Let's face it, green business is huge. Think five years back and it was still something that several companies were skeptical about getting into. Today, it seems to be becoming the norm. People feel that they want to help the environment, and businesses want to help the people. The rising price of oil has only aided the need for alternative and generally cleaner energy.
Either candidate for the Presidency, liberal or conservative, plans some sort of action that encourages reducing our carbon footprint with clean energy. Even if there is a lack of subsidies for clean energy, the fact that oil is pricey and that it will likely continue upward due to basic supply and demand factors means that clean energy is getting more competitive and attractive. These factors are shaping up to make clean energy a great investment in the coming years.
Several funds have emerged with the wave of thinking green. I prefer a couple that have been around for at least a few years. The first, Winslow Green Growth Fund (WGGFX), was started in 2001 and has had the same manager since 2002. Although the expense ratio is a little high at 1.49%, it has shown annualized returns of about 25% over the last five years. Unfortunately, it's not cheap with a minimum investment of $5,000.
A good, more flexible alternative is PowerShares Wilderhill Clean Energy (PBW) ETF. It was started about three years ago. The index that it follows has had five-year annualized gains of over 18%. With an expense ratio of .60% and a minimum investment of only one share, PBW is a great way to invest in clean energy for a small amount of money. PBW is currently trading around $22 a share.
I would also recommend a couple of individual stocks. The first is conglomerate giant, General Electric (GE). GE has been hit incredibly hard recently -- and for good reason. Growth has gone flat and things currently look bleak. GE will, however, inevitably recover and has shown it has good intuition about green growth in the past.
Well known for its Ecomagination marketing campaign, the company has put its money where its mouth is. In 2007, the company's energy efficient and environmentally advantageous products and services brought in over $14 billion in revenue, up 15% from 2006. It continues to make promises, such as reducing its water consumption by 20% by 2012, that are both good for the environment and good for business. GE is a great long term option at around $30.
Evergreen Solar (ESLR) is a unique solar panel company. It has found a production process, called String Ribbon manufacturing, that not only makes a more efficient solar panel, but also make it cheaper for the company to produce.
Evergreen Solar produces wafers, cells, and panels. The company signed its most recent sales contract of $1 billion on May 22nd. It is a good long term investment at $10.
Disclosure: I own GE.
