The renewable energy market: Companies’ development and profitability

Abstract

Investing in the renewable energy sources (RES) is gaining in popularity each year with the amount of investment gradually increasing and surpassing further records. In the last few years, investments in the commissioning of RES-based capacities have exceeded the financing of traditional energy capacities. As a result, the relevance of a comprehensive study of the motives behind investing in renewable energy (RE) is becoming more acute. The methodological basis relies on the provisions of the authors’ concept of competition in the global energy market, as well as the theory of aggregate risk. During the study, the authors apply a wide spectrum ofquantitative and qualitative evaluation methods, including the econometric, financial and economic evaluation, retrospective and system- based approaches. The paper presents the results of the analysis of investment in the global renewable energy market. The analysis reveals the types of RES and countries with the greatest investment potential in this market. Our method of studying the dependence of market profitability of renewable energy companies relies on the assessment of a set of quantitative and qualitative indicators. The method allows assessing the system of financial indicators of companies on the basis of methods of econometric analysis, as well as a number of specific risks of the industry by expert means. The paper provides the case study of the world’s top renewable energy companies. The obtained results can be used to design an integrated model for assessing the investment potential of renewable energy companies, taking into account its regional characteristics, to improve the methodology for assessing the dependence of market profitability on investments in renewable energy, as well as to perform the empirical evaluation of the efficiency of investments in the energy sector.