Suppose you were an owner of renewable power in California and you posted a “for sale” sign on your front door. Whom do you suppose would show up as an interested buyer? A) A California utility (PG&E, SDG&E or Southern California Edison)? B) A bank (Morgan Stanley, Bank of America, Citi, Wells Fargo)? C) Venture capital (there are lots of hedge funds and private equity out there – too many to name even a few)? D) Foreign companies?
The answer is all of the above. But perhaps most interesting is the fact that there have recently been strong interest and indeed significant investment by British, Spanish, German and Irish companies to name a few. Of particular interest here is the fact that it may well be this foreign influx of capital that actually winds up owning the green generation that we are so thirsty for.
As battered as the dollar has been, and with the strength of the Euro, this is a good thing on many levels. Good for us, and great for trade – actually could help the world economy to see this kind of diversification.
But of course, none of this is without danger, so we should all be concerned – at least tacitly. Fluctuations of markets create strange instabilities in the way money circulates and you might well wind up with a number of companies that find themselves so frustrated with the realities of regulatory hurdles that we love to create in the States that some of these guys will throw their arms up and give up. Then what?
Well, then we are back to square one. In the meantime, let’s watch the foreign interests come in and kick the tires. Weakened balance sheets will provide for some attractive potential buys – particularly in the renewable sector – solar or wind anyone? As a believer in free markets and international trade, I hope they find success.
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