Alternate energy possibilities: to Roulac global places

Abstract

Energy is what drives an economy. Rising oil and natural gas prices, and environmental concerns have led us to think about alternate energy sources. While research on this topic has been going on for years, what makes this area exciting now is improved cost-competitiveness and commitment by many of the countries to reduce dependence on conventional energy sources. The aim of this report is to perform a strategic and financial analysis of selected alternate energy sources and companies within them. Section 1 would give a brief introduction into alternate energy and investments in alternate energy companies. Section2 would give a comparative analysis of Alternate energy sources and the general risks faced by companies. Based on realistic growth potential and, economic feasibility, I have selected Wind, Solar PV, and Energy Technology for detailed analysis. While Solar PV is still not cost-competitive, I have taken up this sector considering its growth over the past few years and the performance of Solar PV companies. Section 3 will provide a general investment strategy for the alternate energy sector. Sections 4, 5, and 6 will delve into a detailed strategic analysis of Wind, Solar PV, and Energy Technology sectors. I have followed the format of analyzing the industry value-chain and identifying opportunities and challenges at each stage of the value-chain. Since alternate energy is a relatively nascent industry, I strongly feel stocks should be picked by a detailed fundamental analysis of the industry and the company. We need to answer the question: Given the expected energy policy framework and industry growth opportunities/risks, which strategy is the company employing to de-risk itself and grow, and is the strategy sustainable? For the financial analysis, I have analyzed key financial ratios and identified potential investment opportunities in this sector. The excel sheets and graphs for the relevant analysis and company selection have been attached separately. Most of alternate energy companies are loss making or just started making profits. They have shown tremendous stock appreciation over the last year due to rising oil and natural gas prices. Investments in alternate energy stocks have to be made with a long-term horizon, while the stocks remain volatile over the short term. Section 7 will give the conclusions of the report. Even though the alternate energy sources are not absolutely cost-effective when deprived of subsidies and tax credits, I feel alternate energy is at the trough of a growth curve due to energy supply constraints, environmental concerns and diversification of energy sources for heating, electricity, and transport needs. Technologies will definitely bring about major disruptions in the life cycle of alternative energy, but I see the trend going upwards over the next decade