The Jump to Renewables The Energy Information Administration (EIA) projects that renewable energy "will be the fastest-growing source of electricity generation in 2020." And I'm not surprised. This year, the EIA expects renewable energy operators to add 12.6 gigawatts (GW) of utility-scale solar and 23.2 GW of new wind farms. Projections show that renewable energy will provide 21% of America's electricity in 2020. That's a rise from 17% in 2019. Coal-fired generation, on the other hand, is rapidly losing ground. Last year, it was generating 24% of the electricity in the U.S. But in 2020, the EIA expects that to drop to just 17%. It's clear that coal-fired generation is rapidly on its way toward obsolescence. That's good news. It's a dirty, polluting and finite fuel. Renewable energy, on the other hand, is nonpolluting. And the supply is infinite. My Favorite PlaysToday, with hundreds of companies in the solar and wind business, I think the best way to play this exploding sector is through exchange-traded funds (ETFs). Here are my favorites, in no particular order. The First Trust Global Wind Energy ETF (NYSE: FAN) is focused on the wind sector. It tracks the performance of the ISE Clean Edge Global Wind Energy Index. Over the last year, the fund has gone up about 7.7% and has a dividend yield of 2.01%. The Invesco WilderHill Clean Energy ETF (NYSE: PBW) follows the performance of the WilderHill Clean Energy Index. Over the last year, its shareholders were rewarded with a 39.9% return. It also has a dividend yield of 1.19%. Finally, I like the Invesco Solar ETF (NYSE: TAN). It hands investors returns equal to the investment results of the MAC Global Solar Energy Index. Last year, its shares handed investors a 28.4% return. And it has a small 0.24% dividend yield. All three funds have at least 90% of their total assets in their underlying indexes. So I think we'll see excellent performances from these funds over the next decade. Good investing, Dave |
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