Investing in Clean energy, either through green stocks, green funds, setting up your own business, investing in your own energy system, or education is perhaps the best investment decision that you can make at the moment. Although we are by no means investment advisors some straight forward Mr. Spock like thinking got us there.
The upside potential of this sector is enormous. If you define the potential market for these products as the same that are now using fossil fuels we are talking about a $3.5 trillion a year market. A market where even the smallest crumb will set you off to a South Pacific retirement.
That these renewable energy sources are going to replace the old conventional forms is beyond doubt. The reserves we have, the production capabilities, and the exponentional growing demand for energy from ourselves and the emerging economies is already fuelling a very painful supply and demand system.
The US is totally depended on a resource of which it needs almost three times as much as it can produce. And the energy needs of the emerging economies are growing at such a pace that it will not take as long as we first thought that most of the easily accessible wells are going to dry up. As a result prices will increase even further.
With our Fossil Fuel addiction we have placed ourselves and our economy at the mercy of powers beyond our control.
Meanwhile the renewable energy industry is showing double digit growth rates. According to the International Energy Agency (http://www.iec.org) and (http://www.eia.doe.gov) this tempo is really impressive.
A Quick Breakdown of the Annual Growth in this sector
Solar Energy 17%
Tidal Energy 13.2%
Wind Energy 11.7%
Geothermal Energy 4.7%
These are annual growth rates and therefore compound rates, meaning that they build on each other like interest on money or debt.
At first glace you might think that an expansion like this is not sustainable in the long run. If so I challenge you to think again. Let's do some math.
At the moment about 82% of our energy comes in the form of fossil fuels, about 6% from clean energy forms, and the rest is generated through nuclear reactors. When we take the increasing energy demand into account these figures mean that by 2030 about 10 - 15% of our total energy needs are met by renewable energy sources.
The Sales Volume of the Sector at Present
An estimate about the present size of the alternative energy sector is difficult to give. The rapport Clean Energy 2007 for the Clean Edge program (http://www.cleanedge.com) estimates the total worldwide sales at about $55 billion for 2006.
This is a sharp increase from the 40 billion of 2005. Projecting CleanEdge growth expectancy of 15.1% annually to the coming 10 year period means going from $55.1 billion to $226 billion in 2016.
That fact that a lot of venture capitalists are turning to the solar-power business, does mean that these people with very keen noses on where money is going to be made makes the case for investing in clean energy even stronger.
The world has always known periods of change that have proven enormous opportunities to those who were willing to look beyond the old know strategies and a death trap to those who didn't. A thriving vinyl record or type writer company from the 1970''s turned into a worthless collection of machinery in the 80 ties.
An unknown company hardy worth investing in turned within a decade into the world largest software producer. And a few guys that were dissatisfied with search engine technology changed that whole playing field within a few years. And a decade ago nobody had ever heart the name Google. Meaning, even if we don't think about it as obvious it doesn't mean it won't happen
Ross has a vested interest in all the
developments in the alternative energy sector. He writes about clean energy and
clean energy investments since 2003 and can be found at
http://www.alternative-energy-guide.com/
