The approaching scenario of peak-oil production coupled with $100/barrel price, the significantly negative environmental impact of coal based electricity production, the short-sighted nature of ethanol based production driving food and its derivatives' prices higher - it is clear that the call is out in the marketplace for a sustainable and clean source of energy. This is reflected in the high prices of Uranium, in the rising stock prices of solar and geothermal energy companies, as well as the relatively large investments underway from traditional oil giants in search of clean sources of energy.
As with most things related to Wall Street, many companies get created to simply ride the momentum of clean energy - with very few having serious prospects of making enough profits to return to their shareholders. The risks in the marketplace continue to be very high. Answers to questions such as:
- Which source of energy will find its place in the electricity generation market? Will it be nuclear, solar, geothermal, wind or a combination of these? Or something not considered so far?
- For the automobile and related transportation markets, what can replace oil? Is hydrogen the answer? Is it a hybrid? Or a battery powered engine?
- How much Federal assistance will these technologies need, and for how long will they get it? How long will it be politically feasible to maintain that support?
A single accident in the case of a nuclear facility, or a single automobile exploding with hydrogen is enough to set back these technologies for years before the market will consider them closely again. Other technologies such as battery powered cars need to be tested longer and under more stringent conditions to find approval - including the issue of recycling.
Also, these companies need to operate on an international basis dealing with national politics in each country, in potentially unstable regions with changing geopolitics. A single move going against a particular company can cause that stock's value to plummet to almost zero.
Overall, putting some clean energy stocks into your portfolio with the help of investment newsletters is a good, clean idea whose time may have finally come.