I think investing in renewable energy stocks could seriously boost my wealth as clean energy demand soars. Here are two green UK shares I’m considering buying in April.
Winds of change
As the name suggests, Greencoat UK Wind (LSE: UKW) specialises in the business of wind-generated electricity in Britain. It could therefore be well placed to benefit from the country’s rapidly-growing appetite for this sort of green power.
According to Renewable UK, Britain’s pipeline of offshore wind projects sits at an eye-popping 86MW. That’s eight times more than current capacity in the UK, the trade association says. Meanwhile rumours abound that the government is about to introduce planning reforms to make it easier to build onshore wind farms. This is designed to help Britain meet its net zero targets and reduce its dependency on Russian fossil fuels. Now could be a great time to invest in wind energy stocks, then.
Too cheap to miss?
Greencoat UK Wind has 43 wind farms on its books following fresh acquisition activity in February. And it has considerable financial firepower to continue growing its portfolio after raising £648m via two separate share placings last year.
The costs of operating wind farms can be unexpectedly expensive. This has the potential to hit profits at the likes of Greencoat UK hard. But I still think the long-term benefits of owning this renewable energy stock outweigh the risks.
Besides, Greencoat offers the sort of all-round value I think is hard to ignore. City analysts think earnings here will rocket 32% year-on-year in 2022. This leaves the business trading on a forward price-to-earnings (P/E) ratio of just 6.2 times.
The green energy giant also carries a mighty 5.1% dividend yield right now.
Another renewable energy stock I’d buy
Gore Street Energy Storage Fund (LSE: GSF) is another green energy business I’m considering snapping up today. This company builds and acquires battery storage projects across the UK and it recently entered the Republic of Ireland too.
Gore Street provides an essential role in the world of low-carbon electricity. The technology it invests in is able to store the excess electricity that renewable projects generate. The wind doesn’t always blow and the sun doesn’t always shine. Gore Street’s battery projects then allow a constant stream of electricity to flow 365 days a year.
Battery demand set to boom
I’m concerned about the amount of debt that Gore Street has accrued to pursue its expansion strategy. With interest rates rising the cost of serving its debts could head through the roof.
Still, in my opinion the bright outlook for the energy storage market means Gore Street remains an attractive UK share to own today. Analysts at Fortune Business Insights believe the battery energy storage market will be worth $26.8bn by 2028, up from $9.2bn last year.
Right now Gore Street’s forward dividend yield sits at 6.1%. As an income investor I find this sort of value hard to ignore. Like Greencoat UK Wind, this is a renewable energy stock I’d happily buy in April.
