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?
Investment as bright as the sun
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.
The wind of change
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.
Investment on Electric Vehicles
The ways people get from one place to another is constantly evolving. From boats to wheels, vehicles to commute from one place to another is upgrading with time. Between 1951 and 2009, the urban population has increased from 68.3 million to almost 3 billion, and its proportion has increased from 19.5% to 43.7%. This rapid increase in urban population has resulted in unplanned urban development; increase in consumption patterns and higher demands for transport, energy, other infrastructure, thereby leading to pollution problems.
The number of motor vehicles has increased from 0.14 million in 1987 to 64 million in 2004. The percentage of two-wheeled vehicles in the total number of motor vehicles increased from 11% to 68% in 2002. The quantity of gas powered dirt bikes among these motor vehicles amounts to around 34% which causes air pollution. Air pollution is the term used to describe any harmful gases in the air we breathe. The current vehicles that are powered by gasoline pollute, but as technologies improve and the human way of life changes alternatively powered vehicles enter the automotive industry. But now, more people are looking at electric bikes, Electric bikes have been on the verge of breaking through for years now.
Adam Galas suggests buying the two best yields: 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.
The last word
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.