Investors are taking a variety of creative approaches to
capitalize on alternative energy sources. One company, Southwest Windpower in
Arizona, produces a small 13-pound marine wind turbine specifically used for
charging sailing yacht batteries.
 TerraPass, a firm started by a Wharton business class, buys
renewable energy credits (RECs) in bulk from wind farmers and other green power
producers. It then resells small bundles of these credits in the form of
TerraPasses to car owners who want to offset pollution emitted by their
automobiles.
Unlike a utility that may need RECs to fulfill state renewable
energy requirements, individual TerraPass buyers cannot actually make use of
their RECs; the credits purchased are effectively retired and taken out of
circulation. This reduction in supply theoretically helps stimulate the
production of more green energy. In a sense, TerraPass distills the
environmental and economic benefits of renewables without undertaking the full
risk of resource exploration and development. Chief Environmental Officer Tom
Arnold says that after TerraPass has proven its concept, it will launch a wider
marketing campaign. He expects investor returns to eventually reach 10
percent.
Gregg Dixon, vice president at EnerNOC, an energy conservation
consultancy, saw so much opportunity in this business model that he became one
of its first investors. "To be an angel investor, to be on the ground floor of
something truly new, you have to have a big stomach for volatility and risk," he
says. "You have to place your bets in such a fashion that you expect nothing in
return, but if you get something, it’s going to be enormous. I believe we’ll be
forced to wake up to the issue of global warming, forced to wake up to the need
for renewable energy."
TerraPasses are priced at different levels based on the number
of RECs that compensate for carbon dioxide pollution produced by a specific car
model. The owner of a gas-guzzler pays more for his TerraPass than the owner of
a hybrid.
Dixon himself is a customer. He buys TerraPasses for his family
cars, including a fuel-hungry SUV. Dixon predicts success for the TerraPass not
only because it inspires people to fight global warming, but equally important,
because it stirs a fundamental human impulse.
"What is the price of a clear conscience?" he asks. "When we go to church on
Sunday, people put a lot of money in that basket. I think that they do it
because ultimately they want a clear conscience."
Photograph courtesy General Electric Company.
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