Ok, so investing in clean energy options is hardly a new idea and many investors already hold these assets in their retirement plans. But, it is still worth noting that countries across the globe are becoming more concerned about climate change and the negative impact that things such as oil and coal have on the environment. Many countries, including the United States, are considering taking significant steps to decrease carbon footprints where they can. It’s a slow and steady—and somewhat expensive process—but most would agree the potential results make it necessary to do so.
We recently blogged about the rising popularity of sustainable (or socially responsible) investments and the possibilities these assets offer for self-directed IRAs. Solar energy presents one choice that may be favorable to investors seeking options in this asset class. Whether your desire is to invest in things that serve a greater good or simply to make potentially healthy returns in your portfolio—solar energy investments are not to be ignored.
Why? As mentioned above, clean energy options have moved to the top of global priority lists. Approximately 195 countries recently consented to draft a climate change agreement that would reduce carbon dioxides emissions by 2050. The level of that reduction has yet to be decided, but all you have to do is look at China, where they often wear protective masks in times of intense smog, to understand that we clearly have a problem and unless we implement more environmentally safe alternatives, well, it’s not hard to figure out.
And, yes, that is a collective “we” that even includes the Middle East where an oil field in Oman is building panels to turn solar energy to steam for oil extraction. In fact, an article published on CNNMoney reports, “Even though GlassPoint’s solar project will only provide one-third of the steam at Oman’s Amal oilfield, the company estimates it will save 300,000 tons of CO2 emissions each year. That’s the equivalent of removing 63,000 cars from the road. To put it another way, it’s more carbon savings than all the electric cars sold by the likes of Tesla (TSLA) and Toyota (TM) combined in the U.S. today.” The company is beginning work of a similar scope in California.
It is important to understand that GlassPoint’s projects are not your traditional solar panel installation. The company manufactures and installs steam generators for the oil and gas industry that use an enclosed trough technology to house mirrors that are curved in such a way as to capture the sun’s light from all angles during the day. This company is just one example of how others are considering and implementing strategic innovations to capitalize on a demand—and need—of the times.
Even in the face of the oil and gas industry slashing prices and cutting costs across the board—solar options present alternatives for these companies to further cut their production costs if solar energy can be used to aid oil production. “GlassPoint estimates that fuel purchases make up 60% of the operating expenses at heavy oil fields,” the article on CNNMoney states. “That means a cheaper alternative like solar would sound quite appealing to oil execs.”
And there it is: small steps can make a big difference—and savvy investors cannot ignore the potential of investing in this asset class.
While oil and gas prices have hit extreme lows, solar energy can be expensive for the average consumer in comparison. That equates to reports of the traditional solar energy industry struggling somewhat, an example found in SolarCity (SCTY) shares’ recent plunge and their subsequent, significant reduction in their growth forecast.
But, we are not here to analyze and critique every aspect of solar energy investments from the traditional to the cutting-edge designs. There are obvious obstacles. Nothing is perfect. We all win some and lose some. And while solar and other clean energy options are learning and growing and sometimes flailing, many experts in the industry will tell you that clean energy is here to stay.
Further proof of that may be found right here in the U.S., where employment in the solar field is reported to have “more than doubled” over the last five years. According to yet another article published by CNNMoney, “Today, the solar industry workforce is bigger than that of oil and gas construction, and nearly three times the size of the entire coal mining workforce.”
Advanta IRA does not sell investments and we don’t give advice. However, we do present you with food-for-thought as to the different types of alternative assets that have the potential to grow your retirement income. Solar energy options happen to be one of them, and we’re seeing a growing number of positive reports regarding that field.
Should you choose to obtain assets in clean energy? Well, that’s up to you. That’s the beauty of self-directed IRAs: the retirement plan owner makes his or her own decisions on which investments to acquire to build income. If you are familiar with these options and comfortable with the idea of growth in the industry, these assets may be quite appealing to you. If you know nothing about them—you can learn.
So, we’ve presented you with one of many alternative investment options for your self-directed IRA and below are the references to back this article up should you choose to investigate further. We encourage you to do a little of your own digging and determine if these options are a good fit for your overall plan and goals.
In other words, find what you know best—and invest.