California is canceling the gas car.
On August 18, Governor Gavin Newsom notched a win when the California Air Resources Board approved his plan to phase out gas cars…
Starting in 2026, 35% of cars sold must be electric vehicles (EVs). That will increase to 100% EVs by 2035.
This is the same California that’s been battling power outages every summer. In 2020, a series of rolling blackouts left over 500,000 residents without power.
Between 2017 and 2019, the state saw its blackouts increase by about 20% yearly… for a total of more than 50,000 in just two years.
But California isn’t alone here. Overtaxed power infrastructure is a national problem.
The U.S. built most of its power grids in the 1950s and ‘60s. And we only designed the grids to last 50 years before needing major overhauls.
A portion of the monthly electric rates we pay is supposed to go toward maintaining and upgrading these grids… But all too often, utility companies put off major improvements in favor of profits.
And the result is a 10x increase in power outages affecting 50,000 people or more since the 1980s.
On top of that, outages from major storms like hurricanes and blizzards have more than doubled over the past 20 years.
In 2020 alone, the average American experienced over eight hours of power disruption – a 73% increase from 2019.
So California’s already taxed power grid will have to support the charging of an estimated 32 million EVs in the coming decade… That’s going to be a big problem.
Here’s why I’m telling you this…
As Daily editor Teeka Tiwari says, “With every big crisis comes even bigger opportunities…”
And today, we have a chance to invest in a solution for America’s energy crisis.
America’s Failing Energy Infrastructure
When President Joe Biden signed the $1.2 trillion Infrastructure Investment and Jobs Act late last year, Congress earmarked about $65 billion to improve the nation’s power grid.
That number is woefully short of the estimated $7 trillion needed to modernize our current power infrastructure.
As a result, Congress has spent the months since trying to stretch those dollars by promoting “distributed energy resources,”… a fancy way of telling Americans that they’ll have to become their own mini-power grids.
California is a party to this strategy. It now offers several programs that reward homeowners for installing distributed energy resources like solar panels and energy storage systems (ESS).
Some utilities will offer a $1,000 rebate for every kilowatt-hour (kWh) of ESS installed. And California will pause property tax rate hikes until 2024 on properties that install solar panels.
Along with other federal and regional incentives, California hopes these efforts are enough to decentralize the grid for the coming EV wave… And this is where we’ll find opportunity.
Turning Clean Energy Solutions Into Profit
California is home to over 39 million people. More than Canada or Australia. And it would be the world’s fifth-largest GDP if it were a nation… so it uses a lot of electricity.
Add in the seven other states that intend to follow California’s lead… and that’s 40% of the nation’s car sales going electric over the next thirteen years.
So an estimated 57.8 million homes are likely to adopt ESS to keep them charged.
You can get immediate exposure to this trend by investing in the iShares Global Clean Energy ETF (ICLN)…
The ICLN index fund holds large, established companies. So the growth potential isn’t the same as a private start-up… But it’s up 6% year-to-date compared to the Nasdaq’s 23% decline.
It will also give you broad market exposure to companies like Enphase Energy and SolarEdge Technologies.
Enphase is one of the largest producers of home ESS. And SolarEdge builds power management systems for home solar panels.
So as waves of consumers adopt EVs and home ESS over the next two years, I believe ICLN could double your money in that same period.
And if current trends are any indication, it’s only a matter of time before even more Americans make the switch… so preparing for that today could potentially set you up for a windfall of profits in the years ahead.
Invest with conviction,
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Anthony Planas
Analyst, Palm Beach Daily