Energy and power are important components of any business. Most of the developed and developing economies of the world are net importers of crude oil. Oil from the Middle East and other producers meets most of the word’s requirements for energy. But oil is also associated with pollution and global warming. Experts feel that, sooner or later, developed and developing economies will shift toward renewable sources of energy. Moreover, this model could give stability and sustainability to economies as it prevents the effect of the volatility arising out of the Middle East’s conflicts.
In addition to these, terrorism has been a problem in the Middle East, with repercussions spreading elsewhere. As crude oil is assumed to be an important source of financial support for some groups, less demand for crude oil may slow down terrorism activities. Also, We’re in a digital economy where a change in demand patterns is determined by technology. People want to move with technology, and the latter requires power to run. This illustrates the need for a clean and portable power supply. In this case, power could come from fuel cells or solar energy.
FuelCell Energy (FCEL), Plug Power (PLUG), and EnerSys (ENS) are some of the US-based companies that manufacture and operate fuel cells. SolarCity (SCTY) deals with solar energy. ETFs like the Guggenheim Solar ETF (TAN), the PowerShares WilderHill Clean Energy ETF (PBW), and the VanEck Vectors Global Alternate Energy ETF (GEX) invest in renewable energy. The graph above shows the performance of the PowerShares WilderHill Clean Energy ETF in 2015.
In the next part of our series, we’ll analyze the moving averages and analyst estimates for these companies.