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TransAlta Corporation (USA) (TAC), SunPower Corporation (SPWR): Three Ways to Invest in Renewable Energy

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Renewable energy accounts for approximately 16% of total energy consumption. While most of that is provided through biomass and hydroelectricity, there are smaller segments of renewable energy — such as wind, solar and ethanol. These smaller segments of green forms of energy present a considerable amount of opportunity for investors, who could potentially get in early on a power-producing segment that hasn’t fully caught on.

TransAlta Corporation (USA) (NYSE:TAC)

While these stocks pose a lot of potential upside, they are also risky, due to the fact that what they produce isn’t yet used by the mainstream and, therefore, these companies don’t have a reliable stream of revenue. Then again, neither do traditional ways of producing energy, due to the global trend towards environmental friendliness.

Investing in wind

Wind energy is still very much a speculative industry, but several publicly traded companies are making major headway.

TransAlta Corporation (USA) (NYSE:TAC) is Canada’s largest publicly traded renewable energy company and looks to be committed to the environmentally friendly generation of energy.

A lot of the potential construction that TransAlta Corporation (USA) (NYSE:TAC) is planning is in wind energy. The firm announced its plan to expand merchant capacity in Alberta. The difficulty the company may experience in that expansion is the legislative challenges. That could make it difficult for the company to take advantage of declining construction prices. However, the firm can find shelter in the fact that its gas plants in Alberta are expected to be completed soon, after the firm partnered with Berkshire Hathaway Inc. (NYSE:BRK.A). The company can also realize growth in the western grid of Australia, an area that TransAlta Corporation (USA) (NYSE:TAC) gained capacity in early this year.

Investing in solar power

Solar energy is a very realistic option for producing energy on a massive scale, as has been proven recently by the UK government’s proposal to develop a solar energy epicenter that spans 100 Olympic parks.

SunPower Corporation (NASDAQ:SPWR) has a business model that is vertically integrated. This allows the firm to attain major projects throughout the U.S., in which construction is supposed to be finished by 2016. SunPower Corporation (NASDAQ:SPWR) is the most efficient in the industry at converting sunlight into energy. While there has been a downturn in the solar industry, SunPower Corporation (NASDAQ:SPWR) has the capital that it will take to make it through these difficult times.

The industry’s dark days could be turning around, as the firm managed to increase year-over-year revenue by 28% in the first quarter.

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