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66 % in a tender process to attract developers . Despite fiscal constraints among many western governments , the green transition is a top agenda for voters , and countries serious about the climate crisis will have to support the transition .
Lastly , structural tailwinds indicate continued staunch support for renewable energy . The International Energy Agency ( IEA ) expects global investment in renewable energy to reach US $ 2 trillion this year , a c . 65 % increase since 2020 and almost double that of fossil fuels . Renewable energy investments will need to more than double to US $ 4.3 trillion annually by 2030 to achieve net zero carbon emissions by 2050 .
Jakob Westh Christensen , Market Analyst , eToro
With company valuations down and tailwind from rate cuts , improved sector profitability and structural demands for the sector , renewable energy stocks have the potential to overperform in the years ahead . However , as a retail investor , we need to respect that this is still a new and evolving sector , and it is crucial to have patience and , more importantly , to spread our exposure across multiple companies and types of renewable energy solutions to reduce our risk and dependence on a single technology . � interest rate cuts of 0.25 basis points over the next few years .
The sector ’ s profitability is also set to recover after a surge in production and material costs over the last few years that put pressure on profitability . Uniquely , the sector has suffered from being unable to pass on higher costs with electricity settlement prices that are often agreed upon many years into the future . This became evident in several tenders for the construction of wind farms in Germany and Spain , where no developers submitted bids because it was simply not profitable at the settlement price offered by the governments .
However , sector profitability could finally improve , with production and material inflation fading and governments stepping up to support the green transition . For example , we have seen the UK government increasing the settlement price for offshore wind farms by
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