By Steve Goreham
Originally published in RealClear Energy.
Headlines promote renewable energy equipment companies as part of efforts to transition to Net Zero carbon dioxide emissions by 2050. Wind and solar system providers, electric vehicle manufacturers, green hydrogen producers, and other green equipment firms form a growing share of world industry. But renewable equipment firms suffer poor market returns, so investors should beware.
The Renewable Energy Industrial Index (RENIXX) is a global stock index of the 30 largest renewable energy industrial companies in the world by stock market capitalization. Current RENIXX companies include Enphase Energy, First Solar, Orsted, Plug Power, Tesla, and Vestas.
IWR of Germany established the RENIXX on May 1, 2006, with an initial value of 1,000 points. This month, the RENIXX stood at 1,013 points, essentially zero value growth over the last 18 years. In comparison, the S&P 500 Index more than quadrupled over the same period. The RENIXX is down three years in a row from 2021, losing about half its value.
Wind turbine manufacturers faced serious financial challenges over the last three years, even with rising sales. Rising costs, high interest rates, and project delays continue to impact the profitability of wind projects and equipment suppliers. The stock of Denmark-based Vestas Wind Systems, the world’s largest supplier, rose only 7% over the last 16 years, and its stock price has fallen 58% from a high in 2021. Vestas struggled to make a profit in 2022 and 2023 and suspended dividends to shareholders.
Other major wind suppliers have also been poor investments for shareholders. The stock of Siemens Gamesa, the number two turbine maker, is down 65 percent since a peak in 2021. Gamesa reported a loss of €4.4 billion in 2023 and received a €7.5 billion bailout from the German government that same year. Other top wind suppliers suffered major stock price declines since 2021, including Goldwind of China (down 77%) and Nordex of Germany (-36%).
Eighty percent of the world’s solar panels are manufactured in China and the top six suppliers reside in China. The solar panel industry is beset by overcapacity and severe competition. Stock prices of the top seven suppliers have all declined by more than 50 percent since 2021. The stock of US firm First Solar has risen since 2021 but remains below its all-time high price reached in 2008.
Tesla, which was founded in 2003, remained the only pure-play, publicly traded EV stock until 2018. By the end of 2021, Tesla’s value had soared to over $1 Trillion, boasting a market value more than Toyota, Volkswagen, Mercedes-Benz, General Motors, Ford, BMW, and Honda combined. But Tesla is the exception.
But in most cases, electric vehicle (EV) companies have been very poor investments. Between 2020 and 2024, 31 EV companies went public on US stock exchanges. Only one of these 31 companies, the Chinese firm Li Auto, saw its price rise since the initial public offering (IPO). Thirty EV firms saw their stock prices fall, most precipitously.
EV company price declines from the IPO price include Fisker (-99%), Nikola (-94%), NIO (-50%), Lucid Group (-75%), and Rivian (-88%). Six others of the 31 companies went bankrupt. Tesla and Chinese firms BYD and Li Auto are the only EV firms profitable today.
ChargePoint is the world’s largest dedicated EV charger company (behind EV manufacturer Tesla), with over 25,000 charging stations in the US and Canada. ChargePoint went public in 2021 by merging with Switchback Energy Acquisition Corporation, valued at $2.4 billion. The firm’s value today is about $585 million, down 76% since 2021. For fiscal year 2024, ChargePoint lost $458 million on revenue of $507 million.
It’s not clear that any charging company can make money. High-speed, 50-kilowatt EV chargers cost about five times as much as traditional gasoline pumps. Eighty percent of EV charging is done at home, reducing the demand for public charging. ChargePoint, EVgo, Wallbox, Allego, and Blink Charging are all valued today at small fractions of their original IPO price. No EV charger firm is profitable, even after continuing to receive large government subsidies.
Plug Power is a leading supplier of hydrogen energy systems, including battery-cells for hydrogen vehicles and electrolyzers to produce green hydrogen fuel. Founded in 1997, the company went public in October 1999 at a split-adjusted price of about $160 per share.
