Now that you've got a feel for the alternative energy landscape, it's time to turn to main investment drivers. Fisher Investments believes these themes pertain both to financial results and stock price performance. While they are by no means comprehensive, they serve as a good starting point for understanding the category. Fisher Investments believes analyzing each driver and how each may change in the short to medium term will prove key determinants behind investment decisions. The main drivers are:
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Oil and natural gas prices
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Taxes, politics, and regulations
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Geopolitical environment
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Technological advancements
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Supply chain costs
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Sentiment
Oil and Natural Gas Prices
Because of the substitution effect, the biggest drivers of alternative energy firms are oil and natural gas prices. As the prices of traditional oil and gas increase, demand for alternatives also increases. Conversely, falling prices for oil and natural gas reduce demand for alternatives. Fisher Investments believes so as long as traditional energy prices are considered to be relatively high or a burden to businesses and consumers, there will be a steady demand for alternatives.
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