This article is general information, not financial advice. The value of investments can fall as well as rise. Consider speaking to an FCA-authorised financial adviser.
Green energy investment means channelling money into renewable power, storage, grids and the other infrastructure that supports them. In 2026, about $2.2 trillion of global energy investment is set to go to grids, storage, low-emissions fuels, nuclear, renewables, efficiency and electrification, against about $1.2 trillion for oil, gas and coal, according to the International Energy Agency (IEA). But a growing sector does not guarantee good returns for individual investors. London-listed renewable energy investment trusts lost heavily in share-price terms between 2022 and 2024, even as the energy transition carried on.
This guide explains where the money is going, the ways ordinary people get exposure, and the risks that are easy to overlook.
Where the money is going
The IEA expects global energy investment to reach $3.4 trillion in 2026, a slight increase on the previous year. Renewable power accounts for around $665 billion of that, of which solar is $365 billion. Grid investment is approaching $550 billion, up nearly 20% year-on-year, and battery storage investment is set to exceed $100 billion. On the fossil side, oil investment is falling below $500 billion, while gas is rising to $330 billion.
Interest rates matter a great deal here. Wind and solar have no fuel costs but high upfront costs, so their economics depend heavily on the cost of borrowing. In May 2026 the IEA warned that volatility from the Middle East conflict was slowing near-term investment decisions and raising long-term financing costs. It said capital-intensive technologies could be hit hardest, especially in emerging and developing economies.
The UK picture: scale and structure
The government’s Clean Power 2030 Action Plan (December 2024) estimates that about £40 billion a year of investment is needed on average between 2025 and 2030 (undiscounted, in 2024 prices). That is roughly £30 billion for generation and £10 billion for transmission, much of it expected to be private investment.
A key tool for attracting that money is the Contract for Difference (CfD). The generator receives a fixed “strike price”: when the market price is below it, the generator is topped up; when the market price is above it, the generator pays back the difference. This makes revenue more predictable, which lenders and investors value.
In Allocation Round 7 (offshore), with results published on 14 January 2026, 8.44 GW was awarded. This included offshore wind in England and Wales (6.87 GW at £65.45/MWh in 2012 prices, or £91.20 in 2024 prices), Scotland (1.38 GW at £64.23/MWh in 2012 prices) and floating offshore wind (0.19 GW at £155.37/MWh in 2012 prices).
Allocation Round 7a, covering onshore wind, solar and tidal, reported on 10 February 2026 and awarded 6.23 GW. That included solar PV (4.91 GW at £46.82/MWh in 2012 prices, or £65.23 in 2024 prices), onshore wind (1.31 GW at £51.85/MWh in 2012 prices, or £72.24 in 2024 prices) and tidal stream (20.9 MW at £190.19/MWh in 2012 prices). Together, the two rounds contracted about 14.7 GW.
Great British Energy (GBE) is the publicly owned clean energy company, headquartered in Aberdeen. According to its 2025–26 annual report, published in September 2026, the overall funding commitment for GBE and GBE-Nuclear is £8.3 billion over this Parliament. That figure covers nuclear as well as renewables, so not all of it is renewables money.
GBE’s investments so far include £255 million for a Solar Partnerships Scheme (solar on schools, NHS and military sites), a minority stake in the Pentland floating offshore wind project with an option to invest up to £50 million, £40 million for a 10.4% stake in electrolyser maker ITM Power (agreed in April 2026) and £7.5 million in Naked Energy (August 2026). These are public investments, not products the public can buy.
Under the government’s Local Power Plan (February 2026), GBE is dedicating up to £1 billion over the rest of the Spending Review period to local and community energy, aiming to support over 1,000 local and community projects by 2030. The plan says GBE will offer shared-ownership loans so communities can buy stakes in larger local renewable projects, and that local people will be able to buy shares in nearby larger projects. That second route is planned, not yet available. The government also plans to consult in 2026 on a mandatory shared-ownership offer.
How ordinary people get exposure
The routes below are categories, not recommendations. Each carries different risks, set out further down.
Listed renewable energy investment trusts are closed-ended companies listed on the London Stock Exchange that own operating wind farms, solar parks, batteries and similar assets, and pay out income from electricity sales and subsidies. The Association of Investment Companies (AIC) groups them in a “Renewable Energy Infrastructure” sector. Their shares trade at a market price that can be well above or below the value of the underlying assets (the net asset value, or NAV). That gap is called the premium or discount.
Funds and ETFs hold shares in clean-energy companies such as turbine and panel makers and utilities. Their value tends to be more volatile, because it tracks company profits rather than contracted power sales.
Community energy shares let you buy shares in a local co-operative or community benefit society that owns, for example, a community wind turbine or rooftop solar. These usually pay modest interest from electricity income, and any surplus can go to a local community fund.
Indirect routes include pensions and ISAs that use sustainability-labelled funds, or choosing a supplier that owns generation. Our guide on why switch to renewable energy covers how supplier choice works.
