Performance Determinants of Renewable Energy Companies

The purpose of this thesis is to identify the Performance Determinants (PD) of Renewable Energy (RE) companies. It analyzes the background of the RE industry while reflecting simultaneous developments in the fossil based industries. I divided the determinants into two groups: market level and firm level and established hypotheses based on the existing literature. Data from public companies was gathered to construct a Panel Data structure. This is then tested by using a Linear Regression with Fixed Effects model. The model specification was efficient at reflecting the analyzed phenomena. My results showed that both market level and firm level determinants are significant in the RE Industry but the firm level determinants had higher explanatory power (R2). The determinants' relationships were found to follow those from the manufacturing industry more than the utilities' industry. Out of the market level determinants Consumer Price Index (CPI), Interest Rates and Oil prices were significant. Out of the firm level determinants Debt to Assets, Net Investments, Cash flows from operations, Sales and Earnings Before Interests and Taxes (EBIT) were significant. I concluded that this information is valuable for key industry players as they can achieve their objectives faster by elaborating better strategies using these results.