In this clip from "The High Energy Show" on Motley Fool Live, recorded on Feb. 8, Motley Fool contributors Travis Hoium, Jason Hall, and Zane Fracek talk about what they're excited for in the renewable energy space and what they think some investors might be overlooking.
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Travis Hoium: As we look across the industry, where are some areas that you're excited about renewable energy growth? I think this is one of these places where there are ebbs and flows. We talked about that a little bit. There's the macro trend and then there's trends within that where wind will go crazy for a couple years and then it'll die off and then spiller will go crazy, and we've got all these other interesting technologies coming down the pipeline. Where are you looking at, from an investment perspective, for opportunities over the next decade?
Jason Hall: I think investors are overlooking biomass. You think about wood pellets for offsetting natural gas and coal and power plants. Basically, it's a plug-and-play feedstock. In the Southeastern U.S., the rate of regrowth is great. You think about versus pulling fossils fuel out the ground where you release that carbon into the atmosphere. You basically create a cycle. Where you're using it for energy and you're regrowing it and you're capturing that carbon at the same rate you're using it and I think that's underappreciated. You think about agriculture so you think about renewable natural gas. It's harder to find winners in that space. I think that's one of the challenges. But I always come back to, Travis, and this is as much from the mistakes that we talked about having made over the past decade to the successes, is those recurring cash flow businesses, the YieldCos. The companies that fall in that project finance bucket because the economics work. The tailwinds are in place, and you benefit from the cycles as a buyer.
Hoium: You don't care. If solar's winning or wind is winning, or energy storage is winning, you don't care.
Hall: Yeah, exactly. You benefit from all of those tailwinds, and if you're a good capital allocator, capital is going to come to you to invest. It just makes it so much simpler. I just always fall back to that because it works.
Zane Fracek: Super attractive thing for me about biomass is, I feel the input costs can be really low if you're basically reusing waste product to come up with your final product and the fuel. That's really attractive to me. If you can take like corn husks or whatever, coffee grounds or whatever, and you're making usable energy out of that.
Hall: There's a couple of companies that are really good here. Treetops. You think about the demand for lumber right now there's tons of lumber waste so it's really interesting.
