Renewable Investments

We often see the question "Why invest in solar" or "What makes solar a good investment". You could extrapolate that to "What makes renewables a good investment". It is necessary to write a post about this topic because the short answer is : They are either no investments, or the only type you can really make. The way we think about allocating resources (investing) is so deeply ingrained and accepted that it is hard to pry open the concept and pour some light in, but here goes.

Normal investment works like this : You get a buch of Euro’s or Dollars (your own reserves you invest or a loan), you spend them on products (say a copy machine), you get money for the use of those products (people pay for copies) and that is how you pay/earn bcak your loan/investment. This has been the model for decades, it seems to be how everyone understands investment works. But this is not investment, it is consumption. Even if you get money for allowing people to use your copy machine the only thing going on is consumption. You consume paper, plastic, electronics, electricity, so coal/gas, diesel for the paper logistics, the car of the maintenace guy, the meat he buys for his BBQ, the dirty kerosine burned in the engines of the containership that brought the copier from China to the US. consumption consumption consumption. Nowhere during the lifecycle of your investment is anything produced that replaces or replenishes the ‘reserves’, maybe the paper mill plants new trees, but that’s doubtfull.

Investment used to work differently. It used to mean that you go out and invest in some labour (pay them with savings) to work land to harvest crops that would add to the real food inventory (a type of energy inventory). You would sell the crops on the market for a fair price (causing a tiny amount of deflation, because the amount of money did not change) and had food to eat, and reserves to do this again.

You invest with a profit if you are left with more than you began with after the process is done. If you are left with less, you consumed

Now most investments these days are actually wild jumps into completely waste. Build a road? At the end you are left with a road that will cause more cars to burn more fuels, wear out more tires, cause more accidents, damage more nature. The whole process seems to come at the cost of the money invested, but it doesn’t. It comes at the cost of the resources consumed. If towns along the new road start booming that is because they now draw money away from other places. That money is then spend in the towns, to build stuff, do all kinds of upgrades all consumptive, all wastefull. It seems there can be no good done according to us but this is a fact of our modern economy : It is geared to consume, mainly fossil fuels.

Now this could all be different, but because there is one category of product that really pushes itself into every economic nook and cranny, fossil fuels, it is not. Because our economy is ‘carbon based’ it uses fossil fuels in nearly every step from mining to production to logistics to marketing and sales to consumption. And because of that the economy is extremely wastefull. Why? because if you make a milk bottle once and use it 20 times before it breaks, you burn gas to blow it only onces in a while. While if you use plastic containers to ship the milk you make and sell a container every time, you buy a petrochemical product with your milk, one you throw away. That process generates better cashflows for the carbon industry than using glass bottles. The economy is the maximization of the utilization of fossil fuels.

Now suppose a grocery store buys a solar panel plant that generates lots of electricity. It ‘invests’ in that plant. It then has to pay back the loand over a number of years. When the loan is payed of it is now custom to also destroy the asset! But you don’t you leave the plant running for another 20 years. In that time you are ADDING to the total reserves. You can use the now free electricity to clean glass milkbottles and collect them and bring the back full to the doors of your customers. You electric milk car doesn’t cost anything to run, except a bit of maintenance you pay for with milk credits?

Say you use the electricty to make fertilizer to grow more grass for the cows. More than there was before, at zero cost. Or you use it to pasturize it, and sell it at a lower cost than gas heat pasturized milk. This solar power plant keeps adding to your wealth, and you don’t have to pay for it, your reserves are growing depending on how you utilize the energy. This is real profit, yield, return on investment. The other stuff with fossil fuels is wasting resources.

So should you invest in renewables? The answer is of course YES. You only invest if you invest in renewables or some process with a net positive resource balance. Don’t look at money, look at what usefull raw materials come out of the whole thing. If you see our point you will realize the whole ‘investment community’ is a buch of malarky that doesn’t add any real value to society, the fate of humanity, on the contrary. It is an industry focussed on getting a cut of whatever resources are sacrificed and wasted, and making sure fossil fuels get to every last valuable object or resource on Earth, and consumes it. 

Rather than thinking highly of investment bankers building mega projects we should look at the actual material yield they realize. If it is negative the whole thing is a cost to an already overburdoned planet. We should not allow it. The ‘Circular Economy’ is one type of solution to improve things, but it won’t be improved until the use of fossil fuels has become an option, not a given. For that to happen we need to have more renewable energy sources.

So not only is investing in renewable energy one of the few real investments, it is also the way towards turing our options of allocating our resouces back from being wastefull by definition, to possibly creative, regenerative, accumulative and adding to our reserves and security. 

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