While federal support for clean energy initiatives is waning, the sector continues to attract significant interest from investors. This is largely due to the rising demand for electricity driven by advancements in artificial intelligence and declining costs of renewables. The S&P Global Clean Energy Transition Index, for instance, has seen a remarkable increase of 56.19% so far this year and 16.26% over the last quarter.
Reuters reports that despite President Trump’s reductions in clean energy funding, the sector remains buoyant. The International Energy Agency (IEA) recently revised its 2025–30 growth forecasts for U.S. wind and solar, reducing them by nearly 60% and 40%, respectively. This adjustment comes amid an accelerated phase-out of tax credits and delays in permitting processes.
However, the fundamental market dynamics continue to favor investments in U.S. renewables, as there’s a pressing need to upgrade the power grid across the nation.
Wall Street’s Interest in Clean Energy
Luba Nikulina, Chief Strategy Officer at IFM Investors, highlighted the robust demand for renewables in the U.S., primarily driven by the swift expansion of AI and digital infrastructure. This observation was noted in the previously mentioned Reuters article.
Last month, Brookfield announced it had raised a record $20 billion for its Global Transition Fund II, with an additional $3.5 billion from co-investments. According to Reuters, Brookfield has also finalized substantial clean energy supply agreements with tech giants like Microsoft and Google.
Todd Fowler, cited by Reuters, pointed out the necessity for significant and continued capital investments across the energy sector to meet the rising power demand. He also mentioned that the decreasing costs of solar, onshore wind, and battery storage are attracting new capital, while technologies that integrate multiple generation sources are becoming key investment trends.
Increasing U.S. Power Demand
The expansion of data centers, revitalization of U.S. manufacturing, and broader electrification are driving the first significant rise in U.S. power demand in decades. The U.S. Energy Information Administration projects power demand growth rates of 2.5% in 2025 and 2.7% in 2026.
According to another Reuters article, last year saw $2.2 trillion in global clean energy investment, more than twice the amount spent on fossil fuels. The adoption of solar and wind energy is accelerating, electric vehicle sales are surging, and energy efficiency improvements are gaining traction.
Also, the rising demand for AI is prompting major tech companies to secure clean energy sources for their data centers. The global AI market, anticipated to surpass $1.6 trillion by 2032, is increasingly aligning with clean energy, sustaining investor interest in the sector.
ETFs to Watch
With projections of continued growth, clean energy ETFs are becoming more appealing to investors. Here are several ETFs that offer increased exposure to the clean energy sector.
iShares Global Clean Energy ETF
The iShares Global Clean Energy ETF aims to replicate the performance of the S&P Global Clean Energy Index, involving a portfolio of 101 securities. The fund currently has assets totaling $1.94 billion and an annual fee of 0.39%.
The ETF’s average trading volume over the past month is approximately 3.57 million shares, with a one-month return of 7.51% and a three-month return of 18.07%.
First Trust NASDAQ Clean Edge Green Energy Index Fund
This fund aims to track the NASDAQ Clean Edge Green Energy Index with a collection of 50 securities. It holds $563.2 million in assets and charges a 0.56% annual fee.
With an average monthly trading volume of about 113,000 shares, the fund has seen gains of 10.74% over the past month and 28.37% over the past three months.
SPDR S&P Kensho Clean Power ETF
The SPDR S&P Kensho Clean Power ETF seeks to follow the S&P Kensho Clean Power Index with 42 securities. It has an asset base of $207.4 million and a 0.45% annual fee.
This ETF has a one-month average trading volume of approximately 14,000 shares, showing a 15% gain over the past month and a 42.22% gain over the past three months.
ALPS Clean Energy ETF
The ALPS Clean Energy ETF tracks the CIBC Atlas Clean Energy Index with 36 securities, possessing assets worth $115.1 million and an annual fee of 0.55%.
With an average monthly trading volume of about 31,000 shares, this fund has increased by 9.07% over the past month and 24.20% over the past three months.
Invesco Global Clean Energy ETF
The Invesco Global Clean Energy ETF follows the WilderHill New Energy Global Innovation Index with a portfolio of 110 securities, holding $94.7 million in assets and a 0.75% annual fee.
It has an average monthly trading volume of about 23,000 shares and has gained 6.63% over the past month and 20.48% over the past three months.
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