What the numbers say about community energy
Community energy is active but small. The Community Energy State of the Sector 2025 report, covering 2024, found £24.5 million reinvested locally, turnover up 58% and community benefit funds up 138%. It also flagged stalled generation capacity (379 MW in 2024), declining project pipelines and policy barriers.
Coverage of the same study reported that 614 organisations delivered community energy schemes in 2024, generating 575 GWh from 411 MW of capacity, and that the sector raised £24 million for new projects. The Local Power Plan cites around 1.9 GW of local government and community energy projects in the pipeline in Great Britain. For scale, 411 MW of community capacity is small next to the 14.7 GW contracted in the AR7 and AR7a rounds alone. The 2026 edition of the report had not been published at the time of writing.
Limitations and honest assessment
A growing industry does not guarantee good returns. The assets owned by renewable trusts kept generating, but their share prices fell when interest rates rose.
UK Bank Rate rose from 0.1% in March 2020 to a peak of 5.25% in August 2023. Cuts began in August 2024, and the rate reached 3.75% in December 2025, where it remained at the September 2026 decision. Higher rates hurt these trusts in three ways, as interactive investor explained in August 2023. Income investors could get about 5% from short-dated government bonds, so they were less keen to own bond alternatives such as infrastructure trusts. Higher rates also raise the discount rate applied to future cash flows, which lowers asset valuations. And borrowing costs rose.
In the month to 21 August 2023, the AIC Renewable Energy Infrastructure sector fell 4.2%; since 2022 it was down 14% on average in total return terms. By July 2023 the sector’s average discount to NAV was over 20%, according to research firm QuotedData, even though the average NAV return over the previous year was around 6%.
Discounts widened further in 2024. In one case, a London-listed renewables trust’s discount widened from 24% to 34% during the year, and its board described share prices across the sector as still depressed. One fund manager has also pointed to cost-disclosure rules that made trusts look expensive to wealth managers, and to investor outflows.
Other risks include power-price risk (income falls when wholesale prices fall, unless it is contracted), weather risk (low-wind years), policy risk (changes to subsidies and tax) and construction risk for projects still being built.
The UK angle: community shares and greenwashing
Community energy shares carry their own risks. The Financial Conduct Authority (FCA) says it does not regulate withdrawable, non-transferable shares offered by societies. That means investors cannot complain to the Financial Ombudsman Service or claim from the Financial Services Compensation Scheme (FSCS). The FCA also notes that “community shares” is not a legally defined term.
The Community Shares Handbook, published by Co-operatives UK, says buyers could lose some or all of the money they invest. Boards can usually suspend withdrawals, and new societies often suspend them for an initial period, typically three years or more. Any return depends on how the society’s projects perform.
Greenwashing is the other concern. In November 2023 the FCA set out the UK Sustainability Disclosure Requirements (SDR). Its anti-greenwashing rule has applied to all authorised firms since 31 May 2024: sustainability-related claims must be fair, clear and not misleading. There are four voluntary investment labels: Sustainability Focus, Sustainability Improvers, Sustainability Impact and Sustainability Mixed Goals. Labels are optional, but asset managers must follow the naming, marketing and disclosure rules. A labelled fund must ordinarily invest at least 70% of its assets in line with its sustainability objective.
A label or a “green” fund name tells you about the fund’s stated objective and approach. It does not guarantee returns or lower risk.
Frequently asked questions
How much is being invested in clean energy worldwide and in the UK?
The IEA expects about $2.2 trillion of the $3.4 trillion invested in energy worldwide in 2026 to go to grids, storage, low-emissions fuels, nuclear, renewables, efficiency and electrification. In the UK, the government estimates about £40 billion a year is needed between 2025 and 2030 to reach its Clean Power 2030 goal.
How can I invest in renewable energy in the UK?
The main categories are listed renewable energy investment trusts, funds and ETFs holding clean-energy company shares, community energy shares, and sustainability-labelled funds within pensions or ISAs. These are categories, not recommendations, and each carries risk.
Why did renewable energy investment trusts fall when the energy transition was booming?
Interest rates rose sharply from late 2021 to 2023. That made government bonds a more attractive source of income, lowered the value placed on future cash flows and raised borrowing costs. Share prices fell and discounts to NAV widened, even though the underlying assets kept generating.
Are community energy shares safe?
They carry real risk. They are not covered by the FSCS or the Financial Ombudsman Service, withdrawals can be suspended, and you could lose some or all of your money.
What is Great British Energy and can I invest in it?
GBE is a publicly owned clean energy company with an £8.3 billion funding commitment that covers both GBE and GBE-Nuclear. You cannot buy shares in it. Its Local Power Plan includes shared-ownership loans for communities and plans for local people to buy shares in nearby larger projects, but the latter is not yet available.
How do I spot greenwashing in investments?
Check whether a fund uses one of the FCA’s four sustainability labels and read its consumer-facing disclosures, which firms must provide for labelled products and for funds using sustainability terms in their names or marketing. Since 31 May 2024, all authorised firms’ sustainability claims must be fair, clear and not misleading. A label describes a fund’s objective; it does not guarantee performance.
This article is general information, not financial advice. The value of investments can fall as well as rise. Consider speaking to an FCA-authorised financial adviser.