Renewable energy funds Profile of a sustainable investment

15.05.2024 9 Reading Time

klimaVest: Windrad, Solarpanel, Pflanze, Turbine Grafik für erneuerbare Energien Teaser

All the important information about renewable energy funds and what to look out for as an investor.


The most important facts at a glance:

  • Renewable energy funds are thematic funds that invest capital directly (e.g. via direct investment) or indirectly (e.g. through equities) in the production and expansion of renewable energies.
  • Closed-end renewable energy funds often involve long terms and higher investment risks. They usually invest the fund assets in one or a few projects, such as the acquisition of a solar park.
  • Open-end renewable energy funds can be purchased and sold at any time, offering investors more flexibility and a slightly lower investment risk.
  • When renewable energy funds invest in tangible assets directly, they act independently of stock exchanges. As a result, they are free from the risks typical of the stock exchange and offer investors – in combination with the legally regulated feed-in priority – greater value stability.
  • Renewable energy systems depend on certain weather conditions (e.g. sufficient wind) to be able to generate energy. This results in the risk of short-term or longer-term downtimes – and thus also potential lower returns. 

The fact that sustainable investments are now also pioneers on the financial market can be seen in the steadily increasing number of sustainable financial products and solutions. What began as a niche trend is transforming many industries, such as the automotive industry. Investors now have almost unlimited opportunities to invest their money not only profitably, but also sustainably.  

For example: renewable energy funds. Until now, direct investments in renewable energy generation projects have mostly been reserved for an exclusive clientèle with high entry-level amounts. Renewable energy funds, on the other hand, make investing in sustainable climate protection projects accessible to retail investors starting at relatively low amounts. 

Investing in renewable energy not only offers investors the opportunity to invest sustainably – but also to gain access to a future-proof and promising asset class. With the move away from coal and other fossil fuels, renewable energies play a key role in meeting the still increasing demand.  

The importance of renewable energies is correspondingly great for business and politics. And this also increases interest in the financial market: the renewable energy segment now also offers attractive investment opportunities for retail investors – for example in the form of renewable energy funds, which are worth taking a look at in this article.

What types of renewable energy are there?

Renewable energies have a number of advantages: they are clean, available almost without limits and free from harmful substances and greenhouse effects. But what exactly falls under the category of renewable energies? Here you will find an overview of the different types of sustainable energy sources.

Wind: Generating electricity from wind power

Windmills are no longer used as sawmills or oil mills, but have been repurposed for power generation. Wind farms currently make the largest contribution to the production of renewable electricity.

These turbines use the lift produced by the wind, which drives the rotor blades and in this way produces green electricity. Wind farms are categorised either as onshore or offshore wind farms. Onshore wind farms are situated on the mainland, while offshore turbines are installed on the sea and can generate more efficient electricity through significantly stronger wind flows.

Solar: the sun as a supplier of energy

Energy from sunlight is environmentally friendly, free and virtually inexhaustible. Two types of energy can be obtained from sunlight: electricity and heat.  

In theory, the energy of just 90 minutes of solar irradiation on the Earth is sufficient to cover the entire global energy demand for an entire year. However, state-of-the-art technologies can only provide a fraction of this energy as electricity and heat. However, this does not mean that solar energy has no potential – on the contrary – there is a steady increase, especially in German households that obtain energy from solar power plants.

Biomass: from compost to energy supplier

Biomass includes plants, wood, straw, organic waste or liquid manure. What do they have in common? They all store energy that can be released by combustion or fermentation (for biogas). This means that biomass is available around the clock – compared to wind or solar energy, for example, which depends on sunshine and sufficient wind movement for energy production.  

Biomass is therefore particularly flexible and can also reduce energy costs as waste materials from other industries, such as feed and food production, can be used to produce bioenergy.

Water: hydroelectric energy source

Water has also played an important role in energy production for more than a thousand years: even in the times of the Roman Empire and ancient Egypt, the power of flowing water was used to drive grain mills, for example.

Until 2004, hydropower was considered the most important source of renewable energy, but was then replaced by wind power. Nevertheless, it has not lost its importance and is still regarded as a vital source of renewable energy. Hydropower accounts for almost half of the global capacity for generating electricity from renewable sources.¹

The development of renewable energy sources in Germany

Until the turn of the last millennium, electricity generation from renewable energy was considered niche. Only hydropower showed a steady value, but other power generation methods had not yet become established. Shortly thereafter, an almost exponential increase in the development of technologies for sustainable energy generation started.

Between 2015 and 2020 alone, the share of renewable energies in the German electricity mix increased from 29% to 45%. Onshore wind farms in particular have accounted for a solid 41% in electricity generation from renewable energy sources.

