Jeff Siegel - Angel Publishing

Baltimore Plastic Bag Tax

Polluters in Baltimore breathed a sigh of relief yesterday after the Baltimore City Council balked on any meaningful legislation that would reduce the use of plastic bags in the city. You know, the ones that decorate skeleton trees in the winter and float on the black glassy reflections of the Inner Harbor.

Not only have these plastic bags sucked a bit of the aesthetic charm out of Charm City, they also maintain an economic burden on the city, as removing these plastic bags from our water ways is not a free service offered by those who hand them out like paper towels at the grocery check out.

There was a proposal to charge consumers $0.25 per bag. But that was shot down. Instead the City is demanding the following:

Stores can only give plastic bags out if they participate in a program aimed at reducing the number of bags on the streets. Fines for noncompliance would range from $100 to $1,000. I'd be interested to know how often these stores would be checked. I suspect that if a store gets hit with a yearly bill for anywhere between $100 and $1,000, nothing will change.
Customers will only get plastic bags if they ask for them. That really adds a lot of bite to the bark of this poodle.
Retailers have to collect plastic bags and recycle them. Of course, there is nothing that would require customers or incentivize customers to actually bring them in to be recycled. And by the way, according to the EPA, only about 1 percent of all plastic bags in this country are recycled anyway. So perhaps we should ask ourselves, does it make more sense to require plastic bag recycling or just get rid of the bags altogether?
Retailers must also post signs encouraging customer to use reusable bags. Well, we all know how well signs work to encourage people in this city. Those "Drug-Free Zone" signs have really done a bang-up job.
Retailers must report back to the city on how many plastic bags they've distributed. Yeah, those numbers won't be distorted. Because clearly, the retailers who have fought quite effectively against plastic bag bans and taxes are going to provide the city with accurate data.

Now don't get me wrong. I know that there are some folks on the City Council who have worked tirelessly to help clean up this city. And I applaud them. But clearly the lobbyists have won at slowing the progress on curbing plastic bag pollution. And you better believe that over the next year, they're going to go full force trying to convince us that plastic bag taxes are a bad idea.

But I'd prefer to look at the data, and ignore the rhetoric.

I'd prefer to look at Ireland, where a $0.30 plastic bag tax was passed back in 2002. Within weeks of the new tax, there was a 94 percent drop in plastic bag use. And for those who did shell out the thirty cents - about $9.6 million was raised and earmarked for a green fund.

And in China, after a ban on super thin plastic bags was introduced, plastic bag usage fell by 66 percent and saved the Middle Kingdom 1.6 million tons of petroleum. Because yes, all those wonderful plastic bags are made with petroleum. Want to cut our use of foreign oil? Stop using so many damn plastic bags!

Of course, I'm not so naïve to believe that this is an easy fight. The resistance has been strong. And the truth is, if you want to get anything accomplished in this world, you do have to make compromises. But how much longer can we "compromise" on this stuff?

These plastic bags have become an environmental and economic burden that no one seems to be willing to pay. So the way I see it, if you can't pay for something, then you can't have it.

It's not rocket science.

It's a basic concept you learn as a child. And it's a basic concept that we better start remembering soon.

Although you're given these bags at your local grocery store, they are NOT free.

There is a cost associated with these things. You may not be paying for them at the checkout now, but rest assured, your tax dollars pay to get them out of the trees and out of the harbor. Your tax dollars pay to move them and dump them in the landfills. Your tax dollars continue to subsidize the oil industry too, which makes a pretty penny off of our irrational reliance on these plastic bags.

Just something to think about the next time the cashier at your local supermarket offers you a plastic bag for a gallon jug of milk or a candy bar!

To a new way of life, and a new generation of wealth. . .

Jeff

The Profitable Stocks behind Cash for Caulkers

Last week, President Obama outlined the new Cash for Caulkers program.

While the obligatory partisan punches were not unexpected, most folks seem to be pretty supportive of any program that helps us use our energy more efficiently, and of course, that saves consumers a couple of bucks on their energy bills.

For Green Chip readers, this is nothing new.

We've been singing the praises of energy efficiency for years. Especially as it relates to green building. Because let's face it: Not only is the green building industry good for the economy, it's also good for our portfolio. And I'll tell you about a few of the stocks we like in this industry in just a moment.

But first, let's just recap a few important green building figures.

