Why Renewable Energy Investments
In the last few years there has been increasing concern about the rapidly depleting fossil fuel energy resources such as coal, oil and natural gas. Human nature always seeks opportunity in adversity, and the global energy common sense is to have the opportunity to preserve energy capital.
Governments and the energy industry companies are examining the renewable energy technology required for the use of these resources and naturally clean energy resources. These technologies include solar, wind, hydro power, geothermal, fuel cells, biomass, biogas and turbines.
In the United States and several countries, there may be several reasons to consider investing in renewable energy such as solar energy: to help fight global warming, to prepare for peak oil, to improve energy security and local economies, or to capitalize on these trends.
If you buy shares in an alternative energy company, you can take advantage of non-mutually exclusive goals. In fact, an investment can help the planet, make you feel good about your contribution, and benefit from a fantastic growth story that has the potential of making big gains in the future.
Is Clean Energy Demand Just Another Bubble?
Like the dot-com bubble, there is intense speculation, with many no-profit start-ups and certainly established players diversifying to get their piece of cake. The Internet has been growing and changing ever since the bubble burst. And as we now work more carefully in Web 2.0, we must acknowledge that the reasons behind developing renewable energy are much more compelling behind the Internet.
The invaluable lessons learned from the final boom should direct your investment into the future. Unlike the Internet, clean energy company or international energy agency is capital intensive and operates in a heavily regulated sector that is likely to impede rapid expansion due to oil demand.
4 Steps On Where And How To Invest
Given the infancy of this complex industry, it is difficult to know exactly where to focus investment. One can look into several financial instruments namely, energy stocks or exchange traded funds. There are many start-ups that can offer good value for money and many established companies are focusing their attention on this new field.
First, identify new companies involved in renewable energy. Focus on developing countries as these economies will be the driving force in alternative energy development. Classify these companies according to sub-sectors and business strengths and growth opportunities in the near future.
Second, identify established companies that are moving forward or have already started investing in alternative energy markets. Generally this type of investment is less risky because established businesses have a strong foundation and market capitalization to compensate for losses.
Third, identifying companies that are part of the International Carbon Action Partnership or Local Climate Action Partnership. In addition to developing alternative energy technologies, these companies are involved in lobbying governments for global reductions in carbon dioxide, methane, nitrous oxide, sulfur hexafluoride and other emissions.
Fourth, watch for the formation of alternative energy focused mutual funds and energy stocks.. There is not much to choose from at present and relatively high expenditure and price ratios are a deterrent for existing funds. For now, it makes sense that investors would be better off selecting individual stocks on merit and building their portfolio. In addition, investors can negate the impact of speculative fluctuations by focusing on established companies that have already moved into the renewable energy sector.
What Do Some Experts Believe In?
Some experts believe that there is considerable room for active management due to the complexity of these alternative energy technologies and the apparent lack of coverage by industry analysts. The success of an actively managed energy portfolio is likely to be based on understanding the underlying technologies and being practical rather than emotional opportunities when it comes to selecting investment opportunities.
You have to research and study the Paris agreement and it’s relevance to oil and gas futures. That should motivate anyone or industry to invest or start to invest in alternative energy solutions. Investment solutions form part of a long-term financial plan to secure your financial future and a means to achieve your life’s dreams.