Alternative Energy Investing Dangers
Good News for Alternative Energy Investors
Have electric cars lost their spark?
Has the sun set on solar?
It's not easy being green.
By the look of so many hyperbolic and overused mainstream media headlines these days, you'd likely come to the conclusion that the days of alternative energy integration are over.
Quite frankly, nothing could be further from the truth...
Sure, there are still those who continue to put up the good fight, holding their breath and stomping their feet, insisting that alternative energy can never work on a large scale, or that it “isn't ready for prime time.” And that's OK. I admire their tenacity.
But at the end of the day, it's the data that we must review — not the hot-headed and irrational ramblings of well-paid media slobs who drool all over the truth in their daily diatribes to the few remaining sheep who continue to buy the lie.
Bottom line: The integration of alternative energy into the world's energy mix continues to move at light speed.
And we would all be wise to continue to profit from it.
Solar Comes Back
Although there are still some bumps in the road, clean energy investment saw a 22% increase last quarter, with $53.1 billion ponied up for the industry. And while we are seeing some pullback in Europe, China, South Africa and the United States continue to grow rapidly. In fact, investment in the U.S. in renewable energy and smart grid technologies has soared 155% to $9.5 billion, according to data compiled by Bloomberg.
According to the International Energy Agency, alternative energy (renewables), will surpass natural gas for electricity generation on a global scale by 2016. This will be double nuclear output.
And also worth noting is a recent report published by Navigant Consulting that shows developers will spend nearly $135 billion a year by 2020 on solar. That's a 51% increase over this year's numbers. Much of this growth is expected to come from China, the United States, Chile, South Africa, and Saudi Arabia.
According to Navigant analyst Dexter Gauntlett, by the end of 2020, solar PV is expected to be cost-competitive with retail electricity prices — without subsidies — throughout most of the world.
Now, a handful of solar stocks have come back strong this year. Take a look:
First Solar (NASDAQ: FSLR) – Up more than 40%
SunPower (NASDAQ: SPWR) – Up more than 315%
Canadian Solar (NASDAQ: CSIQ) – Up more than 200%
And one of my favorite solar plays, SolarCity, a solar financing and leasing company, has soared more than 330% since debuting on the NASDAQ last December.
While there's still plenty of risk in the solar sector, I remain bullish on solar installers, leasing companies, and the few companies that are actively producing new and disruptive solar technologies.
Make a Buck in the Energy Game
Of course, I realize not everyone is so bullish on solar. And that's fine. After all, there's more than one way to make a buck in the energy game.
While I continue to profit from the rapid development of alternative energy both here in the United States and abroad, I also have a decent amount of exposure in domestic shale and natural gas infrastructure...
I'm actually extremely optimistic about new infrastructure development, especially after the U.S. House Commerce and Energy Committee approved H.R. 1900, which essentially requires federal agencies to either accept or deny new natural gas pipeline project applications within 12 months. If, after a year, there is no decision... the application would be automatically accepted.
As Rep. Mike Pompeo pointed out, this legislation gives companies looking to invest in gas infrastructure projects some degree of certainty regarding how long a permitting process will take. Right now, it's fairly random and quite inefficient.
But it's what Rep. Joe Barton said that further supported my belief that there's a lot of money to be made in natural gas infrastructure: "Rising demand for natural gas is outpacing the capacity of our aging pipeline infrastructure. The bill would promote investment in pipelines thereby increasing access to affordable and reliable gas."
He's got that right!
And if you're looking to get some more action in domestic natural gas, infrastructure stocks are a great way to go. Some of the more well-known plays include:
Cheniere Energy (NYSE: LNG)
Chevron (NYSE: CVX)
Enbridge (NYSE: EEP)
And of course, our resident oil and gas expert Keith Kohl has a handful of lesser-known, but highly-profitable, infrastructure plays, too. Although in the near term, it looks like his three favorite Bakken stocks are offering the most bang for your buck.
Whether it's solar, shale, or natural gas infrastructure, energy continues to be one of the safest and most profitable places you can be for long-term, sustainable growth. Invest appropriately.
To a new way of life and a new generation of wealth...
Jeff Siegel for Energy and Capital
* Full Disclosure: I currently own shares of SolarCity.
Energy Demand will Increase 58% Over the Next 25 Years
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