As oil and gas executives in the US and abroad demand increased subsidies from their governments to increase energy production, the business world is turning its attention to green energy. While the infrastructure investment can be substantial, the cost of fuel for solar, tidal or wind power plants is zero, leading to a sizable return on investment. Green energy has ceased to be a matter for speculation.
The technology is mature, and full-scale projects exist in all parts of the world to demonstrate its effectiveness. What is not mature is the investment environment surrounding clean energy projects. In the US, oil, coal and gas companies benefit from Master Limited Partnerships, special investment structures that can be traded like stocks even though they are taxed like partnerships. Green power generators are excluded, since these companies must focus on depletable resources.
Another vehicle with tax advantages, the Real Estate Investment Trust, is useful to investors in everything from billboards to apartment buildings to oil pipelines, but not to wind and solar projects, at least not yet. When ways are found to exploit structures like these for the benefit of renewable energy projects, investment in the field can be expected to boom Companies like Hexagon Investments, founded by Denver financier Scott Reiman, already combine venture capital and real estate interests with oil and gas investments. It is not inconceivable that some of that venture capital will find its way into green energy projects in the very near future.