The green investing trend is still thriving as investors seek to take advantage of the push towards a more sustainable society. Although it hasn't been one of the most fruitful years for ASX renewable shares, some experts think 2022 could be a record-setter.
Since the beginning of the year, ASX-listed utility companies have struggled to outperform the S&P/ASX 200 Index (ASX: XJO). Despite the association with a more defensive investment, the sector has failed to attract much attention this year.
Part of this disinterest could be put down to the ongoing uncertainty from clean-energy legislation. At the same time, market participants are wary of a potentially higher interest rate environment.
Regardless, some analysts are expecting a positive year ahead for the renewables industry, which could be a catalyst for ASX renewable shares.
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Hitting the gas on renewables in 2022
The energy researchers and analysts have been deep in their computer screens compiling their forecasts for a brand new year. A positive outlook for renewables has been reached by two completely separate teams.
Firstly, the United States renewable team at Deloitte has published their insights, painting an optimistic picture for 2022. Overall, Deloitte's team forecasts an acceleration in renewable energy growth next year. The combination of increased concern for climate change and government policies regarding decarbonisation will drive this.
In its report, Deloitte highlights its expectation for increasing demand for solar paired with energy storage. Additionally, if all of the large-scale battery projects planned for between 2021 to 2025 go live, it would increase the US' share of solar co-located battery storage to 50% from 24%.
Secondly, the energy research team at S&P Global Market Intelligence is also foreseeing an increase in the acceleration of renewable deployment next year. Commenting on this, head of commodities research at S&P Global Market Intelligence, Richard Sansom said:
It's going to be a record year for renewable energy development in the U.S. in 2022, with 44 GW of solar and 27 GW of wind power set to be installed alongside more than 8 GW of battery storage.
Closer to home, Australia had 10.4 Gigawatts (GW) of renewable projects under construction or committed at the end of March.
Picking a winner among ASX-listed renewable shares
If demand for renewables increases there could be a number of ASX-listed companies that would get a boost. Though, picking the winners from the losers might prove difficult.
The ASX boards are now littered with companies jumping on the green trend in some way or another. Exacerbating this is the expansion of what is considered 'green technology'. A full list might now include hydrogen producers and lithium miners — alongside the traditional solar and wind names.
Some of the more well-known renewable power generators underperformed the Australian benchmark this year (as pictured above). However, a number of hydrogen hopefuls and lithium producers blew the index clean out of the water with their returns.
Finally, even energy blue-chips could possibly be considered ASX renewable shares. The likes of AGL Energy Limited (ASX: AGL) and Origin Energy Ltd (ASX: ORG) now own a number of renewable energy assets. Though, it still pales in comparison to their fossil fuel segments.