The Coming Nuclear Renaissance

If there were a company making a nuclear fuel that:

Instantly makes power plants operate 25% to 50% more efficiently, saving billions upon billions of dollars in operating costs, every year
Prevents any Chernobyl-like meltdowns from ever happening again and
Drastically slashes the radioactive life of spent uranium

You'd want to know about it, right?

The full report - including why the company behind it could triple in price - is available here.

According to a 2009 green jobs study from Booz Allen Hamilton and the U.S. Green Building Council (USGBC), green construction spending currently supports more than 2 million U.S. jobs and generates more than $100 million in GDP and wages.

The report also found that green building will support 7.9 million U.S. jobs and pump $554 billion into the U.S. economy — including $396 billion in wages — from 2009 to 2013.

Not a bad window for those seeking to profit from the early stages of green building momentum.

Of course, opportunities in green building can be found in more than one place.

There's the most obvious, power generation. And for buildings — especially those in regions with strong solar resources — solar's potential remains solid.

Going forward, we believe the best stocks in solar are still with those manufacturers that retain a significant cost advantage. And these are almost all Chinese players.

In 2010, we remain bullish on Suntech Power (NYSE: STP), Yingli (NYSE: YGE), JA Solar (NASDAQ: JASO), Canadian Solar (NASDAQ: CSIQ), and First Solar (NASDAQ: FSLR). The latter has recently picked up some negative publicity due to its exposure to the German market. But overall, First Solar's cost advantage continues and its utility-scale future remains bright. I would caution against underestimating First Solar's potential in 2010.

There's also energy efficiency and conservation.

While there are certainly opportunities here for companies developing energy efficient windows (and of course, the insulation manufacturers), the more pure play efficiency and conservation opportunities continue to be in demand response.

For our money, we maintain our bullish outlook on both EnerNOC (NASDAQ: ENOC) and Comverge (NASDAQ: COMV).

And then there's lighting, which accounts for 11 percent of the energy use in residential buildings and 26 percent of the energy use in commercial buildings. This is a huge opportunity.

Cree (NASDAQ: CREE) has long been a favorite for LED investors. And for good reason... The company maintains a significant leadership position in the market, and guidance remains solid.

We also like a small, below-the-radar stock called Energy Focus, Inc. (NASDAQ: EFOI). It may not get as much attention as Cree, but the company has some solid partnerships with the U.S. government. We believe this will continue to help the company land some very important — and very profitable — government contracts.

Another Piece of a Very Profitable Puzzle

Aside from energy, green building also boasts sustainability features such as water reclamation systems, environmentally-friendly paints, coatings and sealants, and sustainable building materials. Even eco-friendly flooring gets a nice boost from green building momentum. Interface, Inc. (NASDAQ: IFSIA) is a company that will continue to take advantage of this opportunity with its environmentally-friendlier modular carpet designs.

As a side note, Interface has long been a champion of sustainability, even boasting a goal of achieving a zero environmental footprint by 2020.

My point is this: the Cash for Caulkers program supports just one more piece of a very profitable puzzle for Green Chip investors.

And you better believe we're going to continue to profit every step of the way.

To a new way of life, and a new generation of wealth...

Jeff

Cash For Caulkers

President Obama is set to outline today the details of the "cash for caulkers" program.

With a price tag of about $6 billion, the program will provide incentives for folks to make their homes more energy efficient. Whether its new insulation, energy efficient windows (which I can tell you from personal experience can save you a small fortune in energy costs), or any other major or minor energy upgrade, the new program is designed to stimulate job growth and help consumers save a few bucks on energy costs.

There's no doubt that improving efficiency is one of the easiest and quickest solutions to our energy woes. And I suspect there will be few political obstacles on this one.

Of course, "cash for caulkers" isn't quite as sexy as "cash for clunkers." Consumers tend to be more interested in the cars they drive than the insulation in their attics. So it will be interesting to see how they promote it.

Nonetheless, this should provide a quick boost to those companies that will undoubtedly benefit from this program, like Owens Corning (NYSE:OC), Home Depot (NYSE:HD) and Lowes (NYSE:LOW). Of course, given the state of today's still very-fragile market, who knows if it will be enough to matter much. It really has become a never-ending battle of optimism versus broader market reality.

But the very real benefits of energy savings could still make this program worthwhile. Long-term economic sustainability depends on smart energy decisions today. Making our homes more energy efficient is definitely a step in the right direction.

