"One strategy is to find an investment area so certain to grow that it will be around long after market traumas subside. Green investing, which offers the added potential that innovative companies will get snapped up by bigger firms, could be one of those areas," writes Andrew Leckey in today's Los Angeles Times.
"We believe the clean technology trend is unstoppable," said Rafael Coven, managing partner for SF-based Cleantech Group. "There's a need for solutions because of the billions of people still coming onto the planet, the rate at which we're using natural resources, heightened global competition and factors such as drought."
Because of these major drivers pushing for cleaner energy, "It is quite possible," he said, "that in five years, there will be no more pure solar or wind businesses because they'll all have been acquired by larger companies seeking stronger growth." Eric Wesoff, senior analyst for Greentech Media in San Francisco adds, "Big companies such as Wal-Mart stores are putting millions of dollars into solar panels to help control the price of their energy. Companies make these investments because they find it is good business."
So how does an investor make the right investment decision in this space? We believe that instead of relying on speculation or stock prices, that secure investments can be made using collateralized assets including hard assets like solar panels, and soft assets including government rebates and incentives. 30 states and dozens of utilities around the country are offering incentives that are just as bankable as the Federal ITC grant. So there are definitely sound investments to be made in financing clean energy.
The green economy is seeking to level the playing field against entrenched fossil-fuel interests who have decades of market dominance and government support behind them, along with billions of dollars in quarterly revenue. But whether a certain technology has government subsidies or not from year to year is not the primary driver of a clean economy.
In the long run safe, clean, efficient, affordable renewable power will trump dangerous, dirty, depleted fossil fuels. We're in a time of great transition in our energy economy, and there will certainly be winners and loser in the years ahead. But the long-term vision is clear: we're moving inexorably toward a clean energy economy.
And that provides a great roadmap for global investors looking for a bright future.