Invest in a Sector Outpacing the U.S. Economy 12 Times Over

David Fessler By David Fessler, Energy and Infrastructure Strategist, The Oxford Club

Alternative Energy

“I’m going to create millions of jobs,” Trump crowed over and over on the campaign trail. He promised to add 25 million jobs in 10 years.

Now that he’s president, turns out that his big plan is to cut bureaucracy and taxes. He claims that will “unleash” the economy, creating “millions of new jobs” in the process.

Hogwash.

I know a better (and easier) way he can make that happen. The clue is in a line from an old Bob Dylan tune…

“The answer is blowin’ in the wind.”

Dylan might have had something other than job growth in mind when he wrote the line, but Trump should take note: He needs to pay attention to wind… and other renewables. If he did, he would find a robust job-creating factory for the U.S.

Jobs in Renewables: Trump Is Clueless

We all saw the “Trump Digs Coal” campaign signs. And we witnessed him signing an executive order making it easier for coal-fired power plants to meet certain pollution standards.

Despite the gesture, coal’s demise and the drop in coal-sector jobs in the U.S. have been a long time coming. The latest figures from the Bureau of Labor Statistics show there are currently about 50,000 jobs in the coal industry, down from a peak of 178,300 in April 1985.

The main reason for the steady decline is that utility companies have turned more and more to natural gas to operate. Natural gas-powered plants are cheaper than coal-fired plants and emit about 60% less carbon dioxide. Plus, most shuttered coal plants are very old, and utility companies have no plans to upgrade or replace them.

In contrast, America’s clean energy and sustainability sectors have been growing steadily. These sectors currently employ around 4.5 million Americans – a huge increase from 3.4 million in 2011.

Here’s a breakdown of the jobs in clean energy and sustainability…

Renewable energy – wind and solar – now accounts for 769,000 jobs in the U.S. and is increasing 12 times faster than the U.S. economy. And over the last two years, 46% of all large companies added workers to address sustainability issues.

“Energy efficiency” jobs, which total roughly 2.2 million in the U.S., mostly consist of small businesses that work on the construction and installation of energy-efficient systems.

This year has been a tipping point in renewable job growth. For the first time, more people held jobs in clean energy than in fossil fuels.

The gap continues to widen. Fossil fuel job growth is negative. Renewables are on fire. And clean energy jobs are in every state in the Union.

Playing the Solar Sector

Even if Trump is unaware of the fastest-growing energy sectors in America, energy investors should pay attention… and take a close look at this master limited partnership (MLP).

While most MLPs are in midstream oil and gas, 8Point3 Energy Partners (Nasdaq: CAFD) is a growth-oriented solar MLP. First Solar (Nasdaq: FSLR) and SunPower Corp. (Nasdaq: SPWR) formed 8Point3 to buy, own and run solar power projects.

The partnership’s goal is to produce regular cash distributions. More importantly, it wants these distributions to grow.

Right now, 8Point3’s portfolio consists of 945 megawatts’ worth of projects. It recently declared a first quarter distribution of $0.2565 per share.

That was a 3% increase over the fourth quarter distribution. The effective yield is 8.34%.

The partnership forecast a second quarter distribution of $0.2642 per share. This would again be a 3% increase over the first quarter.

The partnership expects to grow distributions by 12% during 2017. Its cash available for distribution for 2017 is approximately $100 million.

This supports a 12% annual distribution growth. And that assumes 8Point3 adds no new projects to the partnership’s portfolio. But I expect it to add more projects on a regular basis.

Ultimately, this will mean an even faster distribution growth. For income-oriented investors, 8Point3 could be a great choice.

Let Trump continue to “dig coal.” As an energy investor, put your money where the real economic growth is happening.

Good investing,

Dave