Skyrocketing oil prices have caused a realization that increased energy generation from alternative sources is probably a smart idea. Now the horrific events in Japan, which could be on the brink of nuclear disaster, have made the entire world aware of the dangers of nuclear power.
Amid this backdrop of energy-related events comes a new, very positive report by research firm Clean Edge, titled Clean Energy Trends 2011.
This year’s report represents a full decade of Clean Edge data and trend analysis, and that’s important, as it gives us a better sense of perspective on just how far the alternative energy sector has come in that time. According to the report, “clean tech has proven to be a significant business opportunity, and its growth rates now rival that of earlier technology revolutions like telephony, computers, and the Internet.” That’s a bold claim, but the research does make a good case for that assertion.
According to Clean Edge, the global market for solar photovoltaics (PV) has surged from $2.5 billion in 2000 to $71.2 billion in 2010. That’s a compound annual growth rate of 39.8%. Solar stocks have certainly had their ups and downs over the past decade, but if Monday’s trade is any harbinger of things to come, then the future for solar certainly could likely be very bright.
Most solar names surged on Monday, and continued to move higher on Tuesday. The Market Vectors Solar Energy (NYSE:KWT) exchange-traded fund was up another 3.4% on Tuesday. This ETF contains top industry names such as First Solar (NASDAQ:FSLR), MEMC Electronic Materials (NYSE:WFR) and Trina Solar (NYSE:TSL), all of which jumped Monday and continued higher on Tuesday.
There’s been a similar expansion in the global market for wind power over the past decade. The industry was worth just $4.5 billion in 2000, and now in 2010 Clean Edge pegs the industry worth at $60.5 billion. That’s a compound annual growth rate of 29.7%. That’s great news for a pure play wind company such as Zoltek (NASDAQ:ZOLT), but also for big wind players such as ABB (NYSE:ABB).
According to Clean Edge, other clean tech sectors such as hybrid electric vehicles, green buildings, and smart grid, also have experienced similarly spectacular growth rates over the past decade. As for the next decade, growth is expected to be just as robust.
The report says global production and wholesale pricing of ethanol and biodiesel reached $56.4 billion in 2010, and is projected to grow to $112.8 billion by 2020. Wind is projected to expand from $60.5 billion in 2010 to $122.9 billion in 2020, while solar photovoltaics (including modules, system components, and installation) are projected to grow from a $71.2 billion industry in 2010 to $113.6 billion by 2020.
Here’s the real money quote from the Clean Edge report: “Together, we project these three benchmark technologies, which totaled $139.1 billion in 2009 and grew 35.2 percent to $188.1 billion in 2010, to grow to $349.2 billion in the next decade.”
That’s the kind of growth longer-term investors dream of, and with all eyes currently trained on the sector, now is a great time to get your clean energy buy list together.
As of this writing, Jim Woods did not own a position in any of the stocks or funds named here.
