According to a recent EIA report, 2015 marked a milestone in the green energy revolution -- a record-breaking 55% of newly installed electricity generation capacity came from renewable sources.
In this segment from Industry Focus: Energy, Sean O'Reilly and Taylor Muckerman talk about the possibility that we've hit escape velocity with emission-free energy, and the ramifications on the broader future of energy. Also, they talk about the few companies investors might want to take a look at if they want exposure to the budding green energy market.
A full transcript follows the video.
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This podcast was recorded on Oct. 27, 2016.
Sean O'Reilly: According to the Energy Information Agency, renewable energy reached an important turning point last year with record new installations for emission-free power. The phrase that immediately entered my mind was "escape velocity." It seems to have hit what it needs to hit to keep this trend going.
Taylor Muckerman: What did it say, 55% of newly installed capacity last year was from green power globally? Yeah, I think that pretty much signals that it's of age. More than half. And total installed capacity exceeded coal for the first time ever. That wasn't additions, that's just globally, power being produced green versus globally power being produced by coal -- green wins.
O'Reilly: I also couldn't help but notice that they had a lovely chart in the EIA release. If you would like us to send you this link, or you can Google it --
Muckerman: We can tweet it out.
O'Reilly: That's a good idea!
Muckerman: @IndustryFocus and @TMFEnergy.
O'Reilly: What is it, social ... media?
Muckerman: Something like that.
O'Reilly: Yeah, that's a good idea, Taylor.
Muckerman: Yeah, why not?
O'Reilly: They had that chart. The U.S. needs to play catch-up. We're trailing installations in countries like China.
Muckerman: China, "the undisputed global leader," according to Bloomberg, who published an article about this exact topic, expected to account for 40% of growth going forward.
O'Reilly: Wow!
Muckerman: I mean, it's a big country, right?
O'Reilly: It is, but it's not 40% of the global population, ergo ... that's a big chunk.
Muckerman: They're spending a lot of money over there.
O'Reilly: Did you happen to catch what types of power they were installing? I know they're big into hydro.
Muckerman: They have big hydro production in the south along the borders, India and other countries down there. I would imagine there's some solar to be had. What's the big desert in China? Not the Gobi ...
O'Reilly: Mongolian?
Muckerman: I don't know.
O'Reilly: We are not geography champs.
Muckerman: No, it's not over there. I can tell you where the Sahara is.
O'Reilly: Oh, God, really?
Muckerman: And the Atacama Desert. And, uh ...
O'Reilly: We need to stop, just stop.
Muckerman: (laughs)
O'Reilly: For all our old geography teachers listening, we're sorry. China, U.S., and India seem leading the growth. Really quick, you're an investor -- what are you thinking right now?
Muckerman: I'm thinking there still aren't a whole heck of a lot of opportunities to invest in solar, hydro ...
O'Reilly: Manufacturers are going bankrupt left and right.
Muckerman: Yeah, it's still very early stage in terms of who the winners of this long-term trend are going to be. SolarCity is about to be off the market, supposedly. But then you have companies like Ormat Technologies (ORA -1.05%), which is geothermal, which is green. That's a company that I've been following for quite some time, they've done very well. Global geothermal installer and utility operator. Outside of that, you mentioned solar-panel producers, that's just a race to the bottom ...
O'Reilly: You have SunPower.
Muckerman: Yeah, but even then, there's some struggles going on.
O'Reilly: For sure. Total, of course, has a large stake, so that's good.
Muckerman: Yeah, they have some good financial backing, and probably access to cheap capital, even if rates decide to rise because of that backing by Total. But just to list a few, yeah: SunPower, First Solar, Canadian Solar is a panel manufacturer. Clean Energy Fuels, but that's more natural gas fueling, not necessarily green energy, but cleaner energy. There's options out there.
O'Reilly: Bottom line, it does seem like, this is super-interesting, obviously impactful for mankind, but investors should watch?
Muckerman: Keep an eye on it, for sure. But it took this long for it to account for 55% of total installations ...
O'Reilly: New installations per year.
Muckerman: Yeah. There's still a lot of legs left here.
