The World Gets Hotter — and So Does This Sector

Yikes, it’s hot.

An image of the outline of a battery reflecting a blue sky with light clouds.

Source: petrmalinak/ShutterStock.com

Maybe not presently, where it’s 23 degrees at InvestorPlace‘s home office in Baltimore, or at my homestead, where it’s 55. But in general, the last seven years have been the hottest on record, with 2021 taking fifth place.

Even in Death Valley, temperatures reached a record-breaking 135 degrees last July! A decade ago, the highest temperature recorded was 128 degrees.

According to Climate.gov, the earth’s temperature has increased by 0.14 degrees Fahrenheit every 10 years since 1880. The culprits? Hint: They walk around on two legs and like to burn a lot of fossil fuels.

“Global warming” is not a rock-solid fact, of course. It is more like a foundational scientific theory — like Newton’s Law of Gravity or Mendel’s Law of Hereditary Genetics. Whatever the exact causes may be, the mercury is rising around the world.

And even though it’s long past the opportunity to try to “turn back the clock” on the climate crisis, humans can do something to reduce the effects thereof in the future.

Unfortunately, the transition to “green” technologies isn’t as green as we might like it to be. Many “sustainable” ones aren’t as environmentally friendly as advertised.

This inconvenient truth hasn’t attracted widespread attention yet — but it will. And this truth will matter in ways that produce significant commercial impacts in the renewable energy marketplace… and significant opportunities for investors.

So, today, let’s place so-called green energy under a microscope.

Dirty Clean Energy

When it comes to being green, most of us focus on the finished product without paying much attention to the non-green processes that delivered that product to our door… or to the non-green aspects of using that product day-to-day… or to the non-green aspects of that product’s end-of-use disposal.

But any honest evaluation of environmental impacts must include every facet of a product’s life cycle — from the pre-production phase to the disposal phase.

For example, on any environmental scorecard, both solar and wind energy would rank higher than coal-fired power. But at the same time, neither of these renewable technologies can boast an unblemished environmental profile.

On the plus side, solar panels generate a lot more energy over their lifetimes than the amount of energy used to manufacture them. In general, solar panels achieve this environmental breakeven point (EPBT) in less than two years.

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Wind turbines score even better on this metric — breaking even in less than one year.

Despite the positives, however, solar power can cause serious environmental negatives. Disposing of old panels is probably the biggest one.

In theory, 96% of solar photovoltaic (PV) materials could be recycled and reused in new solar panels. But in reality, 0% of solar PV materials can be recycled profitably.

By most estimates, every dollar spent recycling a PV solar panel yields about 10 cents worth of recovered metal and glass. These poor economics explain why most U.S. solar panels end up in landfills.

This poses serious environmental risks because of the toxic chemicals the panels contain. After a solar panel spends just a few months in a landfill, the toxic lead and cadmium it contains can leach into the soil and groundwater.

Obviously, that’s not an ideal outcome.

Wind turbines produce a similar environmental blight. Most of them end up in a landfill.

So, clearly, disposing of either wind turbines or solar panels is a significant problem. That said, neither one produces an ounce of carbon emissions while operating, which is reason enough to boost their efficiency by combining them with energy storage capability.

The more that wind and solar installations can store their power for later use, the more efficient they become… and the smaller their “whole life” environmental impact per unit of energy produced.

However, not all energy storage technologies are equally green.

Lithium-ion batteries, for example, produce a range of environmental negatives.

  • They require metals that come from energy-intensive and sometimes dirty mining operations.
  • Like an EV, a lithium-ion battery is only as green as the power grid that charges it. So wherever coal-fired power dominates the grid, these batteries are not particularly green.
  • Lithium-ion batteries are not easy to recycle.

On average, every dollar spent to recycle a lithium-ion battery yields only about 33 cents worth of reclaimed metal. Because of this “bad math,” about 95% of all lithium-ion batteries end up in landfills.

A chart showing the projected volume of e-waste from 2019 to 2030.

By contrast, one competing energy storage technology does lend itself to economic recycling.

That technology is called a vanadium redox flow battery (VFRB).

Unlike solid-state lithium-ion batteries, VFRBs are basically water tanks that contain a vanadium electrolyte solution of differing oxidation states. A proton exchange membrane separates the two tanks.

Electrolytes from the tanks flow through a fuel-cell stack, where an ion exchange occurs across a membrane. When this exchange occurs, a reversible electrochemical reaction takes place, allowing electrical energy to be stored and subsequently returned.

Because of their size and weight, VFRBs are not suitable for EVs. But for energy storage applications, they offer a compelling alternative to lithium-ion batteries… especially when one considers their environmental superiority.

Although VFRBs remain relatively unknown, they are attracting a growing worldwide demand. (I have a vanadium play in my Fry’s Investment Report research service; click here for details on how to access it.)

Now, green energy is linked to something I’ve come to call the “Technochasm” — the growing divide between two sides of America, charged by the ever-increasing speed, power, and progress of technology.

On either side of the Technochasm lie those who can build more wealth than they ever dreamed… and those who will inevitably fall further and further behind.

Helping you find yourself on the right side of the Technochasm is a big part of what I do in my investment services, Fry’s Investment Report and The Speculator. Check them out if you’d like to see how we’re preparing for the exciting year to come.

Regards,

Eric Fry

P.S. 56 new billionaires were created in the U.S. in 2020, during one of the worst economic downturns we’ve ever seen. And I’ve uncovered how the wealthy elite continue to grow their income while others live paycheck to paycheck. I share my findings through a video recorded in one of the richest zip codes in the country. Click here to learn more.

On the date of publication, Eric Fry did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Eric Fry is an award-winning stock picker with numerous “10-bagger” calls — in good markets AND bad. How? By finding potent global megatrends… before they take off. In fact, Eric has recommended 41 different 1,000%+ stock market winners in his career. Plus, he beat 650 of the world’s most famous investors (including Bill Ackman and David Einhorn) in a contest. And today he’s revealing his next potential 1,000% winner for free, right here.


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