Energy Companies Investment in Renewable Energy Production and its Effect on Financial Performance
Project Author
Issue Date
2024-04-29
Authors
Phillips, Holden
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Embargo
First Reader
Onyeiwu, Stephen Z.
Additional Readers
Sun, Xiaohan
Keywords
Business , Renewable Energy , Finance , Financial Metrics , Regression
Distribution
Abstract
As the effects of climate change become more prevalent, the world must become more sustainable in order to combat them. One of the ways that energy companies are contributing to increasing sustainability is by increasing their renewable energy generation infrastructure to provide clean, emission-free energy. In the past, due to high upfront costs related to building renewable energy infrastructure, renewable energy investments had to be subsidized in order to achieve financial viability. This study performed a regression analysis to test whether recent developments in renewable energy technology, which have led to cost decreases, have made renewable energy investments financially viable. Using data collected from company documents and online databases to analyze renewable energy generation capacity and financial metrics for the year 2022, this study provides evidence that there is no statistically significant relationship between investment in renewable energy and financial performance. Resulting from a lack of evidence supporting an advantage for either green or non-green companies, a mixed asset base was recommended due to its ability to capture the advantages of both hydrocarbon and renewable electricity generation sources.
Description
Collections
Chair
Major
Business
Department
Business and Economics