Going Green: Is It Actually Profitable?
When the green movement started, people assumed it would be a passing fad. But it’s obvious now that alternative energy and environmentally-friendly materials are the future of this planet, especially after the sudden leak of an important environment report presented to the White House that shows just how urgent the effects of climate change are. And as the green initiative continues to gain strength, investors are looking to the industry for new profit-making opportunities.
Considering that environmentally-friendly business practices aren’t always the most profitable, many investors are wondering if its actually a good move to buy stock in these types of companies. But as we’ve seen with the coal industry, other fossil fuel and polluting energy industries are beginning to fade away. Regardless of the current state of the industry, going green is the future.
Transforming Going Green into Making Green
When alternative energy industries began hitting the markets, the only appeal was technological. The cost of generating power with photovoltaics compared to traditional fossil fuels was so high, even government subsidies couldn’t effectively make up the difference. In solar, for example, the Investment Tax Credit covers 30 percent of the cost for solar installation and is scheduled to last until 2021.
But now, the costs for alternative energy are coming down. A report of energy prices in 2016 revealed just how low the different costs for each energy type are:
Coal – $0.06 cents per kilowatt hour
Steam – $0.05 cents per kilowatt hour
Natural Gas – $0.03 cents per kilowatt hour
Solar – $0.029 cents per kilowatt hour
This past year marked the first time solar took over as the cheapest relative energy source. Because solar power is considered a technology and not a fuel, prices will continue to fall as technological innovation makes more breakthroughs. With the majority of the world dedicated to replacing fossil fuels with alternative energy providers, green energy is destined to take over as the number one energy supplier.
Other industries are going through similar changes. Oil is still necessary for the automotive industry, although companies like Tesla are slowing gaining market share. Companies like GM and Toyota have similarly followed suit by offering more hybrid and electric vehicles as part of their lineup.
Again, technology is the key to the industry. Tesla may be an auto-maker, but the secret lies in battery technology. New developments have made batteries longer lasting and more energy efficient. Within the next decade, we could see electric vehicles take over traditional gas-power vehicles as the main source of transportation.
As new technologies emerge, the green industry will become more and more price competitive. And new technology means new applications for multiple industries. Supporting alternative energy is akin to investing in the tech industry. Going green could be a way for investors to actually make some green along the way.