Renewable energy ETFs at a glance

Green energy is no longer just a trend – it’s a global megatrend. More and more people want to live more sustainably and invest more sustainably. That’s why many eventually find themselves looking into renewable energy ETFs. But what’s actually inside these funds? And what should you keep in mind before investing?

This article gives you a quick, clear overview – with a real-world example: the Invesco Global Clean Energy UCITS ETF Acc.

Why invest in renewable energy in the first place?

The world is shifting rapidly toward renewable energy sources like wind, solar and hydropower. Political programs like the EU Green Deal and national climate targets are driving this transition. At the same time, governments and companies are pouring billions into building out green infrastructure.

So it’s not just socially relevant – it’s economically interesting too. And because investing in a single solar stock, for example, can be risky, ETFs offer a simple solution: they bundle many companies from the sector into one product – broadly diversified and usually low-cost.

What exactly is a renewable energy ETF?

An ETF (exchange-traded fund) is a fund that trades on the stock market and tracks a specific index. A renewable energy ETF contains companies that operate in this sector – for example, solar panel manufacturers, wind turbine makers, or energy storage innovators.

Many of these ETFs follow specialised indices like the Wilderhill New Energy Global Innovation Index. This index includes companies involved in:

• Wind, solar, and hydropower
  
  
• Bioenergy, geothermal, tidal, and wave energy
  
  
• Energy conversion and storage
  
  
• Energy efficiency and conservation
  
  
• Hydrogen, fuel cells, and CO₂ reduction
  
  
• Environmental tech and pollution control

The index is reviewed and rebalanced quarterly – so it stays current and diversified.

Example: The Invesco Global Clean Energy UCITS ETF

A well-known ETF tracking this index is the Invesco Global Clean Energy UCITS ETF Acc. It invests in companies from around the world that focus on renewable energy production, storage, and efficiency. It’s an accumulating ETF, which means dividends are automatically reinvested – helping compound returns over time.

The fund is broadly diversified: it includes both big players in wind and solar and smaller specialists in areas like hydrogen or battery storage.

Looking at the global clean energy ETF price, you’ll notice the fund has had its ups and downs – more on that below.

What to consider before investing

A renewable energy ETF can be exciting – but it also comes with specific risks.

1. High volatility

This sector is sensitive to policy changes, interest rate shifts, and economic cycles. A change in subsidy programs or trade policy can move prices quickly.

2. Weak recent performance

In 2023 and early 2024, many clean energy ETFs went through a rough patch. Why?

• High interest rates made long-term tech investments less attractive
  
  
• Oversupply in areas like solar weighed on margins
  
  
• Political uncertainty after the 2024 U.S. elections added instability

Some funds even showed double-digit losses. But: the outlook for 2025 is brighter. Global investments in renewable energy are at a record high, demand continues to grow, and technology is becoming increasingly affordable. BloombergNEF reports that global investment in new renewable energy projects reached a record of US$ 386 billion in the first half of 2025, an increase of about 10% compared to the previous period.

3. Think long-term

The structural drivers – climate goals, decarbonization, energy independence – are still intact. Long-term investors who can ride out short-term turbulence may find attractive opportunities. It’s just important to be realistic about the risk and potential for volatility.

How to invest in renewable energy ETFs

You can invest in a renewable energy ETF through an online broker or via a monthly savings plan – for example, with an app like Peaks, which offers ready-made ETF portfolios.

For volatile sectors like this one, monthly investing can make sense: by investing smaller amounts regularly, you smooth out your entry prices over time.

Important: This article is not investment advice, just a guide to help you get oriented.

A green theme with long-term potential

Renewable energy ETFs let you take part in the energy transition – not just as a consumer, but as an investor. They bring together innovation, sustainability, and growth potential in one product. But they’re no sure thing.

Volatility, political shifts, and global macro trends affect these funds more than broader ETFs like the MSCI World. But if you understand that, and have a long-term perspective, there could be real opportunities ahead.