| One of the problems that has plagued us in | | | | strategy, right? |
| creating and using alternative energy is the | | | | |
| costs associated with making and installing | | | | So why has wind power history shown constant |
| wind turbines or solar panels. This only | | | | reluctance from investors to provide money? |
| makes them cost-effective for the long term, | | | | Well, it has little to do with any aversion |
| and that doesn't match the lives of most | | | | to wind power or lack in faith in it as much |
| people who, on average, move once every five | | | | as it is an aversion to a common problem with |
| years. On top of that the business side of | | | | private equity. |
| the equation makes it difficult and risky for | | | | |
| investors to fund the alternative energy | | | | The Problem with Private Equity |
| companies. | | | | |
| | | | Unlike publicly traded funds, private equity |
| Private Equity Funding | | | | funds can not be sold or dumped. That is, if |
| | | | you purchase a publicly traded stock you can |
| One of the difficulties that wind power has | | | | sell it anytime you want. With private |
| faced throughout its history is the fact that | | | | equity, you are stuck for the whole duration |
| the research and development money required | | | | of the investment as it is an illiquid |
| to expand the growth of the industry comes | | | | investment into a business. |
| from high risk private equity funding. That | | | | |
| is to say, those companies who have a vested | | | | So, if you are not making any money from the |
| interest in the development of wind power are | | | | investment, you cannot get your money back. |
| often privately held companies that are not | | | | Sadly, throughout wind power history many |
| publicly traded. In such an investment, the | | | | people have felt uneasy in investing. |
| investment is "paid off" in residual income | | | | |
| via dividend payments over an extended period | | | | This is a shame as many people who have |
| of time. | | | | invested in private equity alternative energy |
| | | | companies have made huge amounts of money. |
| For example, if one invests $20,000 in a wind | | | | However, it will be difficult to get the |
| power company the investment will cover a | | | | masses to invest with such risk, making it |
| seven year period. During this seven years as | | | | difficult for the wind power companies to |
| the company takes in money in the form of | | | | operate at their full potential. |
| profits it will pay out dividends during this | | | | |
| seven yea period. Hopefully, by the end of | | | | There is no doubt that somehow we need to try |
| the seven years the payments will not only | | | | and solve this financial problem plaguing the |
| cover the initial investment, but also | | | | history of alternative energy and wind power. |
| provide a percentage of interest that would | | | | Until we do, it is going to be difficult for |
| exceed what one would earn in the stock | | | | alternative energy to be cost-effective |
| market. Sounds like a reasonable investment | | | | enough for the masses to benefit from. |