Electricity generation from renewable energies² in Germany 2000 – 2021

klimaVest: Windrad, Solarpanel, Pflanze, Turbine Grafik für erneuerbare Energien Teaser

The electricity mix in Germany 2015 vs. 2021⁵

With 251 billion kilowatt-hours, renewable energies contributed around 56% to German gross electricity generation in 2025. Wind power, biomass and photovoltaics are the three most productive energy sources. Overall, the share of renewable energies in gross electricity consumption was around 52%. 

Renewable energies: Sustainable investment or just hype?

Current developments in modern energy generation are proof of this: Investments in renewable energies have long since ceased to be an ephemeral trend. This is because renewable energies are no longer just being used by small companies, but have now entered the mainstream and are therefore also on the radar of large corporations. Such developments are supported and fuelled by political decisions such as the 2015 Paris Agreement or the topicality of climate change and clean energy in the current federal election campaigns.

One thing is clear: it is impossible to imagine our economy without renewable energies. The more we move away from fossil fuels and conventional energy sources, the more we are dependent on renewable energies to cover our growing energy needs. The financial market is now also aware of this - and more and more investors are recognising the long-term potential of investments in renewable energies: German investors have already invested over 360 billion euros in sustainable investment funds and thus in the energy supply of the future.

Renewable energy funds: what types are there?

Renewable energy funds belong to the category of sustainable thematic funds. Investing money in these funds, will support projects within specific thematic areas, such as cleaning up the oceans or the reforestation of forests – or even the use of renewable energies.   

In principle, renewable energy funds can be divided into open-end and closed-end, or mutual, funds:

Closed-end renewable energy funds

A closed-end fund sells a capped number of units to a small group of investors within a specified period of time before it is closed to further investment. These funds usually finance one or a few projects. For example, if it is a closed-end solar fund, investors’ fund assets flow into a specific solar park. 

While such investments offer high potential returns, they also involve high risks: as sustainable energy generation projects depend on specific environmental factors such as sufficient sunshine or wind, natural disasters or location-related miscalculations can cause losses.  

In addition, the capital in closed-end funds is usually tied up longer, so that investors can expect long maturities of 10 to 30 years. As the number of investors is limited, quite high minimum contributions are required, ranging from around 5,000 euros to six-digit amounts. Renewable energy funds are usually closed-end investments.

Renewable energy open-end funds

In contrast to closed-end funds, units in open-end renewable energy funds are issued via the responsible fund company. These units can be purchased at any time and without limitation. In the event of a sale, these companies redeem the units at the redemption price. In addition, open-end funds are often traded on the stock market. This means that investors also have the opportunity to participate in the fund via shares listed on the stock exchange. The purchase and sale of units in open-end funds is therefore easier and more flexible than in closed-end funds.

Renewable energy funds usually invest in a large number of projects at the same time, covering different regions and energy production methods. As a result, funds such as these have a higher degree of diversification, which contributes to broader risk diversification.

Currently, only a few open-end renewable energy funds are available on the financial market; one such open-end fund is the klimaVest from Commerz Real. klimaVest invests the fund’s assets in more than 25 wind farms and solar parks, spread across three countries. So with just one investment, investors can invest in a variety of assets at the same time.

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Invest in the full potential of unlimited resources - with klimaVest, the fund for renewable energy. 

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The most common types of renewable energy funds

The different types and production methods of renewable energy are also associated with different opportunities to invest in renewable energy.

Find out what types of renewable energy funds there are and how they differ here:

Climate funds

A special feature among renewable energy funds is the climate fund. While this term is not protected, it typically includes funds that include a mix of multiple renewable assets in their portfolio. For example, a climate fund invests in various individual solar, wind and bioenergy plants all at once.

Thematic funds

Many other thematic renewable energy funds specialise in a specific form of energy generation. These are, for example, solar funds, water funds, bioenergy funds or funds with investments in wind power. All of these types of energy generation work via plants that can be built, operated and maintained with accumulated fund assets.

Depending on the type of fund, investors invest in one or more such plants. The green electricity they generate is then fed into the electricity grid and purchased by various electricity suppliers. The resulting profits of these plants ultimately also give rise to returns that are paid out to investors.


Crowdinvesting is also becoming increasingly popular as a form of investment. Here, a combination of several investors – the “crowd” - finances a specific investment project, such as sustainable start-ups, energy-efficient real estate or renewable energy generation through solar parks or wind farms, for example.  

