EDITORIAL
Be Leery of Investing in Failing Green Solutions
By Anthony Wile - February 01, 2014

Is the Green marketplace foundering? It would not be surprising. This happened in the 1970s when the first wave of solar panels and wind turbines were securitized and the "alternative energy" industry was in large part created.

Recalling the 1970s, we've been consistently suspicious of the resurgence of the "renewables" industry. For one thing, many of the companies seem to have considerable various government inputs – grants, loans, etc. This is not a healthy sign.

For another, there doesn't seem to be an overwhelming groundswell of demand for these kinds of solutions. They arrived in the 1970s during the "golden bull" – when gold and silver were on the rise. And the 2000s have provided a similar schematic.

On the surface, perhaps, it seems logical. An upsurge in investment interest in gold and silver might extend to other kinds of commodities and also alternative energy options. But for me, this is a kind of directed history. These energy solutions seem derived, even forced.

Der Spiegel, for instance, recently carried an article entitled "Wind Power Investments in Germany Proving Riskier than Thought," that shows the difficulty that investors are having in profiting from alternative energy, specifically wind power.

Gone With the Wind: Weak Returns Cripple German Renewables … Investments in renewable energy were supposed to be a sure thing, with wind park operators promising annual returns of up to 20 percent. More often than not, however, such pledges have been illusory – and many investors have lost their principal to boot.

… Indications are mounting … that green capitalism will not be able to meet all expectations. In courts around the country, complaints are mounting from wind park investors who haven't received a dividend disbursement in years or whose parks went belly up.

Consumer protection activists are complaining that many projects are poorly structured and lack transparency. In the renewables sector, fear is spreading that the Prokon bankruptcy – combined with plans for a reduction in the guaranteed feed-in tariff recently released by new German Economy Minister Sigmar Gabriel – could scare away investors.

Much of the concern is focused on the large number of projects that are financed by the investment model known as closed-end funds. As a rule, they run for a 20-year period and are open to a limited number of investors.

The article goes on to explain that closed-end funds promise annual dividend payments but that when it comes to wind park enterprises, about half are in such bad shape that investors may not even get their initial placement returned after 20 years. Of course, accounting for inflation, this initial investment would be a good deal less than the initial value.

The study of 1,150 annual reports comes from Werner Daldorf, head of the Investment Committee at the German Wind Energy Association. … Taken together, it allows for an unprecedented look at the business affairs of over 170 commercial wind parks over the course of more than 10 years. The result is sobering.

… Even if returns were to increase dramatically in the coming years – a possible result, for example, of funds paying down their debts – only wind parks in the best locations are likely to prove profitable. The picture becomes even worse once one digs into the details.

A fifth of all wind parks for which more than 10 years of annual reports are available haven't once paid their investors a dividend exceeding 2 percent of their investments. Daldorf's findings are surprising given the substantial subsidies the state has provided to renewable energies over the years.

Wind power is not alone in creating questionable results. Over at Resilientearth.com, I found an article entitled "Solar Power Failing World Wide." In this case, the culprit seems to be the technology itself.

… When solar panels start failing in two or three years the economics of solar power collapses like a house of cards. That is exactly what is happening around the world. Cheap Chinese solar panels have flooded the market and are now starting to fail at an alarming rate.

Worldwide, solar power adopters are reporting similar problems and say the $77 billion solar industry is facing a quality crisis. Bright sunlight is illuminating the scam that is solar power just as industry boosters claim solar is on the verge of widespread adoption.

A recent article in the New York Times, normally a green power booster, has exposed a growing scandal at the heart of the solar power industry—solar panels are dying long before their expected lifetimes are up. No one is sure how pervasive the problem is because there are no official industry figures about defective solar panels.

Over at Breitbart, I found an article entitled "Energy Subsidies Are Going to Junk Investments."

Since 1973, U.S. government agencies have spent $154.7 billion on "renewable energy" with very little to show for it. Proponents of solar technology claim that their favored technology is on the verge of being competitive with traditional forms of energy, but they have made the same claim since at least the mid-1990s. Billions of dollars in subsidies later, solar still only comprises at most 0.2 percent of U.S. electricity production according to the Energy Information Administration.

We've often posited that the alternative energy sector is being promoted because it fits into a larger globalist schematic. The dominant social theme is one of both scarcity and pollution; the solution is, of course, "clean" energy and "alternative" energy options.

Main ideas (among others) surrounding alternative energy – from a standpoint of societal control – involve so-called smart meters and carbon exchanges. Both of these concepts are in trouble, but are doubtless still being energetically pursued.

The idea behind Smart Meters is that every aspect of a person's energy consumption can be monitored and monetized. Carbon exchanges monetize so-called carbon pollution that is heating up the world – if warmist documentation is to be believed.

As a skeptic when it comes to both alternative energy trends and solutions, I'm certainly not disappointed to see difficulties in implementing both smart meter technology and carbon exchanges. Of course, the globalist impulse remains – and continues.

And as we've pointed out before, the current "Wall Street Party" (which we've discussed at length) is being partially positioned to support a flood of Green IPOs.

These solutions may be questionable but they will doubtless gain credibility from being funded by the "market." If our analysis of the Wall Street Party goes as expected, a swelling market mania will lift these Green offerings the way the market bubble of the 1990s lifted Internet/tech offerings.

Of course, those offerings mostly failed in the market crash at the turn of the decade and this Green marketplace manifestation may well founder in the near future. But the foundering will be expensive for investors who have not been paying attention.

These may well be the same sort of investors who have been investing in environmentally related closed-end funds – and who will not be able to resist the lure of IPOs. Yet they would do well to look elsewhere – to more trusted sources offering real innovations.

These may be difficult to discover, but they do exist.

Very shortly, we will be introducing a free early-warning intelligence service called Investors Edge that can help you (i) protect your money from destructive monetary inflation, confiscatory taxes and crashing economies, and (ii) make better, more profitable investment decisions.

We look forward to introducing great investment ideas to you and, in addition, providing you the opportunity to directly invest alongside High Alert as we structure financial partnerships with those rare few investment opportunities that are uniquely positioned to deliver outstanding investment returns.

Stay tuned… we intend to show just how powerful free-market thinking can be when combined with a little human action.

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