Can investing green help you keep ahead of the inflation curve?

With the expanding green energy sector, and the constant potential for growth in that sector, investment opportunities have begun to show their worth to many of the leading investors across the globe.

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The current rate of inflation is 5%, although the Bank of England has warned that it could increase to 7%. The average yield of many green investments totals around 5.55%.

With current yield being largely in the positive, investment in green technologies will likely be supported by a strong tailwind. With governments around the world pledging to achieve their net zero goals, as well as pushing companies to follow their example. 

Taking advantage of many of these green investments can mean that you stay ahead of average UK inflation, as well as support green projects and developments.

Investment trusts mean that you can support a multitude of projects across the UK, that can vary from installation of solar panels in commercial and industrial environments, to the development and installation of energy storage. However, a lot of these green investment trusts trade at a premium above what the shares may be worth, especially if you are investing as part of a trust, with the sector average being roughly 7%. As an example, Greencoat UK Wind is at 6.1%, while Greencoat Renewables is 10.9%. 

 

As with all investments, only invest what you can lose, as markets can be volatile. Another thing to keep in mind is that while energy prices are soaring right now, there is a chance that they can stabilise, and maybe even drop, as green energy becomes more widely available, so investments into developing green technology can lose value.