Of the 340 sustainable energy companies I track, 64% of the market value is in the solar PV producers and the wind technologists and wind farm operators. Everything else, from ethanol producers, LED technologist, to advanced battery makers accounts for 36% of the market. Wind and solar compete in the electric generation market which is dominated by coal, nuclear and natural gas power stations. Crude oil prices only indirectly affect the markets for wind and solar by dragging along natural gas prices and influencing policy makers to provide subsidies to wind, solar, and everything else “clean energy” when oil prices go up. And these subsidies eventually set the stage for the entry of more public companies.
So what is happening recently? Oil prices are on their way to setting an all-time record high on an annual basis. A few years back this translated into IPOs but examining the chart below that’s not happening, at least so far, with this year’s run up in oil prices.
Solar and Wind IPOs by year
Collectively the lingering hang-over from the Panic of 2008, a maturing of the industry, and a decrease in subsidies in some markets has clearly reduced the opportunities for companies to enter the public markets. That said, the existing companies seem to have gotten stronger compared to a few years back and if they are able to maintain the favorable governmental treatment they should continue to increase their market share.