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Investments in renewable energy sources may seem a little more predictable then other investments as due to the caps on CO2 emission limits the demand for clean energy is set to grow. Additionally the regulation in several countries guarantees a fixed price for clean energy and forces the distributors to buy such energy making the future income of the renewable energy companies more predictable then income from ordinary energy companies.
The increase in the demand for such energy does not mean that all the companies will benefit nor that a particular fund value will grow.
The hype surrounding the renewable energy in the recent times has surely led to increase in valuation of many investments making their stocks expensive. Therefore before buying a fund one has to check if the stocks in the investment portfolio of the fund are not too expensive and what future growth can be expected e.g. check the average price/earnings ratio of the stocks in the fund and the future plans of the companies. Caution is necessary as many projects in renewable energy have been frozen for many years due to technical problems and protests from the public.
Further, as with any other investment in funds one has to consider the costs the fund charges and the risk of the investment eg. does the fund invest in small or big companies, does it invest in energy generators or in equipment producers etc.

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