The Market Has Moved To New Energy
Clean energy shares streak ahead of fossil fuel stocks; Sharp fall in wind and solar costs has made renewables cheaper than coal and gas
Henry Sanderson (w/Leslie Hook), October 1, 2019 (Financial Times)
“Investors who bet on a shift from fossil fuels to clean energy are being richly rewarded as solar and wind stocks outperform oil and gas shares by a widening margin this year. The iShares Clean Energy exchange-traded fund has risen by 32 per cent so far this year, streaking far ahead of the oil-dominated Vanguard Energy ETF, which has risen by only 1 per cent. In August, the renewables fund bettered the fossil fuel ETF by the biggest margin in five years.
Renewable energy developers have been benefiting from a sharp reduction in the cost of wind and solar in recent years, which has made them cheaper than coal and natural gas at certain times in many markets. The cost of solar has fallen 85 per cent since 2010, while wind power has dropped about 50 per cent…Renewable stocks also outperformed oil and gas shares in 2017 and 2018, although both sectors ended last year down. So far this year, the largest renewable energy ETF in the US, Invesco Solar, has risen 58 per cent. Low global interest rates are also helping, making it easier to fund solar and wind projects that have high upfront costs but low operating costs…Even the largest oil companies that have pledged to boost their dividends are not receiving support…” click here for more