Investing in Green Technology

Why might it be a good time to start investing in green technology?

Currently, green technology in general has all the signs of excellent market - high growth, increasing demand and technological advances. In fact, there is growing ammount money invested in green technology at the present.

Yes, but will it make money?

This is one thing that all investors want to know. It's not enough that it's probably producing less green house gas, maybe making the world a better place for our children. Is it making a profit in the long term?

"I don't see anything to derail the global need for clean water, clean energy and safer products,"

Rafael Coven, managing partner of Cleantech Indices LLC

"In Europe, Canada, the United Kingdom or Japan, you don't have to make the case that green investing can be profitable, because people there assume it. You do need to make that case in the U.S., because Americans assume the opposite."

Matthew Patsky, co-manager of Winslow Green Growth Fund (WGGFX) and lead manager of Winslow Green Solutions Fund (WGSLX).

(Quotes from Chicago Tribune, http://www.chicagotribune.com)

Below I've included some links to green Investment Funds that will probably be better equipped to answer that than I am.

Seems like a contradiction in terms. Clean coal consists of burning coal in the conventional way to create electricity. However in the process the coal and gas is 'cleaned' of impurities that contribute to acid rain.

According to the Global Environment Fund, clean coal and other technologies that focus on minimising negative impact can yield promising results for investors.

However, leading environmentalists and scientists like Tim Flannery have stated flatly "coal can't be clean."

From the outside at least, does seem slightly like more fuel to the fire to invest in clean coal. It could be that clean coal forms a bridge between old CO2 producing technologies and cleaner greener ones, which are still in their infancy.

Another option is investing in technologies like light sensors and computers to help machines run more efficiently. This comes under the 'every bit counts' heading. And while this doesn't have the glamour of a huge green energy power plant, the power of incremental technology should not be underestimated.

Interestingly, Bill Gates, Doerr (an early Google investor) AOL founder Mr Case and Amazon.com Inc have all invested significant funds into green technologies.

What is especially interesting is that these were all investors who picked up early on the internet as an emerging technology power. So their investment is green technologies might be a litmus test on whether green technologies are the next big thing, or not.

The facts: Last year, AOL launched Revolution LLC. This company has invested in companies that promote sustainable lifestyles. (For example the car-sharing service Flexcar.)

In November, Gates invested $84 million to finance the construction of five ethanol bio-refineries. Doerr and Amazon.com Inc. have set up a $100 million fund to invest in "green technology."

These are telling fund committments towards green technologies, from businessmen who have made their fortunes investing in new technologies.

There are a few things to think about when evaluating the green aspect of a technology.

For example, life cycle costing. It is becoming clear that to manufacture bio fuels can produce more greenhouse emissions than oil. In a classic case of missing the boat, some companies are actually cutting down forests in order to grow bio fuel. After harvesting the corn/mustard seeds needed for bio fuel, the excess plant matter is often burned, ready for the next crop. This creates...CO2, one of the main suspects in climate change.

It's always worth questioning the desired outcome and the means to get there.

Solar panels are quite energy intensive to make. They require machining, aluminium and silicon. Extracting all these materials requires energy, usually coal or oil generated. However, it's estimated that over the life of the solar panel, this energy is offset by the clean renewable energy the panels produce.