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Bill Gates Was Right: Green Energy Wasn’t Ready for Prime Time

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MIcrosoft chairman Bill Gates. (Elaine Thompson, AP)
Elaine Thompson, AP

It’s been nearly two years since Bill Gates came out with his famous dismissal of “green energy” in general, and solar power in particular, as “cute” but too inefficient, too expensive, and too small in scale to actually make a dent in global warming. And once again, it appears the founder and chairman of Microsoft (MSFT) was ahead of the curve.

In an article in this month’s edition of The Wall Street Journal’s WSJ.Money magazine, the newspaper outlined a swelling backlash against solar, wind, and biofuels — among investors at least: “Burdened by global overcapacity, slowing demand and the resurgence of fossil fuel production, clean-tech investments have fallen heavily out of favor” on Wall Street, lamented the Journal.

Wind and Sun and Batteries, Oh Well!

And no wonder. While energy experts predict that wind power contributions to global energy production will continue rising, and may account for more than 30 percent of global energy production by the year 2050, the pace of growth in other green energy sectors is already showing some slack.

Take solar power systems installations, for example. After growing nearly six-fold from 2007 to 2012, growth in the solar power market is expected to slow in the coming years, and to barely double in size from 2011 through 2016.

Other green-energy niches are encountering headwinds as well. While electric cars saw sales spike 26 percent last year as Tesla (TSLA) and Nissan, and even Ford (F) and General Motors (GM) brought e-cars to market, sales are expected to grow only 6 percent this year. After rapidly burning through their supply of early adopters — and as the vehicles’ limited driving range and high sticker prices, plus the lack of charging infrastructure along major transportation routes becomes more clear — automakers are hitting a wall as they seek further growth.

The Fallout

Meanwhile, a surge in investment in shale gas and oil is helping ignite a boom among traditional energy companies, expanding supply, driving down prices, and making green energy look all the more expensive in comparison.

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Result: One pioneer of green energy investing, Sun Microsystems co-founder and green energy investor Vinod Khosla, has seen the value of his green-energy investments fall by half.

And that’s the good news.

The bad news is that many ventures in the industry have done much, much worse. Solar panel maker Solyndra was only the highest profile of these failures. More recently, we’ve also seen bankruptcy filings of battery makers A123 Systems and EnerDel parent Ener1. The death of automotive start-up Th!nk Global. The slow fade of Pacific Ethanol and its peers.

What Does It Mean to You?

The good news among all this doom and gloom, of course, is that as the hot air rushes out of the overinflated green energy balloon, what remains should be a more solid core. Once the unprofitable dross have been cleared away, any profitable companies that remain should be easier to spot — and considerably cheaper, should you still feel inclined to invest in them.

Meanwhile, the future for investments in oil and gas companies like ExxonMobil (XOM) is looking shinier than ever.

Motley Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Ford, General Motors, and Tesla Motors. The Motley Fool owns shares of Ford, Microsoft, and Tesla Motors. Try any of our newsletter services free for 30 days.



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Pity the Rich Investing in Hedge Funds. Seriously.

Filed under: Financial Services, Financial Advisors, Securities, InvestingGeorge Soros, founder of Soros Fund Management. (Akos Stiller, Bloomberg via Getty Images)
Hedge funds. Everyone wants to invest in them, but if you want to get into one, you gen…

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5 Surprising Stocks Hitting New Lows

Filed under: Company News, Apple, Stocks, Historical Stock Prices(Getty Images)The Dow Jones Industrial Average hit a new all-time high last week, but not every stock went along for the ride.

In fact, a whopping 221 stocks hit fresh 52-week lows on th…

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Warren Buffett’s 5 Favorite Stocks

Filed under: IBM, Coca-Cola Company, Stock Picks, Wells Fargo, Warren Buffett, InvestingEveryone wants to know what Warren Buffett is buying. As one of the world’s most-followed investors, he has a track record that would make anyone jealous. Shares of…

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5 Extreme Ways People Paid Off Their Credit Card Debts

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Merchant MarinesWe’ve all heard of the usual ways people try to save or generate more money to pay off their debts: cutting out the daily latte, brown-bagging lunch, getting a weekend job, or starting a side business selling clothing, toys, or beauty products.

