Is now the best time to access energy stocks?

To say that markets have been unkind to alternative energy equities is an understatement. The sector, as represented by the WilderHill Clean Energy index (ECO index), is down 78% since July 2008 and down 61% since 2011.

However, now is a particularly attractive entry point for long-term investors. The valuations of alternative energy stocks are cheap compared to historic valuation levels. Companies with positive earnings in the ECO index are trading on a forward P/E of 14x and forward EV/EBITDA of 10x. The growth of the alternative energy sector has been impressive. Between 2008 and 2016, annual installations of solar photovoltaics grew from 7 GW to 71 GW, a CAGR of 35%, while annual wind installations doubled from 27 GW to 59GW.  Equities have performed poorly over the same period due to the relianc...