“We are like tenant farmers chopping down the fence around our house for fuel when we should be using Nature’s inexhaustible sources of energy — sun, wind and tide. … I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.[1]Thomas Edison

In that 1931 conversation with Henry Ford and Harvey Firestone, Edison prophetically described the potential of solar energy to be used to supply society’s energy requirements. And with the help of government subsidies and a greater emphasis on the importance of sustainability by the Obama administration, the solar industry is off to a fast start in 2013 as ETF’s Guggenheim Solar and Market Vectors Solar Energy are up 20% this year.[2]

There are many attractive features of solar energy, led primarily by the almost infinite amount of raw energy provided by that thing called the sun. In addition, solar panels are becoming cheaper to manufacture and last around two decades, which creates a tremendous amount of value over the life of the product (not to mention the tax advantages of owning a solar paneled system). Lastly, solar energy panels provide a clean source of energy to power your entire home without the expense to the environment – at least so we thought.

According to a recent yahoo article, the solar industry may have a dirtier side after first glance. Because of government subsidies, solar panel manufactures are incentivized to produce as many units as possible. However, one of the major downsides to this is amount of sludge and contaminated water from the manufacturing process.[3] And because a majority of these companies are startups with huge overhead costs and are heavily invested in research and development, firms are unable to build storage facilities for this waste, which forces them to ship the contaminants across state lines to waste facilities hundreds and sometimes thousands of miles away.[4]  Lastly and most shockingly is the fact that the transport of the waste is not calculated into the products’ carbon footprint, which is the quantitative figure assessing the product’s ecological impact across the timespan of its inception to its destruction. It is a bit hypocritical for companies, which have a green initiative as an alternative energy source, to be so nonchalant about a green calculation with such great significance.

What is also striking is the industry-wide lack of transparency regarding the carbon footprint of the solar companies. “The Silicon Valley Toxics Coalition, a watchdog group created in 1982 in response to severe environmental problems associated with the valley’s electronics industry, is now trying to keep the solar industry from making similar mistakes through a voluntary waste reporting “scorecard.” So far, only 14 of 114 companies contacted have replied.[5]

That being said, as an alternative energy source, solar energy is still the cleanest and most reliable. Compared to coal and natural gas derived energy, solar produces ten times less pollutants, and as mentioned previously, with a twenty year life expectancy for panels, provides a great source of energy for a significant length of time. The oversight of not including transportation costs may be a harmless and overlooked nuance that has not jeopardized lives. Yet, as a writer for an information sharing blog, the lack of transparency leaves a bad taste in my mouth and changes need to be made to provide consumers with the most up-to-date information. The solar industry as a result of this report cannot hide behind the veil of purity in doing green work, while simultaneously producing inefficient carbon footprint “scorecards”.  Only when the industry makes amends to change its behavior in reporting information can we as consumers feel confident in living green, and being green.


[1] http://en.wikiquote.org/wiki/Thomas_Edison

[2] http://finance.yahoo.com/news/solar-industry-impressing-investors-gains-132000140.html;_ylt=A2KJ2UiI.h9RZ0gAlDbQtDMD

[3] “In many cases, a toxic sludge is created when metals and other toxins are removed from water used in the manufacturing process. If a company doesn’t have its own treatment equipment, then it will send contaminated water to be stored at an approved dump.”

[4] http://news.yahoo.com/solar-industry-grapples-hazardous-wastes-184756813.html;_ylt=A2KJ2UZE9h9RPGoAWB3QtDMD

[5] See id no. 4

You probably are familiar with the old adage, “put your money where your mouth is”.  This saying definitely applies to the green movement.  Green initiatives require an enormous financial commitment to develop and advance the technologies necessary to address the issues of climate change and to reverse the pollution of the Earth.  Statistics collected in Global Trends in Renewable Energy Investment 2012 Report, a study backed by the UN Environment Program, have tracked financial investments in green energy globally since 2004.  These statistics reveal the following:

  • Investment in renewable energy accounted for 44% of all new energy generation capacity added last year.  This represents an increase in renewable investment, up from 34% in 2010 and 10.3% in 2004.
  • The majority of the money invested in renewable energy came from the private domain and largely was invested in the area of research and development.  In fact, investment from the private sector was twice that of government and public bodies.
  • The renewable energy sector of emerging economies, such as India and China, has the biggest boost.
  • In 2009, China surpassed the United States in total annual investment, and in 2011, it attracted more money than any other country.

While these statistics show a financial commitment to the green movement, statistics indicate that investment in green initiatives still lags behind that of traditional sources.  In 2011, only 6% of the world’s energy requirements were generated by renewable sources.  A caveat to this situation is that many clean tech companies have suffered from the volatility of the markets over the past two years, and in many countries, policies established to encourage investment in renewable energy have been weakened by austerity measures undertaken to upright faltering economies.

When considering investing in renewable energy or other green initiatives, the due diligence requirement cannot be understated.  Thorough understanding of this market sector is mandatory.  For example, it is important to know that these markets require government confidence and commitment in order to be successful.  Financiers require stable policy to back green investments.  It is important to identify mature technologies because they have longer track records.  These often include onshore wind and solar energy.  Remember:  Lower technological risks equal more finance.

Investing in renewable energy and green initiatives presents potential opportunities for financial gain, as well as moral commitment to the green movement.  As with any investment, make sure you do your homework and seek professional advice so that you understand the many factors involved.  A place to start your journey to green investments is: http://www.sustainablebusiness.com.

Let’s live green, be green!

Due diligence– Prior to investing in any commodity, do your homework, and if necessary, seek professional financial advice.