But during its 27-year history, Plug Power has never turned a profit. According to financial reports, the firm lost $1.45 billion in 2024, up from a loss of $43.8 million in 2018. Its current stock price is under two dollars per share.
Traditional established firms are finding that renewable equipment can be poor business. In 2023, Ford lost $4.7 billion on sales of 116,000 electric vehicles, or over $40,000 per vehicle. General Electric’s wind turbine business lost $1.1 billion in 2023.
The US federal government provided subsidies to renewable equipment companies of between $7 billion and $16 billion per year between 2010 and 2022. But the Cato Institute estimates that because of the passage of the Inflation Reduction Act in 2022, subsidies will skyrocket to about $80 billion in fiscal year 2025.
Without the fear of human-caused climate change and a rising level of government subsidies and mandates, many of these green companies would not exist. It’s doubtful that carbon dioxide pipelines, heavy electric trucks, offshore wind systems, green hydrogen fuel equipment, and EV charging stations would be viable businesses in unsubsidized capital markets.
During this last year, leading financial firms pulled back on their climate change pledges. Bank of America, JP Morgan, State Street, and Pimco withdrew from Climate Action 100+, which seeks to force companies and investment funds to address climate issues and adopt environmental, social, and governance (ESG) policies. But it’s difficult to invest in renewable equipment companies when they are losing money.
Steve Goreham is a speaker on energy, the environment, and public policy and author of the bestselling book Green Breakdown: The Coming Renewable Energy Failure.
The coal company, Consul Energy, is up almost 500% in the past 5 years and pays a nominal dividend to boot.
“But during its 27-year history, Plug Power has never turned a profit. According to financial reports, the firm lost $1.45 billion in 2024, up from a loss of $43.8 million in 2018. Its current stock price is under two dollars per share.”
How does this company continue to exist?
Suckers and bag holders.
A great narrative.
No kidding. It won’t. Holding on by a thread. Never saw any value in companies that relied on government subsidies for their success. At my age, value investing and dividends make-up my portfolio. Looking forward to seeing this collapse. Hopefully, we can get back to reason, instead of the “irrational exuberance.”
How does the company continue to exist?
They have large farms on which they grow and harvest Subsidies
How does this company continue to exist?
Because we are selling the coal to China.
“The stock of Denmark-based Vestas Wind Systems, the world’s largest supplier, rose only 7% over the last 16 years, and its stock price has fallen 58% from a high in 2021. “
A lot of cherry picking there. Wind was a small business in 2008, and so was Vestas. It peaked just before the GFC. But it grew a lot in the later years, and so did the stock price. Here is the whole picture of price alone:
And here is a graph of market cap:
I don’t know what to make of the volatility between nid 2021 and end 2022. But obviously a lot of investors have done well in the post GFC years.
It’s a13th century technology Nick, only resurected to alter the Climate, as shown in this graph. Money will spent?
Why Are Renewable Equipment Companies Such Poor Investments?Because the products they produce are basically ineffective POS
Hasn’t made a single dent, because the wind turbines are fossil fuel guzzlers in their manufacture, installation, maintenance, and final disposal at end of their short life.
But… but… China’s “carbon pollution” doesn’t leave that nation. /s
Once the subsidies end indeed
“a lot of investors have done well”
Carried by massive government mandates and subsidies, and completely “no-problem” attitude to environmental damage and avian life decimation.
The Wind industry scam would not exist without them or if it were held responsible for the damage done..
ps…. Are you calling for and investing in wind turbines on the hills around Moyhu yet ??
“the volatility between nid 2021 and end 2022“
I’ll guess a charting error. Check a different source.
Vestas Shares Drop After Profit Warning as Costs Rise – BNN Bloomberg
And of course that isn’t the only Vesta Wind collapse.
‘Serious event’ | Vestas turbine collapses at Iberdrola wind farm in Australia | Recharge (rechargenews.com)
Wind Turbine Collapses are Supposedly Rare, but Several Have Occurred – IER (instituteforenergyresearch.org)
Warranty claims have driven all the major wind turbine manufacturers to the brink of bankruptcy. Re-powering is a technical disaster.
