2016 – The year renewable energy stocks made their impact on the market
Overreliance on oil and commodities such as iron ore has long been a problem facing many of the world’s biggest import and exporters. It is either the importers being over reliant on external natural resources to survive, or the exporters relying on a never ending thirst for oil and natural minerals. Both sides of the coin remain heavily exposed to the fluctuating desires and needs of the world marketplace and we see a microcosm of this reflected in the global stock markets. The biggest companies in the world are so heavily reliant on the sale of oil and other natural resources that any elongated continual decline in demand has huge ramifications for global stock markets, and may threaten to push the world into another recession.
The trouble is, this paints a worrying picture of the global economy and has many governments, traders and businessmen worried. The reality is however, the only companies and stocks facing worrying times ahead are those directly and indirectly linked to the exploitation of natural resources. As amongst this backdrop, and buoyed by 2015’s Paris climate summit, several stocks and companies who are heavily interested in the renewable sector are actually performing very well, and could even be tipped as the ‘ones to watch’ for 2016.
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Sadly, it would be impractical to list every renewable stock worth tracking this year. With so many challenges facing the world however, the smart investor could do much worse than dumping their commodity stocks, instead researching heavily which renewable source or company they believe are going to make the biggest or most innovative steps in 2016.
To help you on your way, I have listed my one to watch for the following year;
SolarCity Corporation (NASDAQ:SCTY)
Owned by Elon Musk, the founder of PayPal & Tesla, the SolarCity cooperation is the US’s largest supplier of solar panels, controlling 34% of the US market share shown by analysts at IG. Despite this, many people questioned the viability of SolarCity in early floatations, with many of their contracts seemingly very low profit due to high installation costs. Many observers nonetheless, failed to take into account the length of many solar contracts, which often stretch for decades. Meaning what is initially a loss or break even contract, quickly becomes extremely profitable when the initial installation costs are covered.
With environmentalism at the epicentre of Obamas legacy project, you can be sure that Solar Energy will be thrust to the forefront of the battle against climate change in 2016. How well will your stocks do? Well that will depend how early you get in.
