Energy Efficiency Goals are Powering Big Utility Spending (GRID)
Fitch Ratings recently came out with a report that Renewable energy now accounts for 9.1% of total electricity produced in the United States. Alternative and green sources of energy are projected to grow by 17% of electricity market share 2035. This is having dramatic effects on utility spending.
In order to beef up energy efficiency and integrate these forms of greener energy into the grid, utilities have increased their transmission investments over the last ten years, more than doubling between 2000 and 2010. In order to avoid another massive blackout as with the now infamous 2003 Northeastern blackout, another key driver for future investments will be to bring power from renewable sources from faraway load centers.
The single easiest investment in the area is the First Trust NASDAQ Clean Edge Smart Grid Infrastructure (NASDAQ: GRID). The exchanged fund follows 32 companies relative to creating a smart grid or energy efficient electrical grid. These include investments in General Cable (NYSE: BGC) and smart meter manufacturer Itron, (NASDAQ: ITRI). The fund charges 0.70% in expenses and could represent a good long term hold as play on the ever increasing spending in the area.
