Alternative energy industry has been developing very fast. Wind and solar energy have the biggest part of contribution in the change of the world’s energy order. As this area of industry is gaining more power and importance and is continuously developing, investors may see it as a huge opportunity for profits. Unfortunately, the last 10 years showed that investing in alternative energy is not so obviously a gold mine. Bad experiences have burst investors’ bubble and justifiably, made them more skeptical and prudent in investing decisions. For those who need some help in deciding, we present suggestions made by three analysts: Travis Hoium, Jason Hall and Adam Galas. Where should we look for the satisfying return?
Travis Hoium focuses on the solar energy. He believes that it has the power to bring the total change of world’s energy use, since it is cheaper than fossil fuels and easily available for everyone. He emphasizes its huge value and great potential. It has not been easy to make money on sun power – bankruptcies of solar companies are quite common, and the risk is really repelling. Luckily, the dark solar energy period is coming to an end. Nowadays, solar industry is entering a phase of consolidation. The industry is becoming safer and more stable. The main players finally emerged from the time of competition between companies. This ends the phase of tests and trials and brings some stability and continuous growth. Hoium mentions First Solar and SunPower as the companies which are worth the investors’ attention in the first place.
Jason Hall proposes turning to wind power. This kind of alternative energy investments has not been popular. The giants such as General Electric or Siemens seem to have dominated the manufacturing area of the industry and there are no utility investments in wind power on offer. However, Hall suggests taking a good look at Vestas Wind Systems – a company producing wind turbines. As he observes, the company has recently recovered from previous slight fall and now their situation is very promising.
Adam Galas suggests buying the two best yieldcos: 8point3 Energy Partners and Brookfield Renewable Energy Partners. The first one is sponsored by the two leader companies in the solar energy industry (First Solar and SunPower). This option is very likely to generate satisfying profits. Investors receive money from the yieldco which earns it from projects realized by First Solar and SunPower. The contracts for the projects are long-term and fixed-price, thus, the risk of loss is lower. When it comes to Brookfield Renewable Energy Partners, Galas believes that this investment in hydroelectric and wind is highly beneficial. It may bring 12-15% of return per year to investors. Contracts providing 92% of their money, are adjusted to inflation, fees are fixed and the average life of them is 17 years, which makes this option of investment recommendable.
Alternative energy industry is the promising ground for investors. However, the level of risk still remains very high. That is why, investors need to know how to invest right. Generally, to decrease the risk look for the strong and settled leaders among the companies and focus on them.