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Wall Street Chases Alternative Energy with Subsidies

Posted Sep 01, 2009 11:30am EDT by Heesun Wee in Investing, Commodities, Clean Tech

Wall Street is getting back into the alternative energy business. The WSJ reports Morgan Stanley and Citigroup have invested $100 million each to finance separate wind farms this month, taking advantage of the Obama administration's $3 billion grant program for renewables. 

The program is a move in the right direction, but ultimately a drop in the bucket that's needed to take renewable energy mainstream, says Gordon Johnson, head of alternative energy research at Hapoalim Securities. "Three billion is not enough for just one sector."

Ultimately the cost of alternative energy -- such as solar panels -- must come down significantly before more consumers let go of fossil fuel-generated energy. (It now costs about $17,000 to install solar panels on a single-family home.) That's why Johnson thinks competition from low-cost manufacturers in China is a good development for the solar sector.

A recent, negative setback for renewables: Caps to Germany's Feed-in Tariff or FIT incentives, which have fueled solar growth in Germany, one of the world's largest solar energy markets. FIT incentives require utilities to pay a set price for solar energy, subsequently making it more attractive for businesses to make green investments. (For now, FIT incentives are not a huge part of America's energy policy.) 

Because of high costs associated with solar power, Johnson says wind energy may be the smarter alternative energy play at the moment. 

Bigger picture though, it's America's aging infrastructure -- decades-old transmission lines -- that may derail our alternative energy growth, Johnson notes. That's a key reason why oil man T. Boone Pickens' wind farm project was derailed.

 


 

79 Comments

asdf
asdf - Tuesday September 01, 2009 11:43AM EDT

These alternatives will always be a drop in the bucket. What is needed is more conservation and fusion development.

Jim
Jim - Tuesday September 01, 2009 11:45AM EDT

It costs 17,000 in America. Where I live it costs about 4,000 for the same setup... joke's on you, again...

teehikkles
teehikkles - Tuesday September 01, 2009 11:48AM EDT

ahhh - september -- let the dumping begin -- remember to flush!!

sdw
sdw - Tuesday September 01, 2009 11:53AM EDT

weew, now I can rest easy, Wall Street is going to fix the energy crisis with other peoples money! May the biggest idiot win.

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 01, 2009 12:03PM EDT

Barbara_wawa is right- Wind Power is a scam! It is not a reliable source of power, it kills migrating birds (where's PETA?), it denudes vegetation, and emitts noise and vibrations that harm animals and humans. See www.wind-watch.org. Furthermore, according to Al Gore (interviewed by CNBC) last year, we need to build a 3 trillion dollar grid to move the wind power. Of cource, Al G. stands to gain by this.

__A_YAHOO_USER__
__A_YAHOO_USER__ - Tuesday September 01, 2009 12:05PM EDT

why not jus give all Americans tis.... BUY AMERICAN and keep George Washington in the 57...oops! 50 states working for the United States of America....not stuck in a foreign bank. ——— Washington had been reelected unanimously in 1792. His decision not to seek a third term established a tradition that is now embedded in the 22d Amendment of the Constitution. In his Farewell Address of Sept. 17, 1796, he drew on the results of his varied experience, offering a guide for both present and future. He urged his compatriots to cherish the Union, support the public credit, be alert to the “insidious wiles of foreign influence,” respect the Constitution and the nation’s laws, abide by the results of elections, and eschew political parties of a sectional cast. Asserting that the United States and Europe had different interests, he declared that it “is our true policy to steer clear of permanent alliances with any portion of the foreign world,” trusting to temporary alliances for emergencies. He also warned against indulging in either habitual favoritism or habitual hostility toward particular nations, lest such attitudes should provoke or involve the country in needless wars. ————————

Tex
Tex - Tuesday September 01, 2009 12:06PM EDT

That's why I like ETF ICLN; it covers a broad spectrum of alternative energy stocks.

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 01, 2009 12:07PM EDT

Wall Street is chasing alternative energy? Wall Street can chase THIS. I got your “alternative energy” hangin’!

SOCAL USC
SOCAL USC - Tuesday September 01, 2009 12:08PM EDT

That's right, send more good paying jobs to china. Come on America, pay the $17,000.00 and keep the jobs here. That is what helped cause the problems we face now. When a country manufactures nothing, all the wealth is sucked right out of it. No jobs equals no money to spend.

Rey
Rey - Tuesday September 01, 2009 12:15PM EDT

Take Your profits now / all of you that bought cheap stocks I suggest you sell before it's too late / The Bears are showing up and this market is going to come flaming down to earth even lower than the beginning of the year

Brian M
Brian M - Tuesday September 01, 2009 12:21PM EDT

georgem: You feed us with a lot of doom and gloom bull here. If you want to lock yourself inside and cry about the economy, do it on your own. We don't want to see your negative bull here. I am sorry the economy has not gotten as bad as you had hoped! Keep it up and you'll miss one of the largest economic rebounds in 40 years (see independent report from National Economic Board). We need alternative energies, just not enough has been invested in sources that are reliable, abundant, and efficent. Ultimately wind nor solar power is not the way to go but atleast a step in the right direction.

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 01, 2009 12:23PM EDT

If wind power is such a great idea, why did T. Boone Pickens get out of it and is now pushing CNG???? Me, I just got my Flux Capacitor back from the shop and going to put it on the DeLorean tonight after work. I am then going back in time and buying 1,000 shares of Microsoft ....

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 01, 2009 12:24PM EDT

Chubby? -200 before close? Did you put your shorts in yet?

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 01, 2009 12:24PM EDT

before he makes assertions about how long it takes to "payback" a system perhaps he should run some numbers, like compare it to other home investments, like a remodeled bathroom, kitchen, etc. also, energy is an expense, perhaps having clean energy might deserve a premium. transportation is an expense, i dont see folks saying my bmw needs to pay itself off in 20 years.

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 01, 2009 12:25PM EDT

SOCAL USC - Tuesday September 01, 2009 12:08PM EDT – “Come on America, pay the $17,000.00 and keep the jobs here.” ------------------------------------------------------------------------------------------------------------------------------------- SEVENTEEN GRAND to help Americans? You must be nuts! You can tell just by looking at those emaciated slaves that they’re a better investment than the lazy bunch we have here!

yogi9448
yogi9448 - Tuesday September 01, 2009 12:27PM EDT

C is owned by Obama so no suprise that they invested.....The largest oponent to wind energy in our neck of the woods, lawyers and the Sierra Club.

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 01, 2009 12:27PM EDT

Someone check... Did Obama talk on TV today at 10:00am ET?

TylerS
TylerS - Tuesday September 01, 2009 12:31PM EDT

An 80% -90% drop in solar panels. That is realistic. Wind is a good choice. Also, a nice home based wind turbine costs about $300, so you need the major investment of the power inverter first, then you can modulate wind turbine installs.

Yahoo! User
Yahoo! User - Tuesday September 01, 2009 12:31PM EDT

georgem is the username of Chicken Little.

Rey
Rey - Tuesday September 01, 2009 12:31PM EDT

All of those Jokers a couple of weeks ago saying The S&P at 1,100.00 that tells you how much these fools Know how about 600 by the end of the year

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