When Will Renewable Energy Companies Overtake Traditional Energy Companies?

But finding a single company large enough to rank among the energy majors isn't the same as comparing global energy output or usage. A common way of determining the size of a public company is its market capitalization, or the total value of all the shares owned by investors. Ardour's Krop pointed out that at $323.72 billion as of Dec. 31, Exxon Mobil's market cap is still 28 times larger than that of First Solar, the largest stock in his solar group, at $11.52 billion. It's also 26 times larger than Danish wind company Vestas Wind Systems' market cap of 64.57 billion kroner, or $12.47 billion. "My sense is that my solar group will not likely approach conventional energy company size in the foreseeable future," he said.

Another way to compare renewable- and conventional-energy companies is through their revenues and profits. Let's compare Vestas, the largest pure-play wind-turbine manufacturer, to Exxon Mobil, which sits at the very top of the Fortune 500. Exxon Mobil saw its revenue grow 18.8 percent to a whopping $442.851 billion last year as its profit grew 11.4 percent to $45.22 billion. Meanwhile, Vestas saw its revenue grow 24 percent to €6.03 billion last year — valued at $8.51 billion at the time of its annual report, according to Hoover's Inc. — while its profit grew 75.6 percent to €511 million.

If Vestas continued to grow at exactly the same annual rate, which is unlikely, it would catch up to Exxon Mobil's 2008 revenue in 18.7 years, and reach its profit in seven and a half years. (In dollar terms, revenue grew only 18.9 percent to $8.51 billion in 2008 from $7.15 billion in 2007, according to Hoover's. At that rate, it would take 23.3 years. But the discrepancy has to do with exchange rate differences, so we've instead compared euros to euros above.)

But unsurprisingly, Vestas' growth has slowed in 2009. In the first nine months of 2009, the company reported €4.13 billion in revenue, up 16.2 percent from €3.55 billion in the same period the previous year, and €264 million in profit, up 35.4 percent from the first nine months of 2008. According to its guidance, Vestas anticipates revenue of €7.2 billion for 2009, which would represent growth of 19.4 percent.

Of course, this is a simplistic way of looking at this question, as the growth of renewable energy isn't linear. Many as-yet-unknown factors play into the equation. For example, government incentives and other policies play a huge role in determining the market for renewable energy today, as well as the price of renewable projects compared to the ever-changing price of the traditional energy it might be competing with. "Until the industry can get along without government incentives, it will be at the mercy of how government incentives are structured," said Alfonso Velosa, a research director at Gartner Inc. He pointed to the consequences of the Spanish feed-in tariff, which more than quadrupled the country's solar market to 2.5 gigawatts in 2008 only to cut the program to 500 megawatts in 2009, leading to an oversupply of panels and shrinking panel prices globally.

Infrastructure challenges such as electrical transmission or biofuel distribution, as well as the need to figure out how to smooth and control the intermittent electricity from sources such as solar and wind, also stand in the way, he said. Financing for these projects will also likely need to improve before a renewable company will reach the Fortune 500. "Financing is the No. 1 concern for any renewable-energy project; it goes hand in hand with finding a customer," Velosa said.

Companies that help arrange financing for their customers, such as SunPower Corp., which offers power-purchase agreements through financing partnerships with the likes of Morgan Stanley and Wells Fargo, could have a  big advantage, he said, adding that he expects to see more companies get into financing.  All together, Velosa said, he expects to see world-scale renewable-energy companies emerge in 15 to 20 years.

Independent analyst Peter Lynch also forecasts it will take at least 10 years — and potentially "decades," as fossil-fuel companies continue to receive subsidies and government support far beyond renewables — to see companies at that size.