With the oil prices roller coaster, the increase in demand for energy in developing countries and the emergence of new technology making the investment in renewable energy resources an attractive idea.
However there are some considerations that have to be made before investing in green energy company, in order to make sure that this is a good investment.
Although I support the idea of investing in renewable energy resources, and believe that this is the near future of high yield investments, I have to put some warning before opening the wallet:
Investing in green energy is usually investing in the environment more than in the company
You must know that with current technology, of the traditional renewable energy equipment: solar power, wind energy, biofuels etc. we cannot achieve the same efficiency that we can achieve with the old technologies of fossil fuels. In many cases these companies are supported by the public demand for clean energy, which is more expansive and may be not compelling in the future.
Many of the green companies today enjoy governmental of other support that inject life into their failing business plan. So make sure you understand their business before you invest.
What is the business plan?
Since green energy is tend to be more expansive even with the raise in oil prices, you have to make sure that they can show good sales reports, and that the earnings of the companies are real, from actual customers, and not from research funds, or public money. Investing in a company have to relay on good plans for the future and sound business plan, like any company. Bad business plan will fail, even if the ideas behind it are brilliant, and it is enjoying political support.
What is the technology?
I think that one the ways to decide whether a company is a good investment in the renewable energy industry, is to understand the technology. For my opinion, in order to succeed in the green energy world in the future you must have a new, good technology which is superior in its field, and proven to work. I know that it is hard to evaluate that, but I think that this is the key to the doors of the alternative energy future. Only technologies which are efficient enough to compete with traditional energy sources in the economical sense will survive in the upcoming decades.
Availability
Anther thing you have to consider is the real availability of the technology offered. Make sure that this technology relay on resources which are available in the area in which the company operates, and that the resources are really sustainable. A solar power company have to be working, in a sunny environment etc.
So to conclude, I have to say that investing in green energy today have a huge potential, but it is also risky. make sure you understand the technology and the business plan before spending the money. I think that it is worth it, and you will not be sorry.
What everybody ought to know about investing in green energy?
