Big Money Finally Sees Green in Green Sector

As always, it is a buyer-beware world, where extensive scrutiny must be made regarding the management, values and actions of a company before making an investment. For those who make wise selections for their alternative energy portfolio, great riches may be had.
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PALM SPRINGS, CA - MAY 13: Giant wind turbines are powered by strong prevailing winds on May 13, 2008 near Palm Springs, California. A US government report released this week concludes that wind energy could generate 20 percent of the electricity produced in the US by 2030, as much as is currently provided by nuclear reactors. Although wind energy constitutes only about 1 percent of the electricity of the nation, wind energy is experiencing a growth spurt with an increase of 45 percent jump last year. The report envisions more than 75,000 new wind turbines, many of them bigger than those in use today, and many of them in offshore waters to increase production from the current 16,000 megawatts of power to 300,000 megawatts. The report does not predict that such growth will actually occur but rather that it is possible. (Photo by David McNew/Getty Images)
PALM SPRINGS, CA - MAY 13: Giant wind turbines are powered by strong prevailing winds on May 13, 2008 near Palm Springs, California. A US government report released this week concludes that wind energy could generate 20 percent of the electricity produced in the US by 2030, as much as is currently provided by nuclear reactors. Although wind energy constitutes only about 1 percent of the electricity of the nation, wind energy is experiencing a growth spurt with an increase of 45 percent jump last year. The report envisions more than 75,000 new wind turbines, many of them bigger than those in use today, and many of them in offshore waters to increase production from the current 16,000 megawatts of power to 300,000 megawatts. The report does not predict that such growth will actually occur but rather that it is possible. (Photo by David McNew/Getty Images)

America's investment in alternative energy is finally crossing the chasm. Our alternative energy arc started with subsidies and research that were accompanied by early stage excitement and followed by an economic bust. In every technology evolution, some companies will make it, and others won't, but big advances favor the deep-pocketed tenacious types who understand that for technologies to evolve there has to be an investment. But now America's smart big money investors finally see green in the green sector and are putting their money where their mouth is.

Where is this smart money coming from? From the investment world, Goldman Sachs reported that it is accelerating its funding in the renewable energy stock sector as it expects "short-term volatility will be trumped by long term gains as emerging technologies become more commonplace and then become indispensable." Beyond the world of investment funds, we are now seeing the beginnings of a tidal wave of large influential companies that are taking responsibility for creating their own high-quality alternative energy power.

Warren Buffett's MidAmerican Energy, one of the largest wind power producers in the United States, invested in solar energy to the tune of $2 billion last month. Also last month, Google, which is working to power its own company with 100 percent renewable energy, has "committed over $1 billion to wind and solar projects that build a better future while also generating attractive financial returns." Information technology, which demands high-quality power, guzzles up an increasing amount of energy which is why Google has built the most energy efficient data centers in the world.

Over the past year, General Electric, one of the world's biggest wind turbine manufacturers, has been demonstrating the integration of wind power and energy storage at its facility in California with its first prototype to be installed in the Netherlands shortly.

Apple will be meeting the energy needs of their data center in North Carolina exclusively with renewable energy sources. Apple is building a massive non-utility fuel cell installation with private solar arrays. The company's operations centers in Sacramento, Austin, Ireland and Germany, already run entirely from renewable energy.

With the clean tech revolution comes the birth and development of hundreds of new companies with the products, services and materials necessary to fuel this insurrection. Some of these companies will use existing energy sources in new ways, while others are devising new technologies or providing hard-to-find critical and rare earth elements needed to power the next generation of grid storage technologies.

The future includes outstanding opportunities to invest in these start-up companies that will fuel our future away from geopolitical tensions and toward a greener, more environmentally friendly world. As always, it is a buyer-beware world, where extensive scrutiny must be made regarding the management, values and actions of a company before making an investment. For those who make wise selections for their alternative energy portfolio, great riches may be had.

I believe that a low-carbon energy future is crucial for America. By wrestling free of geopolitical burdens, we'll be able to forge a path forward that empowers, enriches and enlightens our future and the future of our children and countless generations to come.

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