Wind and Solar Energy Production Market in the USA

It was a milestone for the renewable revolution when NextEra Energy, a solar and wind power provider, briefly surpassed the oil giant ExxonMobil in market value in the first week of October.

When NextEra Energy, based in Juno Beach, Florida, reached a market capitalization of US$143.8 billion on a trading day on October 7, 2020, it was worth $900 million more than the oil giant Exxon and $2 billion more than Chevron, the CBS news reports.

NextEra and other renewable energy are seeing significant growth due to the increasing awareness of climate change and its impacts. In contrast, oil companies are experiencing a steady decline.

ExxonMobil’s value started shrinking in 2007, and the company took another blow from the effects of coronavirus on travel and oil consumption.

Despite NextEra’s coming head-to-head with Exxon in market value, their revenues and share prices are almost at opposite poles. Exxon raked in $255 billion in revenue, while its stock is valued at $33 per share.

NextEra’s revenue last year was $19.2 billion, but the company is trading stocks for $287 per share, indicating that investors are optimistic about its future growth.

Reasons for the success of the renewable energy market in the US

An investor and professor at Columbia Business School, Bruce Usher, says that “hundreds of billions of dollars of capital are flowing into clean energy because it is where you can get the biggest returns” (Ivanova, 2020).

The CBS article says that alternative energy like solar, wind, and hydroelectric power is the cheapest energy source today in the U.S., explaining its investor appeal despite government policies. (Ivanova, 2020).

Clean energy stocks are on fire, and companies are experiencing success and growth. One company, particularly the Invesco WilderHill Clean Energy ETF, has spiked 90% this year. According to a CNN article, Tesla, an electric car maker, even surpassed Toyota’s market value this year (Egan, 2020).

The generous tax credits drove the success of renewable energy, government mandate requiring renewable sources into the power mix in over half of all its states, and the drastic reduction of wind and solar farm costs (Phan, 2020).

The success of renewable energy and the slowing down of oil and fossil fuel companies show that consumers’ and investors’ behaviour is shifting in favour of renewable energy.

People are taking climate change and preserving our environment more seriously amid calls for a green recovery after the coronavirus pandemic.

Young people are mainly the ones rooting for the success and expansion of cleaner and renewable energy to prevent climate change and as a more sustainable energy source.