RenewableEnergyStocks.com Follows the Money in Renewable Energy and Looks at Market Upside Support from New Funding Efforts
Despite the downturn in renewable energy stocks since Spring of this year, the growth in new money being put into cleantech projects has significantly increased. The strength in the flow of investments acts as an indicator for long term growth and upside within the clean energy sector. As the market continues to sort through the abundance of new technologies and faces the typical growing pains associated with accelerated development, the concentration of funding will enable viable technologies to emerge.
Recent high profile moves by Former President Clinton as well as Sir Richard Branson have placed the spotlight on the renewable energy sector. Clinton made headlines through the announcement of a new investment fund called “Green Fund” which plans on raising over $1 billion for investment into renewable energy, with a specific focus on making a profit while reducing the dependence on fossil fuels, lowering pollution levels and global warming. Branson turned heads with his public promise to invest approximately $3 billion over the next 10 years from his airline and rail businesses into renewable energy technology to help address issues of global warming.
As Dr. Robert Wilder, Manager of the WilderHill Clean Energy Index and Co-Manager of the WilderHill New Energy Global Innovation Index explains, “On the short term horizon the green energy sector is down significantly. As measured by our Wilderhill Clean Energy Index©, this sector is down approximately 35% from May. However, there is also a medium and long term horizon to consider, which is what Branson, the Clinton initiative and other investors are looking at.”
In addition, momentum continues on the state level with various U.S. states such as Texas and California making major commitments to escalate the integration and innovation within the clean energy arena. The state of Texas in partnership with several private companies such as G.E. Energy, Siemens, Shell WindEnergy and many others, plans on investing more than $10 billion in new wind energy infrastructure. California’s Governor Arnold Schwarzenegger signed ground-breaking legislation representing the first state law aimed at reducing greenhouse gas emissions.
Within the venture capital arena the increased level of investments into “green” technology has continued to rise significantly. According to the Cleantech Venture Network®, the first half of 2006 showed investments in cleantech reaching $1.4 billion, which is almost double that of the first half of 2005. Keith Raab, CEO and Co-Founder of the Cleantech Venture Network describes, “The interest in cleantech has moved beyond investors to corporations, global media, national and state governments, academia, and the general consumer, reflecting its broad acceptance.”
What does this mean for investors? For starters it is validation of the long term potential of the renewable energy market and a compass that can be followed into technological paths that are garnering the attention of major financial investors. It is also an indication that the sector, which has been moving through a refinement and cleansing phase, has an increasing amount of financial support to help sort through the numerous companies and technology available, to establish the truly viable products.
In terms of specific areas gaining attention Dr. Wilder states, “The new money in part is going into thin-film solar that will see the ability for solar panels to be developed without the ceiling on growth faced by traditional solar PV technology because they use very little silicon. The wind industry is also in the spotlight, but is in need of better engineering to increase overall capacity. In both solar and wind, teething pains need to be overcome which short term is a real problem, but long term there is a great deal of growth potential.” Dr. Wilder also sees second generation biofuels as another long term prospective area that has many investors paying close attention.
Overall, with the flow of funding continuing to increase, the viability and potential of the cleantech market, despite current lows, shows a great deal of opportunity moving forward.