As over-consumption of resources like wood, oil, and even fresh water become problems around the world, communities and businesses are looking to find renewable resources for operations. Whether that's more sustainable farming, water conservation efforts going on in California, or growth in renewable energy, there's a lot of value in renewables for businesses and investors.
Here are a few of the more important renewable resources and how investors can profit from them.
Source: First Solar.
Wind and sun
The biggest renewable transformation taking place today is in energy. Wind and solar energy are now cost competitive, with fossil fuels like coal and natural gas transforming how both consumers and utilities look at the future of energy.
SunEdison (SUNEQ) is the world's largest renewable energy developer, with wind, solar, and even energy storage projects in its portfolio. If there's one company to watch in the renewable energy space, it's this one, because it has grand growth plans that could become a boom or bust for investors long term.
On the slightly less risky side of renewable energy stand SunPower (SPWR -2.21%) and First Solar (FSLR 0.43%), two solar manufacturers with a differentiated product from their competitors. They've become leaders in the space -- two of the largest product developers with projects around the world. As the solar industry grows and costs fall, efficiency will become more and more important to maximize energy production from each square foot of space. That's where SunPower and First Solar have a lead over competitors, and it's why they'll lead the solar resource revolution into the next phase of development.
Whether it's SunEdison, SunPower, or First Solar, the wind and solar industries are now cost competitive around the world with fossil fuels. That changes the energy landscape and could make renewable resources a main supplier of electricity in just a few decades.
Renewable crops
One of the most import renewable resources today is in the agriculture space. Companies like Monsanto (MON) and DuPont (DD), who provide a lot of the seeds in the groud today, have to look at their businesses as more than just seeds. They design crops, pesticides, herbicides, and crop rotation plans to maximize long-term soil viability for their customers.
If agriculture is a destructive resource, as it has been in places like the Amazon or in Central America, rather than a renewable resource, it's going to be detrimental to their long-term businesses -- and humanity as a whole.
There are also a number of new products using crops as feedstock for even higher-value products. Solazyme and Amyris use crops as feedstock to make everything from fuel to cosmetic products. As more products like this are designed, the need for greater renewable resources in agriculture will only grow.
Making the renewable resources market even bigger
For investors, what's interesting is what businesses renewable resources open up. Tesla Motors (TSLA -1.92%) isn't exactly a renewable resource company itself, but it supplies products that benefit greatly from renewable energy, like wind and solar. Battery demand that Musk is building in Nevada will come primarily from renewable energy, and Tesla's auto business has partnered with SolarCity to install rooftop solar systems.
Companies like Whole Foods also aren't directly renewable resource companies, but they create a market for products that may be sourced more responsibly than others.
As the world changes, and we become more aware of the impact we have on the environment and how we can limit the viability of the resources we do have, it creates opportunities for businesses who use renewable resources. It's something worth considering next time you buy a stock that may be selling resources that aren't as renewable as you think.
