While some actors focus on traditional policies, the urgency of curbing climate impacts is higher than ever on the international agenda. Solar panels on rooftops, wind turbines on the horizon and electric cars on the streets are proof that renewable energies are not a promise, but a multi-billion dollar reality.

But what does this mean for your savings? Much more than meets the eye. Investing in this sector not only contributes to the well-being of the planet, but can also be an excellent opportunity to grow your money in a growing industry.

The rise of artificial intelligence (AI) has boosted energy demand, making renewables a strategic and profitable investment.

With the exponential growth of data centers and technology infrastructure, the sector's energy consumption has multiplied, creating an urgent need for sustainable and efficient sources. Giants such as Google, Microsoft and Amazon are already betting on clean energy to power their servers and reduce their carbon footprint. In addition, AI is optimizing the management of renewable sources, improving production forecasting, storage and grid integration.

Where sun and wind generate wealth

Renewable energies offer multiple possibilities for investors, especially in the following sectors:

1. Solar Energy: The market for solar panels continues to grow, with increasing demand in homes and businesses.
2. Wind EnergyWind turbines power onshore and offshore projects that supply entire communities.
3. Green HydrogenWith the use of renewable electricity, this technology is opening up new possibilities for both startups and large corporations.

In 2024, global investment in clean and sustainable energy sources exceeded $300 billion, and the trend is expected to continue to rise. In Chile, for example, according to the National Energy Commission and the Capital Goods Corporation, two green hydrogen plants are expected to open this year, with more than US$28 billion in renewable energy projects under environmental assessment. The country has set itself the goal of becoming one of the largest producers of green hydrogen in the world, backed by its geographical location, optimal climatic conditions and public policies promoted by the Government, such as the Green Hydrogen Action Plan.

Not everything shines under the sun

Despite the promises and enthusiasm, investing in renewable energies is not without risk:

• Policy dependenceMany projects depend on government subsidies and/or incentives. Changes in regulations could affect their viability.
• Competition with fossil fuelsIn some markets, oil and gas remain cheaper, which could slow the growth of renewables in the short term.
• Climate and technologyConstant innovation is key; companies that do not adapt quickly could lose competitiveness.

Diversification within this sector is essential. Investing in different parts of the renewables value chain can mitigate risks and increase opportunities.

An alternative for all

Investment in sustainable resources is booming. Large Asset Managers have invested in specialized funds in recent years, aligning global incentives with technological advances. Today, access to these products is easier than ever, through ETFs, green bonds, specialized portfolios and investment funds.

Renewable energy is not just a fad, but the future of a more sustainable economy. Although there are risks, the opportunities are unique for those who are willing to take advantage of them.

DISCLAIMER.

Raimundo Fuenzalida

Portfolio Manager Private Debt Fynsa AGF