Crowdinvesting projects differ from traditional closed-end funds mainly in that they are made accessible to a wide range of retail investors. Investors can participate in these projects with comparatively low entry amounts from €100 or €500. 

Nevertheless, crowdinvesting projects also pose considerable risks, as – unlike open-end renewable energy funds – only one or a few projects are usually invested in here. Similar to closed-end funds, crowdinvesting also carries an increased risk of a total loss of the investment amount.

Impact fund

The funds and investment projects listed here make important contributions to environmental protection with their investments in sustainable energy generation, but these are not always visible or comprehensible to investors.  

Impact funds set a new standard here. These funds are characterised by the fact that they set themselves specific sustainability goals, which are made transparent with measurable units. This allows investors to track the specific contribution their investment makes to climate change mitigation. 

Other types of renewable energy funds

Renewable energy funds are not the only way to invest in renewable energies per se. Investors also have the opportunity to participate indirectly in sustainable energy generation. For example, they may invest in equity funds that have sustainable companies focusing on renewable energies in their custody account.

Other options are bonds or renewable energy ETFs that promote sustainable energy production. In ETFs, investors benefit from the fact that the total expense ratio (TER), i.e. the fund’s total costs, is typically lower as they are not actively managed.  

However, investors should be cautious about such funds, because actual sustainability is not guaranteed in these investment opportunities. Particularly in the case of widely diversified funds such as equity funds or ETFs, companies that have been selected as sustainable investments using a best-in-class approach, for example, repeatedly end up in the portfolio.

But that doesn't mean much, because these can be companies in the fossil fuel industry, for example, which are only considered sustainable in comparison with their competitors. Attaching particular importance to the sustainability of the investments entails making significant compromises on products that are more widely diversified. 

How does diversification work in a renewable energy fund?

Diversification is essential for successful and long-term fund management. Using the example of the Renewable Energy Fund klimaVest, you will learn how diversification works in practice:

Since its introduction to the market in 2020, klimaVest has experienced a steady positive performance and has continuously expanded its fund portfolio. Currently, a total of 43 wind and solar power plants in five European countries are part of the klimaVest Fund portfolio.

With wind and solar parks from the north of Finland to the south of Spain, klimaVest is widely diversified both geographically and in terms of the technologies utilized. The fund leverages the respective weather conditions to ensure maximum stability.

So, for example, while solar irradiation is exceptionally high in Spain, particularly high wind speeds are reached in the flat landscapes of Scandinavia. Here, regional and technological diversification complement each other to achieve a wide spread with maximum yields.

In addition, klimaVest achieves additional diversification by expanding into regions like Scandinavia, where primarily wind power plants are built, but also develops alternative technologies such as solar power. Here, while the yields may be lower than, for example, in Spain, the land prices are also more favorable, as the expansion of renewable energies in Scandinavia is actively supported and subsidized politically.

klimaVest promotes the expansion of various established technologies within specific regions, ensuring that any fluctuations in electricity production can be even more efficiently absorbed and balanced. This also enhances planning security for investors and the long-term stability of klimaVest as an investment.

How sustainable are renewable energy funds?

Sustainability is not a protected term, so neither investors nor providers need to follow a common definition. For many, sustainability means the same as protecting the climate, while others already place far higher demands on the concept of sustainability. 

That is why, in the 1987 Brundtland Report, the United Nations defined sustainable development as one that meets the needs of today’s generation without jeopardising the needs of future generations. In addition to pure climate and environmental protection, this also includes human rights, good working conditions and fair corporate governance.  

The ESG criteria, which have now become the standard of sustainable economic activity in the financial sector, therefore include not only environmental, but also social and governance criteria.  

Therefore, if renewable energy funds are to be assessed for their environmental sustainability, the focus is on the E in ESG, i.e. with an emphasis on environmental factors. 

The sustainability of a renewable energy fund can also be assessed by looking at its measurability and goals, because the production of electricity or heat can be measured fairly accurately. However, fund providers often do not set specific goals for how much electricity is to be generated or how much pollutant is to be saved. As a result, there is also a lack of communication to investors who do not have a precise overview of the actual impact of their investment. 

Impact funds therefore offer a good opportunity for sustainable investment as they measure, document and communicate their impact on the real economy.

Opportunities and risks of renewable energy funds: good for the world or just good for your conscience?

Sustainable investments may be good for your conscience, but how do they affect your wallet and your potential returns? Find out the main advantages and disadvantages of renewable energy funds that can help you make your investment decision here.

The opportunities of renewable energy funds

perhaps one of the biggest benefits of renewable energy funds: with the long-term promotion of renewable energies, they offer an answer to the rising demand for electricity.

