Clean energy will power the future. That’s what we heard from the recently concluded COP27 Climate Change conference in Egypt.
Many people invest in these companies on principle. They believe they’re helping to combat climate change in their own small way. But they don’t like the idea of losing money in the process, and that’s what’s happening. What was the problem? Basically, rising interest rates, which have hit these companies in several ways. Most clean energy companies are in the process of building out infrastructure. This means heavy capital expenditures, which are financed to a large degree by debt. As rates rise, the cost of paying for that debt increases, and the future cash flows from each project have less value.
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