Market Decode™: Renewables recharged?
After a breakout year for clean energy investment, are renewables poised to carry that momentum into 2026 — and what trends and risks should investors watch for now?
RENEWABLE ENERGY INVESTMENT hit $2.2 trillion in 20251, representing roughly two‑thirds of all global energy spending and marking a powerful boost in the sector’s momentum. Renewable energy stocks also outperformed broad energy and equity indexes for the year, fueled by gains across power generation, grid infrastructure, and clean tech equipment providers. “The demand for power globally has never been greater — and renewable energy is rising to help meet that demand,” says Anna Potts, investment strategist for the Chief Investment Office (CIO), Merrill and Bank of America Private Bank. Watch the video above for more on what’s behind renewables’ rise.
What are the drivers and risks impacting renewable energy?
“A mix of clearer‑than‑expected policy outcomes, a friendlier rate backdrop and intensifying AI‑driven power demand helped drive the turnaround,” explains Potts. But uncertainty remains, from grid bottlenecks to potential slowdowns in AI infrastructure buildout to upcoming policy decisions that could introduce volatility for U.S. deployment. Still, she notes: “Big picture, rising global power demand is a durable, multi‑year theme — and renewables are positioned as a core, competitive part of that mix.”
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1Source: International Energy Agency (IEA), World Energy Investment 2025
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The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., (“Bank of America”) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S” or “Merrill”), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation (“BofA Corp.”).