But some people go to extremes to find ways to accelerate their debt payments and get rid of the IOUs once and for all.

We asked credit counselors across the country to share some of the more dramatic approaches their clients have used to get out of debt.

Join the Merchant Marine. Bruce McClary, currently director of media relations for ClearPoint Credit Counseling Solutions in Seattle, worked with a client in Hampton, Va., who was determined to pay off $25,000 in credit card debt. Her delinquency on one account led to a domino effect that sent her interest rates on several cards spiraling up to 36 percent.

Her solution? Eliminate rent and utility payments altogether — by joining the Merchant Marine as a crew member on a container ship. She started a debt management program and had payments automatically applied toward her card balances while was at sea. After a few months, she even increased the size of her payments and was able to repay her entire debt in two years.

“She admitted that life at sea was not easy and that there were times she questioned her choice,” says McClary. “The container ships were very large and staffed with very few people. It was a challenge to stay entertained and occupied between work shifts. She read a lot of books and spent a lot of time writing letters since there wasn’t any Internet access on the ship.”

Move into a shed. Erin Chapman, a housing counselor in Atlanta with CredAbility, is working with a client who got divorced, lost his job briefly due to a disability, and had refinanced into an interest-only loan in 2007. He’s managed to keep up with his mortgage payments, but has fallen behind on his credit cards. Now he’s hoping for a mortgage loan modification so that he can get back on track financially and then begin to pay off $23,000 in credit card debt.

“He has rented out both sides of his large [duplex] home and moved out into a shed at the back of his property in order to make ends meet,” says Chapman. “He doesn’t even turn on the heater in order to save expenses. He plans to get a roommate for one of the sides of the home and have his son move into the shed, since it would be easier on his health.”

Become an eBay black belt. While many people sell items on eBay, not all of them are as resourceful as one client who went to the Consumer Credit Counseling Services of Central Oklahoma in Bethany, Okla., and was put on a debt management plan to pay off about $30,000 in debt over four years.

The woman began to send in extra money — on a frequent basis — to pay off her debt. Turns out she was earning that extra money through eBay.

“She told me that she found a way to inexpensively buy basic items like cookware and underwear, and was able to sell them on eBay to people who lived in really rural, remote areas,” says Cristy Cash, director of counseling with CCCS of Central Oklahoma. “She said most of her clients had P.O. boxes in places like Alaska and Canada. She was doing so well that she paid off her debt in full in two years instead of four.”

Sign up for active duty. A woman who was in the Air Force Reserves for 33 years entered a debt management program with Consumer Credit Counseling Services of Greater San Antonio to pay off $53,000 in credit card debt. But her reasons for doing it were bigger than financial concerns: Her fiance had told her he wouldn’t marry her until she paid off her debts.

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“Her motivation was that she wanted to get married, so when she went on a tour of duty in Afghanistan, she used her sign-on bonus and saved the rest of her income from the deployment to pay off the remaining debt on her plan,” says Cynthia Hazel, marketing director of CCCS of Greater San Antonio. “She paid a total of $9,435 in two months so that she could become debt-free.”

She and her fiance were married on Nov. 11, 2011. She retired from the Air Force last year, owns a flower shop, and is still debt-free.

Sell a prized possession. Another credit counseling client in Oklahoma was on a debt management plan and owned a guitar that she believed was valuable. She still had $20,000 in debt hanging over her head and was eager to pay it off, says Bob Cook, a credit counselor at Consumer Credit Counseling Services of Central Oklahoma. She took the guitar to a music shop and discovered that it was indeed very valuable. She sold it for $20,000, and paid her debt off in full.

What’s your most creative idea for boosting your income to pay off debt?

Michelle Lerner is a contributing writer to The Motley Fool.

Photo Credit: The United States Merchant Marines



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