The financial implications of investing in alternative energy

Abstract

The dramatic rise in the price of oil during 2008 brought with it a significant change in the local scenario with regards to electricity prices. In Malta the only producer of electricity is Enemalta which produces this electricity through the purchase of crude oil. The increase in the price of oil needed to be transferred to the end-consumer. As a result Maltese firms were suddenly facing increasing hefty bills. Many firm owners began to search for new ways which could lead to a reduction in the price to be paid for the consumption of electricity. This lead to the road where firms began to seriously consider and wonder whether an investment in renewable energy could be a worthwhile investment and what could be the returns which a firm may make. Coupled with this, the government's intervention to aid firms investing in this direction further spurred firms to carry out such a study. Firms were eager to determine whether if they invest in this direction and make use of these funds, they could be able to not only giving a 'green image' to their customers but also to generate a return from it. This dissertation delves into the scenario which firms were facing during the second half of 2008 and the beginning of 2009. This dissertation aims to provide useful knowledge for those investing in this field at present.