I know I’ve said that alternative energy efforts haven’t been very successful recent years, but that doesn’t mean I think the group should be ignored entirely. These efforts aren’t going away any time soon, and they’ll likely create some spectacular investment opportunities for us as we play the next-gen energy space over the long term.
President Trump may not be the biggest fan of alternative energy, but other countries around the globe continue to expand. In fact, Saudi Arabia recently announced it will launch a massive campaign of 30 wind and solar projects by 2023 with investments of up to $50 billion. When the endeavor is complete, it will supply 10% of the Kingdom’s energy capacity.
Japan is also expanding its alternative energy efforts. In 2012, just 0.4% of the country’s energy needs were met by solar means. That number jumped to an amazing 3.4% in 2015, and Japan has a goal for 22%-24% of its energy to come from renewable sources by 2030.
One of the most promising themes in alternative energy right now and a high-growth area for investors is indeed solar. It has had its ups and downs (followed by more ups and downs), but the number of solar panel installations this year is estimated to rise over 88%! And the outlook only gets better from there. A report from the Energy Information Administration indicates continued growth in utility-scale solar power capacity, which is projected to average almost 31 gigawatts (GW) at the end of next year – a 44% increase from 2016. Solar is expected to account for 1.4% of the total U.S. utility-scale generation in 2018, and solar PV-installed capacity should triple its current capacity over the next five years. To put that in perspective, projections show that over 18 GW of solar PV capacity – which is nearly 60% of current capacity – will be installed each year by the end of 2022.
While many of these alternative ideas are still developing, I have a couple of names to share with you that are already making waves. Advanced Energy Industries (AEIS) specializes in power conversion and provides products for solar applications. Ormat Technologies (ORA) is also in the energy power business, with a focus on geothermal energy. ORA owns and operates power stations around the world on several continents, and plans to increase revenue outside of the U.S. to up to 50% from the current 70%. It is also looking to diversify its offerings by increasing revenues from non-geothermal technologies, and has started to attract corporate customers with its ability to reduce energy costs and carbon footprint.
These are the kinds companies I’ll be looking at when searching for opportunity in the next generation of energy – ones that are not only reducing costs, which is beneficial to everyone, but keeping the environment cleaner as well. The alternative energy space is innovating the way the world does things, and I expect it to provide us plenty of investment potential down the road.
Well, there you have it. I hope these articles have showed you that opportunities in energy go beyond Big Oil and Tesla (TSLA). The next-generation trends I see developing now are what will fuel this sector higher over the long term.
The best part is that Wall Street isn’t paying much attention to them yet, so we have the chance to get in before the rest of the herd – that’s what it’s all about.
Thanks for reading!