“Battery prices have fallen 90 percent in the past five to eight years,” said Ms. Bowman. “Solar power coupled with battery storage is the cost-effective solution for California in moving to a cleaner grid,” she added.
Hydrogen fuel cells, which generate electricity by combining hydrogen and oxygen, have emerged as a possible short-term solution for use in trucks and shipping, says Bloom. However, such applications require costly expansion of the hydrogen gas station network, said Steve Capanna, director of US climate policy and analysis at the Environmental Defense Fund. Right now, he said, there aren’t many such stations besides “a handful in California”.
Buying stocks from renewable energy stocks now requires a certain level of confidence because they are so expensive, in part because of the low interest rates developed by the Federal Reserve that have helped propel the entire stock market higher. Fed support could be the main reason the market weathered all of the dire coronavirus economic news to continue its seemingly endless rise in valuations.
Paul Coster, a JPMorgan analyst, said the high prices in the renewable energy space are based on solid performance. “It’s not like the dot-com era,” he said. “They are real actors with real technology.” He added, “We live in this wonderful moment when virtue and selfishness coincide.”
Perhaps, thought Mr. Coster, there are still good reasons to own some of these stocks. He cited FuelCell Energy, which has negative cash flow and regularly reports quarterly profit losses. Mr Coster said investors might want to project for several years.
By 2025, it is “feasible” that FuelCell Energy would achieve earnings before interest, taxes, depreciation, and amortization of $ 60 million, which warrants a rich, high-growth stock valuation. Even so, the company’s shares more than doubled in the last month, and on Jan. 14, Mr. Coster warned that the stock was already “richly valued” at current prices.