A new era for renewables

The renewable energy sector may have lost a few battles, but it’s winning the war—literally.

All eyes have been on the surging price of oil over the past few weeks as the Strait of Hormuz has remained effectively shuttered, and the global crude shortage has only underscored the need for alternatives like solar, wind, and other renewable energy sources.

Investors on Wall Street have clearly caught on: The iShares Global Clean Energy ETF, the largest clean energy ETF by assets under management in the world, has jumped 59.93% over the past year. The S&P 500, meanwhile, is up just 18.81% over the same time period.

Further abroad, the war has exposed Europe’s need for alternative energy sources, and could fuel a rally for European clean energy stocks.

But that’s not all: At the same time that rising oil prices have rattled markets recently, electricity demand was already surging—largely driven by, you guessed it, AI data centers.

In fact, data centers require so much energy that their development has slowed because the power grid has already been stretched to its limits, according to new research from energy consulting firm Wood Mackenzie. That means one thing: The tech industry needs a plethora of new energy sources, stat. With oil still over $100 per barrel, clean energy seems poised to fill that need.

A surprisingly sunny outlook

If you’ve been paying attention over the past few years, the recent gains in green energy stocks might surprise you. After all, the Trump administration has made its ire for renewable energy and anything vaguely climate-conscious abundantly clear—slashing subsidies and vowing to “drill, baby, drill.”

But projections show that alternative energy usage is only going to keep rising. Last week, analysts at Bloomberg projected that global solar installations will grow this year, reversing their previous projection that the rate would plateau. And according to the International Energy Agency, worldwide investment in clean energy rose to a record $780 billion last year, outpacing investment in oil and gas infrastructure.

Maybe it’s time to recycle your old expectations.—LB