- Growing numbers of prosumers – customers who produce and consume electricity – demonstrate the potential for decentralised energy resources
- Tesla’s move to become the largest global distributed energy company underlines the sector’s power, iClima Earth says
- Its Smart Energy ETF includes companies optimising revenue opportunities from solar panels, electric vehicles, and stationary batteries
- iClima Earth’s companies to watch for 2022 include Nuvve, Proterra, EVgo, Chargepoint, Blink, Sunrun and Stem
22nd December 2021, London
The rise of prosumers – customers who produce and consume electricity - is powering new opportunities for investors in the smart energy sector, says environmental impact fintech, iClima Earth.
Its iClima Smart Energy UCITS ETF (Ticker: DGEN), which changed its name last month from the iClima Distributed Renewable Energy UCITS ETF to reflect this trend, says the potential for companies in the smart energy sector is comparable to firms such as Uber, Lyft, and Airbnb.
Companies in iClima Smart Energy, which is distributed on the HANetf platform, will, it believes, have a similar disruptive impact for solar panels, electric vehicles, and stationary batteries, while its index also includes Tesla which is set to become the largest global distributed energy company covering both behind the meter and in front of the meter solutions and from hardware to software.
A recent Tesla deal included a partnership with Brookfield Asset Management to develop a neighbourhood in Austin, Texas, where all houses have Tesla solar roof tiles and powerwall battery storage.  Tesla will operate as an aggregator of these distributed assets, effectively acting as an energy provider in Texas, using the power from the development.
V2G or Vehicles to Grid aims to tap into battery storage in vehicles and use electric vehicles to supply energy. iClima Smart Energy incudes the only pure-play V2G company Nuvve in its index and Proterra which offers turnkey solutions so that a lot of high margin software-based services wrap the commercial bidirectional electric vehicles and high-power charging systems.
Electric vehicles charging network and Vehicle Grid Integration will be key areas for 2022, iClima Earth predicts, and EVgo, Chargepoint and Blink are US firms in the space and part of its benchmark. 
Virtual Power Plants – VPPs – should also perform strongly in 2022 with companies such as Sunrun which enables the owners of solar rooftops and battery systems to monetise their assets and make money selling the cleanest energy available to the grid.
Long duration energy storage or LDES which enables energy to be stored for more than four hours will also benefit, according to iClima Earth, with companies such as Stem, which provides software using artificial intelligence to optimise energy use, and Bloom Energy, which designs micro grids based on fuel cells, also listed in in its index.
Gabriela Herculano, CEO of iClima Earth said: “Uber, Lyft and Airbnb created entirely new revenue opportunities for people who owned cars and properties and in a short period of time disrupted large industries.
“There is a parallel from these companies to companies we are very excited about in the smart energy sector that are optimising other existing assets for the asset owners namely solar panels, electric vehicles and stationary batteries.
“Distributed energy resources can benefit prosumers and the economy and that is why we believe adoption of decentralised solutions will be fast.”
iClima Smart Energy, which has a TER of 0.69%, tracks the iClima Distributed Renewable Energy Index TR, which provides exposure to 50 companies in seven segments directly related to the growing Distributed Generation (“DER”) business model. Over the past 12 months, the Index has grown by 102.66% and 13.22% since inception.  Past performance is no guarantee of future performance. When you trade ETFs, your capital is at risk.
“When we first created the index, we believed that Distributed Renewable Energy best explained the companies involved in decentralised behind the meter renewable based activities. However, it is now clear that Smart Energy is the best way to explain the sector and we believe the new fund name better captures what the fund is designed to do. DGEN, offers investors the opportunity to invest in companies at the forefront of the huge and rapidly growing distributed generation renewable energy market. It shines a spotlight on the relevant companies enabling electricity generation and storage using renewable energy sources in a local, decentralised, and modular way. Flexible technologies in distributed renewable generation collect energy from many sources, lowering environmental impact and increasing security of supply,” Gabriela Herculano added.
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