Investors Say Utilities Industry is Stabilizing

In recent years, the utilities industry has been in an uproar, largely due to talk of smart grid technology and renewable energy sources. Now, however, investors are noticing signs of stability and exhibiting greater confidence. As a utilities professional, it is crucial to pay attention to the signs of a stabilizing industry; in doing so, you can embrace new technologies at the right time and make strategic investments that will benefit your company in the long run.

For utilities professionals, the move toward sustainable energy sources like solar and wind has both negative and positive impacts. The switch to a new power transmission system will undoubtedly shake up the utilities industry, forcing companies to come up with new business models, retrain staff, and implement smart grid technology. The switch will also help companies meet consumer demand, streamline the outage response system, and enable consumers to connect small renewable systems to the grid.

Many investors see the switch to a smart grid system as inevitable. Recently, more companies have started investing in green energy, which is a sign that the utilities industry is stabilizing. In past years, many investors were hesitant to put significant amounts of money behind solar, wind, and water-based energy systems because they were not yet commercially viable. Now, as prices are dropping and green energy technology is becoming more efficient, investments are up.

Signs of investor confidence in the stabilizing industry are plentiful, particularly among large, multinational companies. In late 2013, Microsoft announced that it would be investing in a massive wind-energy project. The wind farm, which is located in Texas, will be used to power one of Microsoft's enormous data centers for at least the next twenty years. The retail giant Walmart invested heavily in solar energy in 2013, making it the commercial solar leader in the United States. Google, Costco, and Apple have also made recent investments in renewable energy products.

What's more, many companies in the utilities industry have stopped fighting the intrusion of green technologies; instead, they are adapting their own practices to include more sustainable sources. According to a recent story from the Rocky Mountain Institute (RMI), 49 percent of the new energy capacity in the United States in 2012 came from renewable sources. The RMI also states that green energy is more sustainable and reliable than the current system, which also gives investors more confidence that the utilities industry is stabilizing.

After the chaos that has marked the past decade, investor confidence in utilities is up. The increase in new investments signifies that the utilities industry is less volatile than it was just five years ago. For utilities professionals and investors, the next several years will be a crucial time to watch the market for lucrative opportunities.

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