There’s been a big push in the United States towards renewable energy in the last 15 to 20 years. Although there are still critics, the fact is that US companies have put wind, solar and biofuel at the forefront and they have started steadily trickling into the country’s energy mix. Still, renewable energy only makes up about 9% of total energy consumption today.
It’s been fascinating to watch, to say the least. Between 2000 and 2012, for example, wind generation skyrocketed from 6 billion kilowatt-hours (kWh) to 140 billion kWh and ethanol production has gone up from 3 up from 3 gallons in the same time. While that rapid growth might suggest that it’s not a good time for investors the fact is that there are plenty of opportunities open and this blog will focus on 5 of the best of them. Enjoy.
With wind comprising nearly 60% of their 17,771 MW of total capacity, NextEra is the largest supplier of wind energy in the country. Not only that but nearly 95% of all the energy that they produce is from clean, renewable resources. NextEra has also been one of the key players in the United States adoption of wind energy and is geared towards the future and major growth.
One of the leaders in America’s biodiesel market, REG is a company that has been undervalued for practically the entire time it’s been on the market. Many argue that their current share price doesn’t account for their gross assets that will be coming online over the next several years. One telling sign is that they reached $1 billion in annual revenue in 2012, the first time they’ve ever done that. Not only that but they are on a pace to be the suppliers for 25% of the biodiesel sold in America in the next few years, something that makes their stock very alluring.
SunPower is a solar energy company that has certainly seen their fair share of ups and downs over the last 5 years along with many of the people who invested in the solar market. The trend seems to be reversing however as the residential solar markets have climbed so far this year, a good sign that their profitability will be increasing. Add that to the fact that solar panel efficiency should increase by 23% in the next two years and SunPower starts to look like a great opportunity indeed.
When they became the third largest ethanol producer in the United States, Valero joined the list of renewable energy companies even though they’re the nation’s 3rd-largest refiner. The fact that they have acquired 10 state-of-the-art bio refineries in the last few years is also a sign that they’re in it for the long run as well as the investments that they have made in next generation biofuel technologies. Interestingly, Valero installed a 50 MW wind farm in Sunray, Texas in 2009 to provide power to one of their 70-year-old oil refineries. Talk about playing the game from both sides of the field.
Lastly there’s Waste Management, another company that might have you scratching your head when you think about renewable energy but the fact is that they’re developing a huge portfolio of waste-to-energy technologies that will allow them to more efficiently use the garbage in their landfills. And when we say ‘use the garbage’ we mean use it to produce compressed natural gas fuels, man-made carbon sinks and clean electricity. Indeed, their landfills produce more electricity than all of the American solar industry put together, enough to power more than 2 million homes and offset almost 4,000,000 tons of coal. That’s huge and makes them a solid investment.
Top energy experts today still don’t believe that we will ever live in a world that generates more power from renewable energy than it does from fossil fuels. That being said, there are plenty of ambitious companies that are trying to change that thinking and this ambition equals many opportunities for investors. When you consider that wind energy, if it could be stored during off-peak hours and used when usage peaks, would technically be enough to power the entire United States, you can clearly see that investing in renewable energy does have a nice ring to it.