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