The Motley Fool

3 UK renewable energy shares I’d buy

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Windmills for electric power production.
Image source: Getty Images

I think UK renewable energy shares make a great long-term investment as part of a diversified portfolio. Economies are focusing on sustainability as well as net zero carbon emissions to drive the message of climate change.

As my fellow Fool Edward Sheldon points out, the UK renewable energy market is set to grow at approximately 9% per year from now until 2026. To me, this sounds appealing.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

I think there are some great UK renewable energy investment trusts. Not only do these offer investors attractive dividend yields, but also exposure to a portfolio of clean energy assets. Here are three of my top picks.

#1 – The Renewables Infrastructure Group

The Renewables Infrastructure Group (LSE: TRIG) is a great way to get broad exposure to the sector. It has 77 investments across solar, both onshore and offshore wind, as well as battery storage. These are located across the UK and Europe.

What I really like is that the trust offers investors a diversified portfolio of renewable energy assets. This way I’m spreading my risk as the concentration of each investment is reduced. The management team is also looking to expand the portfolio, which should reduce my risk even further. As an income addict, TRIG generates a dividend yield of over 5% that’s attractive to me.

But the investment trust is trading at almost a 10% premium to its Net Asset Value (NAV). This means that it isn’t cheap and the UK renewable energy share comes at a cost that could maker buying it riskier.

#2 – Greencoat UK Wind

Greencoat UK Wind (LSE: UKW) has wind farms across the UK. I guess this is fairly obvious from the trust’s name.

The portfolio comprises 38 operational wind farms and one that is under construction. Approximately 70% of its assets are based onshore with the remaining 30% being offshore. While this investment trust is only focused on wind, it’s still diversified across various sites.

I reckon this is a good way of getting sole exposure to wind energy. As an income investor, the dividend yield is also attractive too. It currently stands at over 5%.

But just like TRIG, Greencoat UK Wind comes at a price. This renewable energy share is currently trading at a 6% premium versus its NAV.

#3 – Bluefield Solar Income Fund

If I only wanted exposure to solar energy, then I’d buy the Bluefield Solar Income Fund (LSE: BSIF). This stock also generates an attractive dividend yield of over 6%.

The portfolio consists of over 100 operational solar assets across the UK. These include typically large agriculturally situated solar farms, as well as a number of small industrial and commercial sites.

What I think is interesting is that BSIF shareholders voted last year to expand the investment mandate. It’s no longer restricted to investing in UK-based assets.

The trust can also invest a minority amount of its money into other renewable energy such as onshore wind, hydro and storage. I guess the portfolio will expand over time but for now, it’s heavily invested in solar energy.

As with the previous two stocks, BSIF is expensive. It trades at a premium of 9% versus its NAV. And I think this gap could widen, especially now that the investment mandate has become broader.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Nadia Yaqub has no position in any of the shares mentioned. The Motley Fool UK has recommended Greencoat UK Wind. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.