Photo:Ben Bawden, Creative Commons, Flickr
The drive for carbon reduction has many critics. Brace yourself for a heated lecture if you are lucky enough to bump into one of these critics at your next house party. They will spend hours telling you about the true origins of global warming, and they will blame rising food prices on the push for biofuels.
I must admit that my enthusiasm for green investing took a knock after reading Lehmans recent climate change report. The author performed cost-benefit analysis on various green technologies and came to the conclusion that the costs of green investing far outweigh the benefits. As an example, the report calculated that every $1 benefit from solar power costs $130 in taxpayer subsidies in some cases. The author showed that switching light bulbs is a more efficient way to cut carbon emissions than solar power, prompting several observers to ask how many bureaucrats it takes to change a light bulb.
After reading the Lehman report I thought that we, at The Panelist, might as well pack our bags and start a website called BuyYourLightBulbsHereAndSaveThePlanet.com. If, as environmentalists, we have had trouble convincing critics that global warming exists, how are we ever going to get them on our side? Especially if they have cold hard numbers to back up their opposition?
Id like to think there are no problems, only solutions. And when morale gets low, bring out the cheerleaders! I cant really think of a better cheerleader than FPL Group (FPL Last trade $62.26). When this utility, expecting annual average EPS growth of 10% through 2012, invests $2.4 billion to increase its solar energy output it is a massive vote of confidence in the future of solar.
Why am I excited? FPL has a track record of profitability and has invested heavily in green technologies. This isnt just a PR blitz from another unprofitable company trying to jump on the green bandwagon. FPL has invested in green technologies and they are seeing the benefits.
FPL has reduced the base rate portion of customer bills, which covers what customers pay for electricity use, by 16% since 1999. The company recently announced that residential customers will see rates declining beginning January 2008 as a result of the companys greater efficiency. This will be the second year in a row that FPL has reduced rates in spite of the price volatility in world fuel markets and continued growth demand in its service territory.
The bottom line: FPL is a profitable company because it invests in profitable projects. FPL is a cheerleader at the front lines of green investing and it has to answer to shareholders. FPL has a track record of investing in green technologies, it has seen the benefits, and it will continue to invest. And so should you.
Disclaimer: I do not own FPL Group, I don’t own a solar panel.