According to a new report from the World Economic Forum, the United States is lagging the rest of the world in clean energy transition. In the report, America was ranked 32nd out of 115 countries, making it the second time in two years that its position declined.
This puts the nation behind other highly developed countries like the United Kingdom, Sweden, France, and Canada. It is even falling behind less developed countries like Costa Rica and Columbia.
Two years ago, the United States was ranked 25th in the World Economic Forum’s Energy Transition Index.
Why Isn’t America Leading in Clean Energy?
Forms of clean energy, including solar and wind, are often used in the United States. However, the government has failed to encourage a shift away from fossil fuels on a large scale. President Donald Trump and his administration have strongly supported the struggling coal industry, removing restrictions set by former administrations. The head of the Environmental Protection Agency is a former coal lobbyist, raising some questions about how committed the agency is to transitioning the energy industry.
The COVID-19 crisis is also having an impact. With global trade interrupted, it is difficult for solar companies to source panels and other equipment from China. Costs are increasing, and this makes solar less compelling for homes and small businesses. This is expected to be a short term obstacle. Solar installations are likely to increase after the pandemic, and when global supply lines are reestablished.
How Much Clean Energy Does the United States Produce?
Currently, the United States generates 11% of its primary energy from renewable sources. 17% of domestically produced electricity is generated by clean facilities.
Although the nation is now lagging behind peers in Europe, there are still efforts to increase renewable capacity. Just this week, the Trump administration approved the construction of the largest solar farm in the U.S., which will supply enough power for more than 260,000 homes.
Investing in Renewable Energy with a Single Fund
Solar is by far the most exciting area of renewable energy, and it’s currently the most profitable for investors. Anyone looking to get started in the market will find value in the Invesco Solar ETF (NYSE: TAN), a fund that tracks high-potential solar energy companies.
This fund has been growing in recent days, with better than expected earnings from some of its key holdings. It currently offers a small dividend yield of 0.29%, but there’s plenty of room for growth as solar becomes more viable on a global scale.
America may well become a renewable energy leader in the mid-term future. Even if it doesn’t, investors can still leverage the wider growth in the industry.
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