With the decision to phase out coal and nuclear power, the share of renewable energies, which will be responsible for a large proportion of electricity generation and supply in the future, is set to be 65% by 2030. On the one hand, the economy is becoming less dependant on expensive oil imports or fuel generators and, at the same time, is promoting the expansion of a long-term, sustainable and therefore also promising energy supply.  

Investing capital in sustainable power generation also supports the development and operation of green tangible assets. As an investor in a closed-end fund, you invest in a company and are therefore one of the owners of solar parks or wind farms, for example. This means that you make a direct positive impact on the real economy.  

The expansion of systems for sustainable power generation is also supported by law. With its feed-in priority, the German Renewable Energies Act (EEG) ensures that electricity from renewable energies is fed into the electricity grid and consumed on a preferred basis. To this end, electricity grid operators are obliged to give priority to feeding electricity from renewable energy plants into their grid.

The more renewable electricity is produced, the less electricity from fossil fuels flows into the electricity grid. This secures the price of electricity, saves CO2 and promotes sustainable power generation.  

In addition, tangible asset funds such as renewable energy funds often have the decisive advantage of being independent of the stock market – and therefore suffer significantly less from market fluctuations, inflation or exchange rate risks compared to conventional securities investments. Investments in tangible assets in the form of open-end funds are therefore more stable and generally offer a good and solid basis for a diversified portfolio.  

However, renewable energy funds also have some drawbacks that potential investors should be aware of:

The risks of renewable energy funds

As already mentioned, investments in sustainable energy production are exposed to special weather conditions and therefore also to specific risks: this is because as soon as the solar irradiation is lower than calculated or natural disasters such as flooding or storms occur, these investments and their investors face particularly high losses.  

In addition, the specific risks of closed-end funds are also brought to bear here. This is because co-owners of such plants not only participate in the potential returns, but also in the risks of the investment, which could extend to a total loss of the assets. For example, unforeseen repairs, disruptions to technical processes or supply bottlenecks can lead to operational downtimes or loss of yield for the energy generation plants. This also puts investors’ capital at risk.  

The long capital tie-ups of closed-ended funds are also disadvantageous for many investors. Although it is possible to sell your units on the secondary market to a so-called substitute investor, such transactions are usually associated with high losses.

Renewable energy funds: a sustainable investment with risks worth knowing about

It’s clear: the future and the well-being of our planet depends on the use of renewable energy. These trends are reflected in the form of a fast-growing sector that offers investors numerous good potential returns while making a positive contribution to the environment and the real economy.  

However, investors in the area of closed-end renewable energy funds in particular are faced with risks that should not be underestimated. It is therefore important to reflect on your own risk appetite before making an investment decision.  

In addition to direct investments, indirect investments such as ETFs or equity funds may also be considered. In these funds, the actual sustainability of the investment is forced to take a back seat again. The reason for this is that you have to invest a lot of time and energy to check whether an ETF is truly sustainable.  

So, if you want to invest sustainably, but don't want to take too much risk for it, you should take a closer look at open-end funds for renewable energy. Compared to closed-end funds, an investment here is significantly more investor-friendly and lower risk.

How can I invest in renewable energy?

A variety of opportunities are available for investing in renewable energy. For example, thematic funds, closed-end direct investments, open-end impact funds or indirect investments through equity funds or ETFs are possible.

Why invest in renewable energy?

Investing in renewable energies drives forward sustainable change in our real economy and promotes the generation of green electricity. They also offer a solid and profitable addition to your portfolio.

How much is Germany investing in renewable energy?

German investors have invested around 360 billion euros in sustainable investments to date. In 2020, around 11 billion euros were invested in renewable energy plants.

Is it possible to invest in electricity?

You can invest your money in electricity by investing, for example, in the construction and operation of sustainable energy generation plants. This can be achieved, for example, through direct investments, thematic fund investments or equities.

What is the best renewable energy?

Wind power has been the most important energy source for sustainable power generation in Germany since 2004. Around 49%⁷ came from wind turbines in 2021, and around 20% from photovoltaic systems.

Approximately 31% of the total electricity generation in 2023 was produced by wind turbines, and around 12% by photovoltaic systems.

Which companies are benefiting from the energy transition?

Companies that offer sustainable solutions in the long-term benefit in particular from the trend towards sustainability. These include, for example, technologies for operating energy generation plants or manufacturers of solar systems for private households.

What percentage of renewable energy was produced in Germany in 2019?

In 2019, 42% of Germany’s gross electricity consumption was attributable to renewable energies. In 2023, this figure reached 50.6 %. In 2000, renewable energies only accounted for 6% of German electricity generation.⁸