We have been doing some research on renewable energy business evolution, which is another term for where is the solar business headed and where are wind farm businesses headed. Should you as a consumer invest in a solar generation system on your roof? What about businesses that are in the solar business or the wind farm business? Would you buy shares in a company that is based on the fledgling solar business? As an investor who is looking at his retirement income, any investments in renewable energy businesses is probably high risk at this stage since the industry is still trying to figure out how to make money and be profitable without government subsidies.

Renewable Energy Business is here to Stay

But let’s make no mistake the alternative energy or the renewable energy business is here to stay. It is only an infant in terms of evolution and must go thorough many trials and difficulties before it matures. Solar energy is really young, wind power is not far behind it compared to the grand old businesses of generating power through oil or coal fired generation plants. Hydro electric plants are even older and then there is the nuclear field which is still growing up and we are not sure that we really want to have it around us. This is the best analogy that we can come up with in terms of the electrical generation business today.

The solar companies are like a bunch of infants in a day care running around trying to figure out what they should do just to stay alive. Which one will grow up and become mature and successful. Which ones will fall by the wayside and never develop into a successful business. The message here is that if someone tells you they have this sure thing related to solar power, only put into the investment what you can afford to lose. The risks are very high.

Renewable Energy Business Development Cycle

The renewable energy business evolution is going to take a few years to develop and become stable. This could be as long as 20 years, but it will reach a level of maturity that will make us all wonder why we did not invest in the business at the outset. Electrical power companies in California must be generating 30% of their power by the year 2020 and although they have made great strides with some already in the 10% zone, they still have a long way to go.

Power consumption is growing and 30% of today’s power demand is achievable, however 30% of the demand in 2020 is much more challenging.  These objectives have been set by government to meet several of their own objectives. They want to reduce the demand on coal and oil  and they also want to reduce the pollution impact that these oil driven electrical plants have on the environment.

While the air pollution should not get worse, there is still pollution when you install solar panels. The manufacture of solar panels is one thing and does cause pollution, however the preparation of the ground and the disruption of habitat for animals that live in these areas is another. Animal rights groups are always getting in the way and fighting the construction of solar power plants. This alone could delay the power companies from meeting their objectives in 2020 which is already really aggressive without any delays.

One area that seems to be helping is that consumers are converting on mass from incandescent lights to fluorescent and LED lights, This has been reducing the demand for electricity in various states and provinces. The consumer is getting on the band wagon and reducing their electrical use by turning off lights, using power in non peak demand times etc. This is going to make it easier to meet some of the targets we mentioned above.

We are going to write more on this subject in the next few posts. leave us your comments and thoughts. They will help to influence our ideas and thoughts and contribute to the input of the next posts. Our readers will appreciate the thoughts and comments as well.

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