The
Dawn of the #Solar Age and the Greatest #Investment Opportunity of all Time - J
Peter Lynch
Point Roberts WA, Delta BC – Feburary 4, 2021(Investorideas.com
Newswire) Investorideas.com, a global news source and leading investor resource
covering Cleantech
and renewable energy stocks issues today's Cleantech column at Investorideas.com and Renewableenergystocks.com with J.Peter Lynch.
Read this in full at https://www.investorideas.com/news/2021/renewable-energy/02041J-Peter-Lynch-Solar-Age.asp
We are at an historic junction of human history in which we are transitioning from the age of fossil fuels to the age of renewables and distributed energy, in effect a true paradigm shift. The tide has turned and the worldwide momentum is irreversible. This change is occurring all around the world and has been accelerating dramatically in the last 3 years.
One of the most critical factors in this accelerated transition is plain
and simple, yet financially compelling – economics! Strangely this is seldom highlighted in most
articles.
The truly interesting and
significant dichotomy in this transition is that, at this time the greatest
threat mankind has every faced – Climate Change, is upon us and must be addressed
immediately and at the same time, Climate Change also presents us with the greatest
investment opportunity of all time!
Climate Change must be addressed,
and by far the fastest and cheapest way to address it is with existing
renewable technologies – solar, wind, biomass and working together connected to
batteries when needed and distributed energy networks that are far more
flexible, extremely resistant to disruption (storms, terrorism) and have a
significantly higher proven reliability.
The investment areas include: solar, wind, batteries, electric cars, fuel
cells and micro grid related companies which are just starting to appear and
present themselves, and many more will arise as the transition accelerates.
It is
important for the investor to understand that humans tend to think linearly
(pretty much straight), whereas innovation and paradigm shifts are never linea,
they are always in an S-curve type of acceleration when it moves along on a
slight incline (the decades of the change) and then takes off sometimes almost
vertically. That is one of the reasons investors generally miss the inflection
point where the innovation or paradigm shift starts its dramatic acceleration.
It will be the savvy and aware investors and
corporations that will take advantage of this. Now that the economics are much
more obvious, this will spark the investment community and they will further
accelerate the transition. It will become
increasingly difficult to ignore the superior financial numbers of renewables
and in the end, the best investment for investors and for the planet will be
the same – renewables.
You may hear about or read about how expensive
it will be for the transition to renewables and yes it will be very expensive,
but it is magnitudes
cheaper than repairing old and decrepit
infrastructure and building new power plants that are actually obsolete
before they are built and will end up as worthless stranded assets. The
longer we wait, the higher the cost to address the problem will be.
The time is NOW.
We need to combat Climate Change
in the fastest and cheapest way, which is with solar and other renewables. In
addition to being the fastest and cheapest, it is also clearly the “greatest
investment in the history of humanity”.
It is a no loss action in which
everyone benefits.
Why
are renewables the Greatest Investment Opportunity in History?
Renewables will be a great and
transformative investment because they have all the key characteristics of a
great investment. They are simply: Better, Faster and Cheaper!
Better – it is clean energy, the only
truly abundant energy source, available everywhere, has far less
financial risk and is the only energy source that strengthens rather than
weakens national security.
Faster - solar scales up as much as
15 times faster than nuclear or fossil fuel
plants. There is simply no financial comparison when it comes to speed
of building and the time value of money involved. (Money tied up in a project
than takes many years( 5-10) verses one
that is built in 12 to 15 months months.
Cheaper – solar is cheaper NOW, due
to recent dramatic decreases in price (62% for wind and 82% for solar) in the
past 3- 5 years. These decreases continued in 2020 and are projected to
continue through 21-25 and beyond. Another fallacy concerning
both wind and solar is that they take up too much land. As you can see below
that is simply not true.
The
intrinsic advantages of solar are dramatic and insurmountable
1.
Solar
is abundant, can be utilized in almost any size (a wrist watch to a city) and
available everywhere. It is, in fact, the most “democratic” form of energy in
existence. 
2.
Solar is renewable and is not finite as are all
other fuels and it is the only source of energy that can easily supply all our
long term needs. ** The energy from approximately 2 weeks of sunshine hitting
the earth is greater than ALL the energy stored in existing fossil
fuels.
3.
Solar & Wind are the only energy
generation technology’s that do not utilize (and pollute) vast amounts of fresh
water. This is a overwhelming advantage that is seldom mentioned. However, it is without
question, an advantage that is truly insurmountable.
4.
Solar & Wind are the only energy source’s that
do not create or emit carbon and further contribute to climate change.
Why
Investing is different when a ‘paradigm shift” is occurring.
One of the “old” contrary adages
in stock market investing is: “this time it is different” – it is generally
associated with novice investors who most of the time, lose money.
It is a true that most of the
time – things are the same, but during a paradigm shift – the old rules
do not apply and a unique & dramatically different playing field
presents itself to investors.
It happened before when personal
computers (distributed computing) supplanted main frame computers (centralized
computing) and it is happening now with distributed renewable energy technologies
overtaking antiquated, inefficient and costly centralized energy generation.
The risk of investing in huge power plants that have 30+ year lives when
there is the distinct possibility that they could become negative cash flow
nightmares quickly is simply gigantic. With efficiency improvements and solar
and wind growth the electricity demand worldwide has been decreasing for the
first time ever. This decrease in demand will certainly lead to dramatic decreases
in revenues and almost certainly long term negative cash flows for central
plants.
Likewise investing in assets
(oil, coal, gas) that are in the ground also presents an unacceptable level of
risk to any investor. These assets could become stranded as a result of climate
change or simply because they will cost too much compared to renewables to
extract. In the U.S. there has recently
been significant pressure for colleges and state pension funds to divest their
portfolios from investments in coal and other fossil fuels.
Over the past year the S&P 500 index (SPX)
has been up 17.6% Oil ETF’s have been down 38% Solar ETF’s up 233% and Wind ETF’s 87.8%. I fact the “average” return to investors from Oil and Gas ETF’s over the
PAST TEN YEARS has been -11.26%, with no year having a positive return. Why
anyone would invest in fossil fuel related companies? I do not know what the
investment strategy these analysts are utilitzing but it NOT the one I
recommend – “ buy low and sell high”, the evidence seems to say that their
investment strategy is to “buy high and ride it to ZERO”.
The end of the fossil fuel era is
approaching and the
trend is irreversible. It is simply
another example of the capitalist process of creative destruction that
has taken place in many industries over the last 100 years and has
always resulted in a huge investment opportunity.
For investors following renewable energy and solar
stocks, visit the directory of publicly traded stocks https://www.investorideas.com/Companies/RenewableEnergy/Stock_List.asp
Visit the Cleantech and Climate Change Podcast page at Investorideas.com
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