Jeff

Arizona Anti-Solar Bill Defeated

On Wednesday, I told you about a new Arizona bill (House Bill 2701) that was designed to essentially kill the state's solar industry. It was intended to allow nuclear and hydroelectric power to be included in the state's renewable energy standard, which requires 15 percent renewables by 2025. With nuclear and hydroelectric inlcuded, there would have been zero incentive to integrate solar or any other type of clean, renewable energy.

The new bill would've also done away with the state's distributed energy standard, which requires 30 percent of all renewable power produced by utilities to come from rooftop systems.

Well, it looks like that bill was killed on Thursday after a flood of opposition forced a few less-than honorable policy makers to backpedal.

One very influential opponent to the bill was Suntech Power (NYSE:STP), which made it crystal clear that the state could very well lose the company's new manufacturing facility that would ultimately end up creating a lot of jobs for currently-unemployed Arizona residents.

Of course, it didn't take long for one bureaucrat to complain that the Legislature was being unfairly criticized as being anti-solar. According to House Speaker Kirk Adams, the Legislature has done several things in the past year to bolster the solar industry's efforts. Particularly SB 1403 which provides incentives for bringing high-wage manufacturing to the state.

So the question is, if these guys are so pro-solar, why would any of them support a bill that would essentially gut the industry's progress in the Grand Canyon state?

It's all politics. It's always politics with these guys. But thankfully, enough folks were fired up enough to let these guys know that solar will not be an afterthought in the state's energy mix.

Jeff

Arizona Solar Bill

What an absolute joke!

I have no other way to describe how I felt after reading about Arizona's House Bill 2701.

Essentially this bill would allow nuclear and hydroelectric power to be included in the state's renewable energy standard, which requires 15 percent renewables by 2025.

Now I'm not here to bash nuclear, but this is Arizona folks. The state has some of the most impressive solar resources in the world! If there's any state in the U.S. that should embrace solar, it's Arizona.

Of course, all of this clearly smells of politics.

There's absolutely no reason any honest policy maker in the Grand Canyon state should want to deter solar progress. It's a job creator, it's a source of clean energy, and it helps alleviate the need for rapidly depleting fossil fuels.

The new bill would also get rid of the state's distributed energy standard, which requires 30 percent of all renewable power produced by utilities to come from rooftop systems. What a great way to kill even more jobs!

This is an absolute travesty, and those who have introduced and supported this bill should be held accountable for their actions. Especially Representative Debbie Lesko, who apparently objected to a $4 per month fee for residential customers that supports Arizona's renewable energy standard.

My question is, does Lesko object to the millions of dollars that hard-working Americans shell out to subsidize oil, coal, natural gas and nuclear?

Don't urinate on my leg and tell me it's raining!

This is bureaucratic bullshit at it's finest. Somebody's getting a kickback here, and it ain't the good people of Arizona.

Jeff

Debating Climate Change

It's always shark-infested waters when I report on climate change news.

On one side, there are those who think climate change is some kind of liberal conspiracy designed to crush the U.S. economy. On the other, there are those who believe it's the most pressing environmental issue facing the world today; believing we can just flip a switch and end our reliance on fossil fuels overnight... if we only had the will to do so.

Now I'm not so naïve to believe that we'll ever come to any kind of meaningful and honest agreement on climate change. At least not with the debate being fueled by so many ill-informed and overzealous environmentalists and all that oil and coal money that continues to line the pockets of our elected officials and fill the coffers of television advertisers and big PR firms.

But one thing is certain: The effects of a changing climate are not being overlooked by the military.

Make 171% as New Gov't Agency Seizes Power Grid

Stronger and more feared than the IRS, FBI -- even the U.S. Department of Homeland Security...

This radical jack-booted agency has one single mission: to enforce new energy policies.

With a budget of $30 billion, this powerful shadow-branch is systematically eradicating old energy technologies and awarding lucrative contracts to companies of their choice.

Luckily, we know the companies about to get the dough... making their shareholders a fortune. It's all in this new report.

A Military Position on Climate Change

Last week, Jordan announced its plans to help fight climate change by having its military upgrade engines and old vehicles and by using new energy-saving technologies.

This announcement picked up a decent amount of coverage, and I noticed that there was quite a bit of ranting and raving in online comments sections about how the U.S. military needs to do the same.

But the truth is, the U.S. military isn't a laggard at all in this area. In fact, we even dedicated a section to this issue in our book, Investing in Renewable Energy.

Here's an excerpt written by my colleague, Chris Nelder:

In 2004, a leaked report from the Pentagon predicted that rapid climate change may well set off global competition for food and water supplies and, in the worst scenarios, spark nuclear war. "Because of the potentially dire consequences, the risk of abrupt climate change... should be elevated beyond a scientific debate to a US national security concern," it said.

