TRUESHARES

The Renewable Energy Opportunity Amongst America’s Infrastructure

In 2021, the American Society of Civil Engineers gave the United States a C- for its infrastructure1. Since then, bridges have collapsed in Pittsburgh, millions of homes were left without power in Texas, people are still exposed to drinking water delivered through lead pipes, and 19 million Americans1 lack broadband access. Meanwhile, the gigawatts of energy waiting on the grid’s interconnection queue2 exceed the grid’s current total installed capacity.

And our country’s infrastructure has been getting worse. A report3 by the World Economic Forum ranked the U.S. 13th in the world for infrastructure quality in 2019, down from 5th in 2002. The reasons for such declines are numerous and complicated. First, most of the country’s infrastructure was built or updated in the 1960s1 when the population was roughly half of today’s and the demands on our infrastructure from both weather and people were much less severe.

Then there’s the issue of funding. Compared to other advanced economies, the US spends relatively little on infrastructure. China spends 10 times more4 than the US on transportation infrastructure as a percent of GDP. Surprisingly, less than 25%1 of infrastructure spending in the U.S. comes from the federal government, so states and local municipalities are left to manage their failing infrastructure. And while politicians across the aisle manage to agree that infrastructure is important, they fundamentally can’t see eye to eye on how to fund it. 

Despite disagreements, the bipartisan Infrastructure Investment and Jobs Act5 was passed in late 2021 with a budget of $1.2 trillion. A major goal of the Biden administration in the passing of this law is to rebuild America’s infrastructure more sustainably. While $110 billion is earmarked4 for roads and bridges, rail and the power grid will each receive $65 billion and public transit will receive $39 billion. $700 million1 is set aside for hydropower and $8 billion is intended for electric vehicle charging.

The Inflation Reduction Act (IRA) of 2022 stands as a landmark piece of legislation for renewable energy spending in the United States. The IRA allocates roughly $370 billion to clean energy and climate initiatives, making it the most significant federal investment in these areas to date. In regards to investment in infrastructure, the IRA provides funding for grid modernization and transmission upgrades, crucial for integrating increased renewable energy into the electrical grid.

Sustainability and renewable energy are therefore critical components in the country’s pursuit of infrastructural rehabilitation and modernization. The I-81 viaduct in Syracuse3 is being torn down and replaced with a street-level grid and boulevard lined with bike lanes, pedestrian paths, and greenspace. Indianapolis began rolling out its all-electric bus rapid transit system3 in 2019 with plans to increase bus service by 70%. Even before the Infrastructure Investment and Jobs Act, New York City passed the country’s most ambitious climate bill3, mandating that all large buildings reduce their emissions by 40% by 2030, a feat that would be impossible without renewable energy and sustainable design.

As of August of this year4, $280 billion has been provided by the Infrastructure Investment and Jobs Act for more than 7,000 projects across the country. This wave of investment comes on top of state- and city-level initiatives as well as private investment across industries and geographies. Regardless of where the money comes from, it is well understood that infrastructure investment pays for itself. Crumbling infrastructure costs our economy billions of dollars4 every year and a 2022 World Bank analysis4 found that for every public dollar spent on infrastructure, $1.50 is returned to the economy.

Bolstered by the tides of national interest, TrueShares offers an investment fund with market exposure to renewable energy infrastructure companies. Target holdings in the TrueShares Eagle Global Renewable Energy Income ETF (RNWZ) primarily own and operate renewable energy facilities such as wind farms, solar fields, energy storage, and electric transmission assets. With increasing interest from recent infrastructure and climate bills across the country, renewables infrastructure is set to provide long-term capital gains for investors alongside long-term solutions for our country’s ailing infrastructure.

  1. https://www.renewableenergymagazine.com/rose-morrison/why-american-infrastructure-including-the-energy-grid-20230925
  2. https://www.cnbc.com/2023/04/06/outdated-us-energy-grid-tons-of-clean-energy-stuck-waiting-in-line.html
  3. https://www.bloomberg.com/features/2021-infrastructure-across-america/
  4. https://www.cfr.org/backgrounder/state-us-infrastructure
  5. https://www.whitehouse.gov/briefing-room/statements-releases/2021/11/06/fact-sheet-the-bipartisan-infrastructure-deal/