How Will The International Expansion Of Alternative Energy Affect Utility Prices?
Although the United States has been harnessing solar energy for decades, this alternative power source has only recently made its way abroad. During the next few years, India plans to build a solar power plant that will produce more energy than the total sum of solar energy produced across the US in a full calendar year. What will this international transition to alternative energy mean for utility prices in the U.S.? And what can you do to capture profit from this tidal wave? Read on to learn more about the global effects of the rise of renewable energy.
What will India's new power plant mean for the United States?
In India, most energy is produced by burning coal or natural gas. However, the coal available in India is of lesser quality than much of the coal produced in the U.S., and is therefore much less efficient (and produces more harmful environmental waste). By expanding the amount of solar power available, India can reduce its dependence on these sources of energy while extending electricity to more and more citizens. Many rural areas of India are still completely without electricity or internet access.
Long-term, this is likely to be an economic boon to the U.S. As more Indian citizens gain access to electricity at reduced prices, Indian wages will rise (making Indian workers more financially competitive with U.S. workers and driving up U.S. wages). As the country's air quality improves, health will improve as well.
What can you do to benefit from this expansion of solar power across the globe?
India isn't the only country with big solar energy plans. One European corporation plans to create a solar installation in the Sahara desert, which could ultimately provide up to 15 percent of the energy consumption of all of Europe. In fact, the continent of Africa receives enough annual sunlight to provide the entire planet with electricity.
Although all humans should benefit from this transition to alternative energy, there are some additional ways you may be able to take advantage of this trend.
- Invest in solar energy stocks
- A decline in the up-front cost of solar installations has multiplied the number of publicly-traded companies dealing in the expansion of solar energy. Investing some of your long-term savings in one (or more) of these companies can provide you with a steady stream of income (via dividends) later in life.
- Choosing a specific company in which to invest can be risky. However, there are a number of index funds available that specifically focus on renewable energy. These index funds carry slightly less risk -- the funds create a "sandwich" of solar energy stocks, so if a single company files for bankruptcy or dissolves, the total effect on the fund is minimized.
- Investigate the cost of converting your home to solar
- The primary drive behind this energy expansion is not a desire to reduce the amount of non-renewable resources used for energy consumption, but a dramatic decrease in the cost of solar installation. You can take advantage of this price drop in your own household by investigating the cost of installing solar panels.
- In some cases, you may be able to entirely convert your home to solar electricity with the help of companies like DPW Solar Electric. However, most of the country doesn't receive enough sun to completely replace their energy consumption from other sources. This doesn't mean that installing a solar energy system isn't cost-effective.
- When making your decision, also take into account any available tax credits you may be eligible for by your conversion to solar energy. The federal government provides a 30 percent tax credit for solar energy, and there's no cap on the amount you can receive -- so whether you spend $5,000 or $30,000, you'll be able to get a third of that sum back at tax time.