When it comes to renewable energy shares, The Renewables Infrastructure Group Limited (LSE:TRIG) is my stock of choice. It is a company that invests in several different renewable energy technologies. It also has a dividend yield of around 5% and it aims to pay a dividend of 6.76p per share in 2021.
With the impending issue of climate change and the focus on shifting to clean and renewable energy generation methods, it seems obvious that renewable energy shares should make up a part of my portfolio. With the UK and other government’s ambitious targets, such as net-zero carbon emissions by 2050, I think that there is plenty of room to expand renewable energy infrastructure.
What’s so good about The Renewables Infrastructure Group?
I think that The Renewables Infrastructure Group is a particularly good renewable energy share to reap the rewards of a transition to a clean energy system. Firstly, the company has investments in several generation methods: solar, onshore wind, offshore wind, and battery storage. This variety means that it has some protection if it becomes unfavourable for one generation method to be used.
The company can also benefit from geographic diversity. It has projects in the UK, the Republic of Ireland, France, Sweden and Germany. Investments are UK-focused – 60% of the portfolio is in the UK now – but its investment policy dictates that this can be as low as 35%. Impacts to projects in some locations from regulation, energy markets or weather may not have such a large impact when geographically diverse compared to operating in a smaller geographic area.
The Renewables Infrastructure Group isn’t the only renewable energy share that focuses on infrastructure; Two other options that I have also considered adding to my portfolio are JLEN Environmental Assets Group and Greencoat UK Wind. While these both currently have a similar dividend yield, both have higher ongoing charges. Greencoat and JLEN have ongoing charges of just over 1%. The Renewables Infrastructure Group’s ongoing charges are just below 1%. While these charges appear to be small, they can have a detrimental impact on long-term investment growth.
Lower fees and increased diversity are why I favour The Renewables Infrastructure Group.
There are some risks that I am considering regarding purchasing this share. The income of the company may be affected by changes to government support for renewable energy, as well as changes in the price of energy, which could potentially adversely affect the company. As with all solar and wind generation, it relies on the weather, which is changeable, so electricity production could be lower than expected.
There’s an important point still to mention. Investing in renewable energy has the benefit of being more environmentally friendly and could help me to make a positive change in the world. Overall, this renewable energy share appears to be a great choice to add to my portfolio for share price growth and long-term dividend income.
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Oliver Mardlin owns shares in The Renewables Infrastructure Group and Greencoat UK Wind. 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.