The main benefits of investing in exchange-traded funds are that they’re a low-cost way of investing in green energy and have low minimum initial investment requirements.

Invest in Green Energy

Now that we have covered the difference between the 3 most common types of investment, it’s time for us to discuss how you can make the best use of them. Choosing the right investment strategy depends on your goals and risk tolerance. If you’re someone who wants a get quick rich scheme then you should probably consider stocks of low market cap companies. However, this is riskier and can result in a significant loss.

Invest in green energy Stocks

Stocks in green energy companies are a common means of investment. They’re the oldest form of investing and have been around since medieval times. Green energy stocks can be bought and sold online using a brokerage. Before buying stocks in a green energy company you should consider factors such as environmental considerations, national restrictions and local barriers. Green energy companies usually trade at much lower stock prices than their regular counterparts. The downside is that they have higher chances of going out of business.

Invest in green energy CFD

An investment in CFD is more of a speculative bet than actual security. This type of investment can be a simple one that you can buy or trade in or take the hassle out of and make a substantial amount of cashback. Green Energy CFD can be used to hedge your risk in an investment portfolio. CFD have much more liquidity and volatility, and for someone who is experienced in trading, they can help you make tons of money in a short period.

Invest in green energy ETF

How does one go about creating an investment that is both good for the environment and a great return on investment? First and foremost you need to choose a fund that tracks a specific green energy index. Index funds are like mutual funds – you get all of the benefits of getting broad exposure to the stock market but at a fraction of the cost. You can create a custom made index that only contains the companies that are in the green energy index, or you can use a specific ETF as a benchmark. Once you’ve chosen your best fit, you need to take advantage of the amazing products that the world of ETFs has to offer.

Is Green Energy a Good investment?

As the global population increases, so does the energy demand. With climate concerns on the rise, people are seeking out alternative sources of energy— one of the main sources of which is green energy. The total global market for green energy was valued at $928 billion in 2017. A recent study by Bloomberg New Energy Finance shows that this industry is expected to grow to $5.1 trillion market cap by 2030, providing great investment opportunities. In this article, we cover two main reasons why you should consider investing in green energy.

Highly volatile fossil fuel prices

During the start of the pandemic, the world has experienced the oil demand drop significantly. This resulted in oil prices falling negative for the first time in history. Such massive decline has impacted also the stock price of many fuel companies, leading investors to seek other alternative stocks such as Tesla (NASDAQ: TSLA) that have experienced massive growth in 2020. However, U.S crude oil topped $80 a barrel recently, further increasing the volatility in oil prices. This volatility in fossil fuel prices has led many investors to seek shelter in green energy projects. Although due to the growing trend for green energy needs, many financial institutions are considering fuel companies to be financially risky long term, hence, investing less money in them. All this money is now going towards green energy which will only add fuel to the growing trend of green energy stocks.

High investment yields

Green energy is deemed more efficient than conventional sources of energy and that this technology will yield significantly higher returns. According to a study by the U.S. Department of Energy, the annual energy returned on energy invested (EROI) of a wind turbine is 2.3, whereas a solar panel is 1.5. However, since green energy is still relatively new, it is not economical for many countries to install solar panels. So investors need to be very careful with this type of investment. The market for renewable energy is expected to grow even further in the next decade. The main reason is due to rising environmental concerns. Many nations have now focused more on zero-emissions projects which are expected to enhance the green energy sector’s growth. As solar and wind production capabilities scale further, forecasters predict that this market will continue to experience an average 15% annual growth.

Investing in Green Energy – What are the risks?

Although the green energy market is outperforming that of fossil-fuel energy according to data from Bloomberg New Energy Finance, there are still financial as well as operational risks involved. There are uncertainties as to how the legal environment around the world will approach green energy projects. Some other risks such as technological obsolescence highly impact the viability of some projects. We’ve researched two of the top risks involved in green energy you should be aware of.

Economic and legal risk:

The regulatory and legal framework regarding climate change is uncertain, meaning that there are hurdles for companies to overcome if they want to succeed with these types of green energy projects. Moreover, there is risk affecting the investment in the project, for example, uncertainty in the ability to obtain credit or equity financing.

Technological obsolescence:

Technological obsolescence is one of the biggest risks involved in green energy investment as it could significantly undermine the viability of a project. The competition in the green energy sector is huge and growing, this could mean that a project you’ve invested in, in a short time could be overtaken by another more efficient one. Big companies are spending millions of dollars in R&D to make green energy projects more efficient and profitable.

How to Invest in Green Energy with eToro:

Getting started on a new investment platform can be a tall order especially with so many brokers to choose from. But don’t worry! We’ve created this guide to help you get started on our top Green Energy investment platform, eToro.

Step 1: Open an account with eToro

If you’re looking to invest in green energy, then you will want to register yourself with a trusted broker. For this, we recommend eToro because they offer users a phenomenal blend of security, advanced trading features, and an easy-to-understand fee structure. Just type “eToro.com” into your browser, press “Join Now” and fill in the necessary details.

how to join etoro

Step 2: Verify your account

Before you start trading you’ll need to verify your account, this is because eToro is a regulated platform, meaning they comply with strict data protection and money laundering rules. It’s not hard to verify your account, all you’ll need to do is provide a photo ID (passport, driving licence) and proof of address (bank statement, utility bill).

Step 3: Fund your account

After you’ve verified your account, you’ll need to fund it. eToro makes this as simple as can be. Just click on “Deposit Funds”, enter however much you want to invest, and press “Deposit”. eToro has a range of payment methods available, including credit/debit cards, e-wallet (PayPal, Skrill, etc), and bank transfer.

Step 4: Invest in Green Energy

Once you’ve funded your account you’re ready to invest in Green Energy! Just type “Green Energy” into the eToro search bar, press “Trade”, enter the amount you’d like to invest, and press “buy”. There you have it, now you’re a Green Energy investor!

Conclusion

Now that you’ve made it to the end of our guide, you’ll be equipped with the most important stuff you need to know about investing in Green Energy. We have discussed the best brokers to invest in Green Energy, some advantages and disadvantages to investing, and provided a detailed guide on how you can start investing in just a few short minutes. If you’re still undecided on which platform is best for you to start investing with, we would like to give you a recommendation. After having analysed security, ease of use, and quality of features, we concluded there was one clear winner, eToro. We hope you enjoyed our guide and if you are still unsure or undecided about investing in green energy, have a look at one of our other articles. Thanks for reading.

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FAQs

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About Enis Rexha PRO INVESTOR

Enis is an Economics expert with a focus on financial markets and cryptocurrencies. His are of expertise includes: fundamental analysis, technical analysis and macroeconomic analysis. He has a great deal of hands on experience on the space and a current focus on sustainable development.