As investors weather a significant market downturn, many are shifting their focus to the energy sector. Energy is often seen as a safe investment pick in tough times since people and businesses always need power to keep the lights on.
Talk about energy stocks often turns to renewables -- solar, wind, geothermal, and the like. As countries around the world pivot to decreasing their reliance on fossil fuels, the renewable energy sector looks like a promising place to invest.
But what do everyday investors think about renewables? Are they investing? Will they increase their investments in the future? Are they buying, holding, or selling fossil fuel stocks? And does consumer sentiment suggest this might be a good idea?
To find out, The Motley Fool surveyed 2,000 Americans to learn about their thoughts on renewable energy.
Key findings
- More than 60% of investors own renewable energy stocks or funds, according to a recent Motley Fool survey, and another 27% say they don't but would like to.
- More than half of investors own fossil fuel stocks, and about two-thirds of those investors plan on continuing to invest in fossil fuel companies.
- Three-quarters of investors research companies' renewable energy or sustainability goals before investing.
- Consumers, homeowners, and renters find value in renewable energy -- a good sign for companies that place an emphasis on renewables.
More than 60% of investors own renewable energy stocks or funds, and the number is likely to rise
According to a recent survey from The Motley Fool, 62% of investors currently invest in renewable energy stocks or funds, and 27% don't but would like to. This means almost 90% of investors do, or probably will, invest in renewable energy stocks.
Only 10% of investors don't currently invest in renewable stocks and don't plan on doing so in the future.
This holds across most age groups and political affiliations. Investors 45 and older were split down the middle on whether they did or didn't own renewable stocks, but 70% of those who don't (totaling 35% of investors 45 and older) say they plan on it.
Younger investors are more likely to already own renewable energy stocks or funds, with 68% of investors younger than 45 already owning them and another 24% wanting to.
Republican-voting investors are twice as likely as Democrat-voting investors (15% vs. 7%) to say they don't own renewable stocks and don't plan to in the future.
Investors aren't ready to let go of fossil fuel stocks
Even though investors are embracing renewables, they're not divesting from fossil fuel-related shares. 52% of investors say they currently own fossil fuel stocks, and about two-thirds of them plan on keeping them.
While slightly less than half of investors don't own fossil fuel stocks, about half of those who don't own them say they'd like to in the future, indicating continuing interest in industries such as oil, coal, and natural gas.
Investors younger than 45 and those who tend to vote Democrat were more likely to say that if they own fossil fuel stocks now, they won't in the future.
Three-quarters of investors research companies' renewable energy or sustainability goals before investing
74% of investors in the Motley Fool survey said that part of their stock research includes a company's goals and policies on renewable energy or sustainability goals.
In looking at groups of respondents, 79% of investors younger than 45, regardless of political party, do this research before investing. This is an encouraging number for the world of ESG investing, even though both millennial and Gen Z investors placed ESG factors low on their list of investing priorities.
Again we see a split along political party lines, with 80% of Democrat-voting investors doing this research before investing and 69% of Republican-voting investors doing the same.
Bringing renewable energy to the home is a high priority for homeowners and renters
Investors are clearly interested in renewable energy stocks and funds. But what about consumers? Do they want to power their lives with renewable energy? Are they willing to support the companies providing renewable energy to their homes?
This survey says that they are. While 17% of homeowners said they have solar panels on their home, almost half of our respondents said that they don't have them but plan on installing them at some point in the future. That's a good sign for the home solar industry.
Most homeowners across the groups we surveyed are interested in having solar panels installed. Homeowners older than 45 were the most likely to say they weren't interested in installing solar panels (44%), followed closely by Republican-voting respondents (43%).
Among those who don't have solar panels or plan on installing them, about half said they weren't interested because the panels are too expensive.
| Why do you not plan on installing solar panels on your house? | Percentage of respondents |
|---|---|
| They're too expensive | 50% |
| I don't want solar power | 17% |
| They won't work on my roof | 12% |
| I don't know how to get them installed | 12% |
| Other | 9% |
Related energy topics
Renters want in, too
It's not just homeowners who want renewable energy powering their homes. A third of renters in the survey said they'd pay up to 10% more for an apartment building with solar panels.
Slightly more said they wouldn't pay more for a solar-powered apartment, but this group is still in the minority.
Consumers are willing to pay more for products and services powered by renewables
In addition to being interested in powering their homes with renewable energy, Americans are also interested in buying products and services that are manufactured or run using renewables.
Only 29% of respondents said they wouldn't pay more for a product or service manufactured or run using only renewable energy.
Most people said they'd pay up to 10% more, but a significant minority said they'd pay up to 50% more, and 8% even said they would pay more than 50% more for these products and services.
Conclusion
The future for renewables looks good for investors.
Investors are interested in buying more renewable stocks and funds. Consumers are willing to pay more for products/services made with renewables. Both homeowners and renters are interested in the solar industry.
The progress of the industry also depends heavily on technology and legislation both at the federal and state level. But in looking at investor and consumer sentiment, the future of renewable energy looks bright.
Methodology
The Motley Fool distributed this survey to 2,000 U.S. adults via Pollfish on Jan. 24, 2023.
Respondents were 57% female and 43% male. Age breakdowns were approximately 11% ages 18 to 24, 23% ages 25 to 34, 28% ages 35 to 44, 19% ages 45 to 54, and 18% older than 54. 40% of respondents reported generally voting for Democrats, 30% for Republicans, and 30% for independent/other.
