With the U.S. Government unveiling an unprecedented $20 billion in funding from the federal "green bank" for clean energy projects, a new era of government support for green initiatives is dawning. These projects range from residential heat pumps to electric vehicle charging stations and community cooling centers.
Further investments totaling $7 billion are being dedicated to the Solar for All program, focusing on low-income communities. The aid reflects the largest ever investment in community-based climate projects in the U.S. history.
Inside the Green Shift
Over the past decade, the U.S. has been gradually reducing its carbon footprint. According to the Energy Information Administration, the renewable energy share of U.S. energy consumption has more than doubled since 2008. This dramatic increase has been fueled primarily by advancements and cost reductions in wind and solar technology, as well as rising awareness of climate change impacts.
With the Biden administration's commitment to achieve a 100% clean energy economy and reach net-zero emissions by 2050, the pace of this transition is only expected to accelerate.The U.S. government has shown readiness to invest heavily in clean energy, with billions of dollars set aside in the infrastructure plan for renewable energy projects, grid modernization, and electric vehicle infrastructure.
An Opportunity for Underserved Communities
Significantly, the investment is targeted towards disadvantaged communities, often overlooked by commercial investors and banks. It is intended to draw private capital into these neglected areas. The Clean Communities Investment Accelerator, worth $6 billion, is earmarked to provide grants to nonprofits working on clean technology projects in low-income communities. The $14 billion National Clean Investment Fund is poised to provide grants to national clean financing institutions.
Future of Clean Energy Investment
While there are critics to this initiative, its proponents argue that the investment is crucial for tackling the climate crisis and reshaping the economy. The green bank will likely unlock billions of dollars in private investment and transform the clean energy landscape in the United States.
Time for Clean Energy ETFs
With the government acting as a strong financial backstop, there is likely to be a marked increase in interest in clean energy-focused ETFs. Against this backdrop, below we highlight a few clean-energy that are poised to benefit from such consistent government moves. These ETFs gained handsomely in the past week (as of Jul 14, 2023).
ETFs in Focus
Global X Hydrogen ETF HYDR – Up 13.8% Past Month
Direxion Hydrogen ETF HJEN – Up 12.1% Past Month
Global X CleanTech ETF CTEC – Up 9.1% Past Month
First Trust NASDAQ Clean Edge Green Energy Index Fund QCLN – Up 9.1% Past Month
ALPS Clean Energy ETF ACES – Up 9.1%
Invesco Global Clean Energy ETF PBD – Up 8.4%
(Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.)
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>First Trust NASDAQ Clean Edge Green Energy ETF (QCLN): ETF Research Reports
Invesco Global Clean Energy ETF (PBD): ETF Research Reports
ALPS Clean Energy ETF (ACES): ETF Research Reports
Global X CleanTech ETF (CTEC): ETF Research Reports
Direxion Hydrogen ETF (HJEN): ETF Research Reports
Global X Hydrogen ETF (HYDR): ETF Research Reports
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