Government bailouts ON TOP OF subsidies.
https://www.msn.com/en-us/money/companies/siemens-energy-clinches-state-guarantees-as-it-posts-a-46-billion-euro-annual-loss/ar-AA1jX3kD
Yes if they sold their early holdings. 😉
All that money in the climate trough….. bribes, corruption, subsidies etc etc…
.. yet people accuse us realists of being on the “fossil fuel” payroll.
Which we most certainly are not.
But not nearly as much cherry picking as the ole fraudster, Manny!
And you’ve got to be joking if you are trying to say wind wasn’t the upcoming big thing, spruiked by one and all politicians and renewables hucksters.
So we can add financial trends to the list of things you don’t understand and lie about.
OK, not Vestas but
Speaking to Reuters, Equinor’s head of renewables, Paal Eitsheim noted
“Its getting more and more expensive and we think things are going to take more time in quite a few markets around the world”
This came after Equinor decided to discontinue its offshore wind projects in Spain and Portugal, following an earlier decision to exit Vietnam.
https://www.offshore.wind.biz/2024/08/29/equinor-axes-offshore-wind-plans-in-spain-and-portugal-weighs-further-market-exits/
Plot the State subsidies the firm has received on the same graph. I think the results will be most interesting.
The failure rate for an offshore wind turbine is above 8 failures per turbine per year. This includes 6 minor repairs, 1 major repairs, and 0.3 major replacements. With 100 WTs, on average, one a month will need to be repaired.
Take the government out of the equation and they all go under. Government interference on this scale is a bad thing and can only make things worse.
You can hype AGW but you can’t hype renewable energy stock growth and people understand subsidies mean more taxes and more of their money not going to help them.
https://www.wind-watch.org/news/2024/09/13/utility-sues-ge-over-turbine-failures/
Story Tip
Biden’s ‘Record’ Energy Production Largely Due To Trump’s Oil And Gas Leasing Policies – Climate Change Dispatch
“It’s doubtful that carbon dioxide pipelines, heavy electric trucks, offshore wind systems, green hydrogen fuel equipment, and EV charging stations would be viable businesses in unsubsidized capital markets.”
The only doubt is when they are going to fail. The underlying business models are insane. They rely totally on subsidies. When those dry up it will be a bloodbath.
The only issue is whether it stays in that financial system, or it destroys actual economies when there is suddenly no power.
I believe that Warren Buffett had some observations about investments in wind & solar –
“without the subsidies and tax breaks, they just don’t make financial sense”
Don’t forget Tritium-
Tritium rise and fall: From $US2b to voluntary administration (afr.com)
Oz is going to become a renewables superpower now producing solar panels and batteries just you wait and see.
So far, the only company with a possibly positive profit handle on EV charging is … Tesla.
It is possible that Tesla made $3.3 billion from charging, since the company made $4.39 billion from the segment in which supercharger revenue is included, though it seems like a high proportion of these revenues.
https://seekingalpha.com/article/4611254-tesla-supercharging-revenues-but-at-what-cost
Reliable data — or any data — on renewable profitability is … scarce.
Doesn’t Tesla allow their cars to charge FREE at their supercharger stations?
Thought that was a perk of ownership.
Ownership is its own reward. Municipalities should start charging Tesla owners for the tens of thousands of gallons of water required to put one out, when it catches fire.
Another article that confirms that these companies are not “renewable”, nor do they provide net “energy”. If they were renewable energy companies, they would compete and be profitable.
Invenergy is the largest privately held renewable energy power generation company in the country.
Blackstone, CDPQ and Invenergy management are among the ownership group.
Rumor has it that the public sector retirement funds such as CALPERS have invested heavily
in their projects..
RE (Ruinous Energy) share prices will track Trump’s and Kamala’s poll numbers. Those prices will swing at least 25% based on the outcome. Lot’s of money to be made or lost. Buy or short?