Paul Ferraresi

The push today to find alternative sources of energy is overwhelming. As the price of oil rises, these alternative sources become more feasible. Unfortunately, it will take a long time (5-10 years) before you may get your investment money returned. Make sure to diversify your money as many of the alternative energy start up and established companies may not have the resources to survive 10 years or more.

Solar has been a very costly way to produce energy. As the years have passed, the new technologies are helping to reduce costs. There are companies that produce thin film modules that require very little silicon, thus, cutting costs.

Bio-fuels, such as ethanol, have become the hot topic. Unfortunately, without the government tax subsidies (that is, you paying for the companies to be profitable) then, this program would not work. Ethanol is inefficient, that is, you will obtain less miles per gallon using ethanol versus gasoline. This means people will need to buy more gasoline to go the same distance, thus, defeating the purpose. Next, corn is used to create ethanol. This product has to be transported to the processing plant, which uses more gasoline. When the product is made, there are no pipelines, so it has to be transported by truck to the oil refineries wasting more gas. On top of that, since farmers are getting a tax subsidy for growing the “ethanol corn”, very little is going to feed stock. That is why meat, pork, and poultry prices have skyrocketed for you and milk is approaching $5 per gallon. Ah yes, “Government Programs”.

Wind is a great alternative. It is cheap and can produce power at 4-6 cents per kilowatt. Unfortunately, people do not like looking at the wind turbines, even if that means saving money. Please!

If you want to participate in alternative energy you do need to have a long time horizon and a strong stomach as the investments will be volatile.

Here are some informative sources:

CLEAN EDGE
www.cleanadge.com
Research/consulting firm on the clean-tech sector

KLD RESEARCH & ANALYTICS
www.kldindexes.com
Information on SRI, including alternative energy

SUSTAINABLE BUSINESS.COM
www.sustainablebusiness.com
Publishes information on alternative energy

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Interesting Tidbit

TEN BEN FRANKLINS A DAY

It takes an adjusted gross income of $365,000 (i.e. $1,000 of gross income a day) to rank in the top 1% of individual income tax returns.

(Source: IRS)