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Ziad's review
Investment Sector: Recreation Submitted by Ziad 
, President & CEO
at Blackhawk Partners, Inc
8 months ago Tags: green Add Tag |
Think twice before jumping on the 'Green Inve sting' Bandwagon
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Global investment in green energy leapt 60 percent to $148.4 billion last year alone.
A big number, but investment analysts say the sector’s weak spots could slow that rate by 40 percent or more. A lot like the dot-com boom, everything looks good on the upside.
Climate change may be the most important investment megatrend of our lifetimes but it is a fact that it creates a highly dynamic and treacherous investment landscape, and some of today's winners are bound to turn out to be tomorrow's losers
Top government officials also caution that some green projects are destined to go down the tubes, taking investors’ money with them, simply because government itself is unsure on how to proceed.
Subsidies for green energy are still shaky because they remain the province of politicians. For example, neither U.S. nor Spanish legislators have yet renewed wind subsidy programs, and their lack of action has depressed the stocks of some wind energy stocks.
Delays caused by parts shortages brought some windmill and solar cell projects to a screeching temporary halt last year, costing project builders and investors millions.
And biofuels made from new crops, once hailed as great green investments, have recently been shown to cause more environmental damage than they prevent.
The question becomes, how can investors discern a good green investment from a poor one?
One way is to look at who else is buying into them.
I have the same feelings about wind as I had about the best oil field I ever found.
T. Boone Pickens, the legendary oilman, who is now spending $10 billion to build a wind farm in Texas, where enough power to supply power to 1 million homes is already delivered courtesy of wind turbines.
The U.S. is already the world’s second-largest wind power market, one that drew $9 billion of investors’ money last year and in which a recent study projects investment will reach $65 billion by 2015.
Another method is investing only in companies with purchase contracts already in hand.
Solar sector shares tanked recently after some companies doubled or tripled in value last year, causing a number of solar companies to postpone or cancel their initial public offerings.
Yet many new wind farms are already built or the companies building them already have buyers for the electricity they will produce — like Spain’s Abengoa, which is building a 280-megawatt solar plant near Phoenix to generate power that Arizona Public Service has committed to buy.
A third way to reduce chances of losing money is investing in energy efficiency rather than in alternative energy, which many experts say is far more cost-effective than many new technologies.
Too much of the energy debate has focused on simply boosting supplies that are destined to be wasted. Implementing efficiency measures could halve growth in energy demand by 2020 and earn investors double-digit rates of return.
Your thoughts are greatly appreciated.
A big number, but investment analysts say the sector’s weak spots could slow that rate by 40 percent or more. A lot like the dot-com boom, everything looks good on the upside.
Climate change may be the most important investment megatrend of our lifetimes but it is a fact that it creates a highly dynamic and treacherous investment landscape, and some of today's winners are bound to turn out to be tomorrow's losers
Top government officials also caution that some green projects are destined to go down the tubes, taking investors’ money with them, simply because government itself is unsure on how to proceed.
Subsidies for green energy are still shaky because they remain the province of politicians. For example, neither U.S. nor Spanish legislators have yet renewed wind subsidy programs, and their lack of action has depressed the stocks of some wind energy stocks.
Delays caused by parts shortages brought some windmill and solar cell projects to a screeching temporary halt last year, costing project builders and investors millions.
And biofuels made from new crops, once hailed as great green investments, have recently been shown to cause more environmental damage than they prevent.
The question becomes, how can investors discern a good green investment from a poor one?
One way is to look at who else is buying into them.
I have the same feelings about wind as I had about the best oil field I ever found.
T. Boone Pickens, the legendary oilman, who is now spending $10 billion to build a wind farm in Texas, where enough power to supply power to 1 million homes is already delivered courtesy of wind turbines.
The U.S. is already the world’s second-largest wind power market, one that drew $9 billion of investors’ money last year and in which a recent study projects investment will reach $65 billion by 2015.
Another method is investing only in companies with purchase contracts already in hand.
Solar sector shares tanked recently after some companies doubled or tripled in value last year, causing a number of solar companies to postpone or cancel their initial public offerings.
Yet many new wind farms are already built or the companies building them already have buyers for the electricity they will produce — like Spain’s Abengoa, which is building a 280-megawatt solar plant near Phoenix to generate power that Arizona Public Service has committed to buy.
A third way to reduce chances of losing money is investing in energy efficiency rather than in alternative energy, which many experts say is far more cost-effective than many new technologies.
Too much of the energy debate has focused on simply boosting supplies that are destined to be wasted. Implementing efficiency measures could halve growth in energy demand by 2020 and earn investors double-digit rates of return.
Your thoughts are greatly appreciated.
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