In a world where gas prices are skyrocketing, energy usage is at an all-time high, and pollution clouds blanket the blue sky, the need for alternative energy is more important than ever before. Through research and advancement, these technologies are growing in popularity and slowly being integrated into society. As they become the norm, more people submit to them and their profits increase.
If you want to make money because of those profits, consider investing in the following three alternative energies.
Solar energy suffered disastrous years in 2011 and 2012, when the Ardour Solar Energy Index lost 66 percent in 2011 and 35 percent in 2012. This was in part because of the bankruptcy of Solyndra and the tariff wars with China. In short, the largest solar companies didn't turn many profits and many averaged millions of dollars in losses in both of these years.
However depressing the statistics of 2011 and 2012 are, energy and financial analysts may look back at them as the turnaround years for solar energy. Many companies are facing economic nightmares of oversupply and falling photovoltaic prices, which will ultimately result in mergers or bankruptcy. Because of this the number of solar energy suppliers is expected to plummet by 70 percent in 2013.
While this decrease in suppliers may scare people, it's actually a benefit to investors. The companies left standing after the mergers and bankruptcies will profit greatly, since solar is a white-hat energy source that's only at the beginning of its long-term evolution. If you're thinking of investing in a solar energy company, research the backgrounds of the companies still around and determine what their future outlook. This will help you make the best choice possible.
Wind is one of the fastest growing alternative energy sectors in the industry. In fact, it's predicted that in 10 years the amount of installed wind could more than triple from its current levels in the European Union, North America, and China. In 20 years, it could grow by eight times.
Another area in alternative energy is offshore wind, where the generating potential of offshore wind areas with less than 100 feet of water amounts to the entire generating capacity of the U.S. electric system. Because of this, the Bureau of Ocean Energy Management has interests in offshore wind leases off the coast of New York and Massachusetts.
While there are few publicly traded wind companies in the United States, a good way to add wind to your portfolio is to invest in ETFs. The first Trust ISE Global Wind Energy Index and the Powershares Global Wind Energy Portfolio ETF are both great options to start with.
One of the most promising investments in 2013 may come from the energy efficiency industry. Fidelity Investments labeled energy efficiency as a "compelling investment opportunity" in 2012 and expects global power needs to increase by 50 percent in the next 25 years. This will increase the market for more efficiency engines, buildings, and lighting.
The fact that cities increasingly require that building owners evaluate and report on how well their commercial properties use energy. Officials say the results will help government create better policy. The information also is valuable in real estate transactions. Buyers get a better sense of a building's true value. And owners of green buildings may use the information as a marketing tool when renting or selling the property.
Alternative energy is here to stay. Invest in it so you can reap the profits. Investment experts like Peter Briger can offer professional advice on investing. Companies like A.O. Smith Corp. (AOS) and Tetra Tech, Inc. (TTEK) are both great long-term investments.