As Renewables Eclipse Coal, Is it Time to Invest in Clean Energy ETFs?

Core Insights - The clean power revolution has reached a critical tipping point, with global solar and wind generation surpassing electricity demand growth in 2023, indicating a significant shift in the energy landscape [1][2] Renewable Energy Growth - Renewable energies have generated more power than coal for the first time, with solar generation increasing by 31% and wind by 7.7%, resulting in a surge of over 400 terawatt hours [2] - The long-term growth prospects for clean energy are substantial, as companies providing technology and infrastructure are well-positioned for sustained expansion [3] U.S. Market Dynamics - The U.S. clean energy sector has faced challenges, with solar capacity installations declining by 24% year-over-year and wind installations down by 60% in Q2 2025 [5][6] - The decline in the U.S. sector is attributed to policy shifts and regulatory uncertainty, particularly under the Trump administration [4][6] Global Market Resilience - Favorable economic and policy factors in Asia and Europe have outweighed the softness in the U.S. renewable sector, driven by the decreasing costs of solar and wind energy [7] - The demand for renewable energy is being bolstered by new technologies, such as data centers supporting the AI boom, creating a robust demand floor [7] Investment Outlook - The International Energy Agency has revised its global renewable power capacity growth forecast for 2030 down by 5%, primarily due to U.S. policy changes and regulatory shifts in China [8] - Despite these challenges, industry experts remain optimistic about the long-term fundamentals of clean energy, with many developers maintaining or increasing their capacity deployment targets for 2030 [9] Clean Energy ETFs - The dynamics of the clean energy market present opportunities for investors in clean energy ETFs, which provide diversified exposure to the evolving energy landscape [10] - Notable ETFs include: - iShares Global Clean Energy ETF (ICLN): $1.76 billion in net assets, up 44.9% year-to-date, with an average volume of 3.39 million shares [11] - First Trust Nasdaq Clean Edge Green Energy ETF (QCLN): $532.1 million in net assets, up 30.3% year-to-date, with an average volume of 146,371 shares [12] - ALPS Clean Energy ETF (ACES): $112 million in net assets, up 32.2% year-to-date, with an average volume of 28,343 shares [13] - Invesco WilderHill Clean Energy ETF (PBW): $31.79 per share, up 59.3% year-to-date, with an average volume of 1.35 million shares [14]