Investing in Energy Efficiency Companies
Where Environmentalism Meets Capitalism... Responsibly
The thermostat is set two degrees cooler in winter and two degrees warmer in summer. And you use the clothesline whenever you can.
Your home is properly insulated and the hot water heater is set to 120 degrees.
But what else is out there in the world of energy efficiency?
As a green--or greening--consumer, you're interested in saving energy, be it for environmental, economic or other reasons. And as a reader of Green Chip, it's likely you're interested in carrying those practices and beliefs one step further--to your portfolio.
Luckily, this transition is easier than ever, especially when it comes to investing energy efficiency stocks.
It takes money to make money. That's what they always say--whoever they are.
That's why you don't mind shelling out a few extra bucks for light bulbs that last longer and use less energy, or for insulation with a higher R rating, or anything else, for that matter, that ultimately is beneficial to both the earth and your bottom line.
But when it comes to investing, many people don't realize exactly where their money is. Some of the most energy- and earth-conscious consumers don't even know they're tied up in some dirty utility or invested in an oil drilling company via a fund in their IRA.
Wouldn't it make sense, then, to find out where your money is and invest it in something you believe in, especially if you can make some money in the process?
I'm not talking about putting your life's savings in an unproven start-up or sinking your kid's college fund into some newfangled technology that will purportedly save all of mankind.
I'm talking about making money by investing in what you believe in. That's what Green Chip is all about--investing in clean power, organic food and energy savings through legitimate and profitable companies.
It only makes sense that if you're willing to spend $5,000 making your home more energy efficient, you'd be willing to invest the same amount in companies that specialize in energy efficiency rather than those whose activities go directly against what you're trying to accomplish at home.
Energy Efficiency Stocks
For example, EnerNOC, Inc. (NASDAQ: ENOC) works with commercial, institutional and industrial businesses and organizations, utilities and grid operators, regulators and policy makers to meet energy needs with demand response solutions.
Essentially, demand response is the voluntary reduction of electric demand in response to grid instability or high wholesale prices. This increases grid reliability and helps keep energy prices low by reducing demand instead of adding supply.
EnerNOC collects energy by reducing demand at thousands of end-use customer sites (commercial, institutional and industrial businesses and organizations) to provide significant and immediate megawatt capacity when high peak demand compromises grid stability.
This alleviates grid constraints effectively, economically, efficiently and environmentally and defers or eliminates the need to build costly peaking power plants.
In fact, EnerNOC creates the equivalent of a new peaking power plant every three months--with absolutely no net increase in carbon emissions.
In the past three months, EnerNOC has risen over 32%, from $32.50 to nearly $43. Compare that to Exxon Mobil Corp. (NYSE: XOM), which rose only 3.3% in the same period. Or to ConocoPhillips (NYSE: COP), which has taken a 1.5% loss.
You give those last two companies enough money when you go for your weekly or biweekly fill-up, which is now probably costing you in the neighborhood of $50, what with the price of gas shooting up $0.13 in the past two weeks and now averaging about $3.10 per gallon.
They just keep taking your money without giving anything back except pollution. EnerNOC actually pays qualified commercial, institutional and industrial businesses and organizations that agree to reduce demand using their strategies.
Sounds pretty good, doesn't it?
It gets better.
Echelon Corporation (NASDAQ: ELON) and Comverge (NASDAQ: COMV) are two other energy efficiency companies that have given some nice returns to savvy investors. Echelon has contracted with huge companies like McDonald's (NYSE: MCD) and Comverge has contracts with multiple utilities, including PG & E Corp. (NYSE: PCG), for which it will provide 50 MW of electricity through demand reduction.
And the opportunities at Green Chip continue--solar, wind, geothermal , etc. We invest only in companies that are environmentally and socially responsible. If this fits it with your belief system, shouldn't you be doing the same?
The misconceptions about being green are long gone. It's now possible to incorporate capitalism and environmentalism, responsibly. And the market is worth billions already.
We're taking advantage of it every single day.
Until next time,