Growth in Alternative Energy
Mar. 19, 2011 11:58 AM ETPBW
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Long Only, ETF investing, Energy
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Harris Roen is a financial writer with a passion for understanding the economic activity of our interconnected world. His previous experience of over 15 years as a professional portfolio manager helps him ground-truth the hype through independent research and analysis, providing valuable information for readers.
Mr. Roen filters through numerous economic mainstream and specialty media reports, looking for clear, dependable information. Key economic data such as interest rates, investor sentiment, earnings and debt are constantly monitored to discern vital long-term market trends.
Independent thinking is used to distill data into trends that can be turned into actionable strategies. Individual companies and mutual funds are examined in detail to see who rises to the top regarding present quality and, more importantly, positive future prospects. The Roen Financial Report has a specific focus in the energy arena, where high-quality companies that are building a future less dependent on coal and foreign oil are sought out.
The goal at the Roen Financial Report is to present expert content in a useful, affordable newsletter. The publication strives to make recommendations solely on clear, deliberate strategies in an understandable, helpful manner.
The painful disaster at the Fukushima Daiichi nuclear reactor complex is gut wrenching to watch. My heart goes out to all the victims and their families of this unfolding disaster.
I have never been a fan of nuclear energy as a low-carbon electricity source or otherwise. I seek no blame or derision, however, to the people handling this disaster - their efforts have been nothing short of heroic. The plant was designed with extreme natural disasters in mind, but simply not for an earthquake and/or tsunami of the magnitude that hit Japan last week.
I in no way want to capitalize on this human and environmental tragedy, but one has to ask the question of how this event may affect alternative energy investments.
Indeed, in the short-term has alternative energy stocks have been up since March 11. Two widely watched clean energy indices both posted gains as of yesterday’s close: the Ardour Global Index (AGIGL) was up 4.9%, and the WilderHill New Energy Global Index (NEX) climbed 12.5%. By comparison, the S&P 500 dropped 2.3%. Though short-term trends can be interesting, I find the longer-term data much more compelling.
The chart above shows two measures of growth in alternative energy since 2006. The dark blue bar shows growth in photovoltaic installations in the U.S., as reported by Greentech Media. The light blue bars are figures published by Cleantech Group, showing growth in venture capital that has poured into alternative energy companies. This only lists investments for the first 3 quarters of 2010, so when the data gets updated growth will be even higher.
It is important to note that this chart shows growth. This means that venture capital has more than doubled every year since 2006, and in some cases much more. This tells me that how ever the future of energy is affected by the tragedy in Japan, alternative energy trends are already in place for continued growth in the decades to come.