Prepare yourself ... because few topics spark as fiery of
a debate as the one we're going to discuss today.
What's
yourtake?
In just a second, you can tell all of us exactly how
yousee things playing out. You can even rant about
our government until you're blue (or red) in the face.
But first, a few points.
When President Obama signed the American Recovery and
Reinvestment Act of 2009 into law, nearly $79
billionwas set aside for renewable energy. Politics
aside, that's an awful lot of money. And it may just be the
beginning.
Don't forget, Obama pledged to "help create 5 million new
jobs by strategically investing $150 billion over the next 10
years" and to "ensure 10% of our electricity comes from
renewable sources by 2012, and 25% by 2025."
Fuzzy math?
According to Management Information Services, a
Washington, D.C.-based economic research firm, between 1950
and 2003, U.S. federal government subsidies for renewable
energy were approximately $111 billion -- meaning Obama is
going to invest more in one decade than we previously had in
more than half a century.
This looks like a major win for green energy -- and
companies from
FPL Group (NYSE: FPL) to
Edison International (NYSE: EIX) and
First Solar (Nasdaq: FSLR). But it pays to
dig a little deeper.
When you do, you discover -- among other things -- that
according to the Department of Energy, renewable sources
accounted for 9% of electricity generation in 2008. That
means Obama has three years to move the dial by just 1
percentage point.
Pot, kettle, black
Earlier this year, an article in The Huffington Post
called out a similar discrepancy in Obama's rhetoric: "If
this is how the impressive sounding goal of 'doubling
alternative energy' is calculated, what Obama is essentially
pledging is to simply maintain business-as-usual growth."
Combine this with the fact that oil prices have been cut
in half, and that even wind super-evangelist T. Boone
Pickens' now says the U.S. doesn't have the infrastructure
needed to get clean energy to market, and you begin to
realize that the bears have a legitimate case, too.
5 words that will knock you off the fence
I admit, I love the
ideaof a stiff breeze charging my iPhone and a sunny
afternoon lighting up Manhattan at night. But when it comes
to green
investing, I've been a bit of a skeptic lately. That
is, until I opened
The Wall Street Journallast month and saw this
line:
"The money is coming back."
That's according to Ethan Zindler, head of North American
research at New Energy Finance Ltd
.And frankly, it's a bit of an understatement.
After all,
Morgan Stanley (NYSE: MS) and
Citigroup (NYSE: C) each took advantage of
new federal incentives to invest more than $100 million in
wind farms in August
alone.Meanwhile, Spanish
Iberdrola SA is throwing around cash-grant
numbers in the $500 million range and is planning on
investing another $2 billion.
And now even
GE (NYSE: GE) is getting back into the game.
It tells
The Wall Street Journal, "We see opportunities and
are pursuing them actively."
So are we -- and so can you
There are plenty of ways to play the clean-energy craze
-- such as buying shares of
Vestas or
LDK Solar (NYSE: LDK). But our
Motley Fool Hidden Gems
team is busy uncovering less obvious -- and potentially
much more profitable-- opportunities.
Primarily, they're looking for
small, ignored, or overlooked companieswith
explosive growth potential. One that fits the bill is
Jinpan International -- a Chinese company
that makes cast-resin transformers. These require only a
fraction of the upkeep of their oil-based predecessors. And
because many wind farms are being built in desolate, hostile
environments -- including some hundreds of miles offshore --
they're in very high demand.
In fact, over the past two years, Jinpan's wind products
have gone from accounting for less than 1% of revenue to more
than 13% -- and over the past five years, the top line has
had an impressive 30% compound annual growth rate. Here are a
few more favorable metrics.
Company
Insider
Ownership
Sales
Growth*
EPS
Growth*
Net
Margin*
ROE*
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