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The market has fallen sharply, and
Solar stocks have fallen even more following rumors that Congress will pass the Energy Bill without the Production Tax Credit or
Investment Tax Credit. Given this volatility and Renewable Energy's reputation for
profitless startups, now might seem like an excellent time for a risk adverse
investor to abandon the sector altogether.
Not so. Even if all tax credits and other incentives for Renewable
Energy were to be removed, the underlying drivers of Alternative Energy remain
firmly in place: Rising
energy prices and decreasing reserves, the need
to reduce our Greenhouse gas emissions to avoid the worst effects of Global
Warming, and the likelihood of continued
nationalizations, or the more subtle nationalization
by taxation/royalty increases practiced in more developed countries.
Defensive Alternative Energy Sectors
Without direct government support, the sectors likely to suffer the least are
the ones which are already economic. Top of the list is Energy
Efficiency, which might actually gain from a cut in subsidies for renewable
energy, as green House Gas production efforts shift away from Renewable.
Among renewable energy technologies, Geothermal,
small Hydro, and Wind are already cost competitive with fossil competitors in
the best locations. Biomass and Biodiesel
are also cost competitive when using waste as feedstock.
Most of the best companies in Energy Efficiency (especially when it comes to
energy Efficient Buildings) tend to be systems integrators, large companies with
strong energy efficiency arms. These companies have an added advantage for
a risk- adverse investor: built-in diversification. This brings me back to
a way even the most cautious stock market investor can participate in the
Alternative energy Boom: By buying the companies in my Blue
Chip Alternative Energy Portfolio: large, profitable companies that stand to
gain from increasing energy prices and carbon regulation.
Charles and I have added a few to my original list since the original
article. Here is the
updated list, along with links to articles describing why we like
each of the stocks:[...]
Full
article - Source : ©altenergystocks.com
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