Thursday, January 31, 2013

Clean Technology - The New Bubble?

When it comes to investment "bubbles" we've recently experienced two major "popping" incidents. The first was back in the late Nineties with the technology bubble popping leaving a wreck of literally hundreds of online startup businesses.

The second was the housing bubble from the early 2000s. We're still feeling the impact of that bubble bursting.

Now there is a worry that clean technology will be the new fragile bubble. However, there are indications that would point in the direction of longer lasting investment opportunities with clean technology businesses.

Here's why:

Clean technologies get paid first.

Unlike the internet companies who were offering free services, most clean technology companies like those making and installing solar panels are paid up front for their services. In other words, nobody is giving away a solar energy system for free in the hope you'll buy another one. The potential drawback is that for these businesses to succeed they will require a serious investment from the consumer. This brings up the need for a strong marketing campaign to make sure the consumer understands all the money-saving benefits of clean technologies down the road.

It's good for the planet.

At the heart of any green technology is the desire to make the world we live in a better place. By reducing our dependency on fossil fuel burning forms of energy we can make important strides in protecting our fragile eco-system. That approach holds a lot of appeal for many folks. We might not need to buy a luxury item from some online web store but we should all be interesting in preserving the environment. This makes clean technology more of a "calling" as opposed to a "fun fad" and that is going to increase its longevity as a business.

Government support.

For the most part, governments have stayed out of online businesses. It also seems that any government involvement in the real estate industry has had dubious effects. However, with clean technology the government can play a vital role in terms of offering support. Not only have they been providing loan guarantees to clean technology business but there have also been tax credit incentives to spurn consumers into investing. The partnership between the government and clean technology appears to be in for the long haul.

Slow and steady growth.

Unlike the internet and housing bubbles, nobody is going to become an instant millionaire in the clean technology industry. That doesn't mean you can't find success but the approach is one of slow and steady growth. That removes a sense of urgency in investors looking for overnight returns. Smart investors understand the nature of the clean technology business model and will make the appropriate decisions towards infusing those industries with the needed capital.