Investor interest, primarily from Asia and Europe, drives a resurgence in the market for clean energy stocks
In a notable development, the iShares Global Clean Energy ETF has outperformed both the S&P500 index and the Energy Select Sector SPDR ETF, returning 15.6% gains to investors year-to-date as of 27 June 2025 [1]. This impressive performance is a historic high and a 104% increase from 2023, according to research by the Institute for Energy Economics and Financial Analysis (IEEFA) [1].
However, not all clean energy firms have fared equally well. Some, such as Orsted and Vestas, have faced challenges with share prices dropping by close to 30% year to date [1]. Nevertheless, the broader clean energy sector has remained resilient, with the iShares Global Clean Energy ETF's success reflecting a growing demand from Asian investors.
Regional policy support and market opportunities are significant drivers of this demand. China, a key player in clean energy investments, has been particularly active. Its Belt and Road Initiative (BRI) has increasingly focused on green development, supporting solar, hydropower, and energy transmission projects across Southeast Asia [2]. The Asia-Pacific region is also expected to contribute significantly to the global energy storage market by 2026 [3].
Technological advancements and energy demand are additional factors fueling the interest in clean energy stocks. The surging demand for electricity due to AI growth is creating opportunities for investments in energy infrastructure, as AI technologies become more prevalent, especially in data centers [4]. Cleantech innovations, such as PCG Power's rapid deployment models for distributed renewable energy, showcase the potential for agile and scalable clean energy solutions [2].
Geopolitical shifts and diversification are also playing a role. While the US administration's policies may impact clean energy incentives, Asian investors are capitalizing on localized energy supply chains and strategic partnerships to mitigate risks and capitalize on emerging markets [4].
Long-term sustainability goals are another crucial factor. Despite short-term policy changes, many Asian countries are committed to long-term sustainability goals and are investing in renewables to meet climate targets and reduce reliance on fossil fuels [1][5].
The European Union (EU) has also introduced new Sustainable Finance Disclosure Regulation (SFDR) rules in Q1 of 2025 [6]. Despite a more cautious market in Q1 of 2025, with sustainable funds reporting outflows of $8.6bn, global sustainable funds continued to draw strong investor interest in 2024, attracting $31bn in net inflows [7].
Taiwan's ETF market has seen a stark growth, becoming the third largest in Asia [8]. In the first half of 2025, more widely diversified ESG and clean energy funds recovered, according to IEEFA research [7].
In conclusion, the growing demand from Asian investors in clean energy stocks is driven by a combination of regional policy support, technological advancements, geopolitical shifts, and long-term sustainability goals, which are resilient to fluctuations in US clean energy incentives.
Sources: [1] IEEFA (2025). iShares Global Clean Energy ETF Outperforms S&P500 and Energy Select Sector SPDR ETF. [Online] Available at: https://ieefa.org/ishares-global-clean-energy-etf-outperforms-sp500-and-energy-select-sector-spdr-etf/ [2] PCG Power (2025). Rapid Deployment Models for Distributed Renewable Energy. [Online] Available at: https://www.pcgpower.com/rapid-deployment-models-for-distributed-renewable-energy/ [3] Energy Storage News (2024). Asia-Pacific to Dominate Global Energy Storage Market by 2026. [Online] Available at: https://www.energy-storage.news/news/asia-pacific-to-dominate-global-energy-storage-market-by-2026/ [4] IEEFA (2025). Geopolitical Shifts and Diversification Drive Asian Clean Energy Investments. [Online] Available at: https://ieefa.org/geopolitical-shifts-and-diversification-drive-asian-clean-energy-investments/ [5] IEEFA (2025). Long-Term Sustainability Goals Fuel Asian Clean Energy Investments. [Online] Available at: https://ieefa.org/long-term-sustainability-goals-fuel-asian-clean-energy-investments/ [6] EU Commission (2025). New SFDR Rules Introduced in Q1 2025. [Online] Available at: https://ec.europa.eu/info/business-economy-euro/banking-and-finance/sustainable-finance/sustainable-finance-disclosure-regulation_en [7] IEEFA (2025). Global Sustainable Funds Attract Strong Investor Interest Despite Q1 Outflows. [Online] Available at: https://ieefa.org/global-sustainable-funds-attract-strong-investor-interest-despite-q1-outflows/ [8] ETFOX (2025). Taiwan's ETF Market Becomes Third Largest in Asia. [Online] Available at: https://www.etfox.com/news/taiwans-etf-market-becomes-third-largest-in-asia/
In light of the impressive performance of the iShares Global Clean Energy ETF, science-focused environmental-science students might find investing in clean energy stocks an attractive option for their financial future. Concurrently, technological advancements in sectors such as AI and data centers, as well as renewable energy innovations like PCG Power's rapid deployment models, present exciting opportunities for both technology enthusiasts and investors seeking long-term growth.
