How Sustainable Energy Presents Investment Opportunities
Wall Street has usually been hesitant to embrace socially conscious efforts, especially environmentally-related ones. Good, bad or indifferent, eco-friendly initiatives usually cost money rather than generate it. Recently, however, as more companies work to reduce their negative environmental impact, investors across the risk spectrum are coming on board to buy-in. Here are a few ways environmentalism may pay off in a big way.
Many companies are turning to cleaner energy sources in hopes of reducing their carbon footprint. One of the ways this can be financially lucrative for investors is that oil companies are themselves investing in low carbon mechanisms. Prospects are good that this could be profitable both for them and the companies that manufacture the components/
Also, in the not-too-distant future, the U.S. government will begin issuing what are called 45Q tax credits for industrial carbon capture. This move has already passed with bi-partisan legislation.
There are a few reasons that natural gas is a solid energy investment. First, for better or worse, gas is steadily replacing coal as the dominant driver of the U.S. power grid. This means that while the value of coal is declining, the value of gas is rising.
Gas also is the foundational power supply for the new clean energy methods of the future, namely wind and solar. Gas powers the machines that harvest these resources, making it an indispensable commodity as these technologies advance.
Twenty or thirty years ago, the notion that nuclear energy was a legitimate source of alternative energy would have been shot down because of the disastrous results that have occurred from it not being handled responsibly and safely. While that is still a very real concern, technology is making it seem more and more viable, and therefore more potentially lucrative for investors. If deployed safely, it creates energy with no carbon emission.
Wind, Solar, and Batteries
Tax credits and government subsidies helped kickstart the wind and solar energy revolutions. Now that their infrastructure is in place in many areas, the possibility of very profitable investments in them is quite real. The costs of turbines and solar panels alike have decreased drastically, allowing for a larger system across the country. Batteries and power storage units for emerging technologies are also appealing to environmentally-minded investors as well.
As national and global attitudes towards clean, sustainable, and renewable energy sources become more and more favorable, the machinery, methods, and infrastructure needed to support them all become intriguing investment opportunities.