Berkshire Hathaway Inc. already committed $15 billion to build solar and wind power. Warren Buffett (chairman of Berkshire Hathaway Inc.) recently expressed that, as far as he’s concerned, there’s another $15 billion ready to be invested in the renewable energy sector.
While utilities don’t offer the returns of businesses that Buffett favored earlier in his career, he stated he likes the industry since it provides opportunities for reinvestment and further acquisitions. In 2000 Buffett bought control of an energy holding company in lowa and he helped the company’s expansion by inlaying money. Buffett renamed the company to Berkshire Hathaway Energy.
Unlike other utility-holding companies, Berkshire Hathaway Energy retains all of its earnings. This probably will also be the case in the future. By estimate the unit could reinvest about $30 billion into its business in the next decade. Berkshire has been able to invest so much cash into renewable energy because it can use tax credits to offset profit at other business units.
Investments in the renewable energy sector are important since the U.S. tries to decrease its reliance on fossil-fuel generation.
While spending $30 billion on renewable-energy projects would have been unheard of two decades ago at Berkshire, Buffett is signaling that the returns are attractive, said Jeff Matthews, a shareholder and author of books about the company. “If he says it, he means it,” said Matthews. “The whole complexion of the company has changed.”