As I have discussed many times in the past regardless of what one thinks of the clean energy transition, investments in the sector have been terrible lately. Robert Bryce has written an excellent article with charts showing alternative energy investments’ bloodbath.
The energy transition isn’t. Despite years of unending hype, hundreds of billions of dollars in federal tax credits, and some $600 billion spent on wind and solar in the U.S. since 2004, investors are abandoning alternative energy in droves.
As the Wall Street Journal noted last week, “Rising financing costs and prices for equipment make it harder to develop clean-energy projects as industry investors increasingly weigh the risks of providing capital against the benefits of reducing carbon emissions.” The article continued, saying wind and solar companies are “finding it more difficult to secure financing than at any time in the past decade.” It also quoted David Foley, a senior managing director at Blackstone, who recently told attendees at an energy conference in New York that, “The irrational exuberance, all the excitement about clean energy is clearly getting squeezed out.”
In the meantime, oil and gas, coal, and nuclear energy are still undervalued. Sell overvaluation and buy undervaluation.