In April 2007, a top panel of 11 retired military brass from all branches of the military, including five admirals and four generals, released a report that came to similar conclusions. Entitled "National Security and the Threat of Climate Change," it was commissioned by the Center for Naval Analyses, a nonprofit government-funded think tank. Though initially several of the authors were skeptical of the topic, they spent months meeting with climate scientists, business leaders, and other experts, and found the experience "very sobering." Their conclusion was,"Climate change is a national security issue."

They said that the security consequences of climate change should be fully integrated into national defense strategies, and "the intelligence community should incorporate climate consequences into its National Intelligence Estimate." In other words, they insist that we stop pretending that climate change and defense are separate issues, and start working on them together.

In March 2007, the US Army War College sponsored a two-day conference on the subject, entitled "The National Security Implications of Global Climate Change." This marked the first time that we have ever heard a military expert connect global warming with the global war on terror: "Climate change can provide the conditions that will extend the war on terror," said retired Admiral T. Joseph Lopez, former commander-in-chief of US Naval Forces Europe and of Allied Forces, Southern Europe.

Why is this so? Because it's a "threat multiplier," exacerbating the conditions that tend to breed terrorist groups in volatile parts of the world, such as water and food shortages. For example, the report notes, nearly half the world gets about half of its drinking water from melting snow and glaciers that are quickly disappearing. The authors note that migrations of environmental refugees, strained border relations, and resource conflicts will make it hard for states to meet the basic needs of their residents, which will lead in turn to security problems.

But the climate change threat affects us all, as report author Vice Admiral Richard Truly admits: "It's going to happen to every country and every person in the whole world at the same time."

The report also showed that the commanders were wisely taking a long-term view of the problem. Said retired Marine Corps General Anthony C. Zinni, former commander of US forces in the Middle East: "We will pay for this one way or another. We will pay to reduce greenhouse gas emissions today, and we'll have to take an economic hit of some kind. Or, we will pay the price later in military terms. And that will involve human lives. There will be a human toll."

So, clearly a changing climate is not being overlooked by the military. Nor is it being overlooked by those companies working with the military to reduce energy consumption. After all, if you want to reduce greenhouse gas emissions, you have to reduce fossil-fuel based energy consumption.

Whether its Lockheed Martin (NYSE: LMT) advancing efficiency technologies; Honeywell (NYSE: HON) providing foam insulation on tents (which in Iraq can cut the need for air conditioning by 45 percent); or Energy Focus (NASDAQ: EFOI), working with the United States Navy to implement ultra efficient LED lighting for Navy ships... there's definitely a market here, with a number of opportunities for Green Chip investors.

So feel free to continue the climate change debate all you want. But don't sleep on the opportunities that will continue to provide us with profits.

To a new way of life, and a new generation of wealth...

Jeff

Tea Party Alternative Energy

I have to be honest. I don't know much about the Tea Party movement. But as someone who sees our two party system as offering little more than the illusion of a real and effective democracy, I applaud any group that stands up and forces the status quo to take notice.

In fact, after doing a little research, it seems to me that the Tea Party - based on their core beliefs - should actually be a very pro-alternative energy party.

You see, there's little doubt that the Tea Party champions real fiscal responsibility. No more excessive taxes, a balanced budget and no excessive national debt. This is all great stuff, and you'll get no argument out of me.

But if we take a look at where we are today, you will find that much of our economic burden can be traced back to our reliance on fossil fuels. Certainly the tax burden is real.

According to the Environmental Law Institute, from 2002 to 2008, subsidies for fossil fuels totaled approximately $72 billion. And for those quick to play the "renewable energy can't compete without subsidies" card, know that during the same time, subsidies for renewables came to about $29 billion. And of those renewable subsidies, more than half were set aside for corn-based ethanol - providing even more kickbacks for an already heavily-subsidized agricultural system that typically excludes small, local and organic farms.

You can read the details of that report here.

There was also a very interesting study that came out a few years ago that showed the security costs of having the U.S. military protect the oil supplies of the Persian Gulf. That bill came to around $44 billion in 2007.

And don't forget that little-known, and somewhat hidden DOE study from 2000 which found that oil supply disruptions, price hikes and loss of wealth suffered through oil market upheavals have cost the U.S. economy around $7 trillion (in 1998 dollars) over the thirty years from 1970 and 2000.

My friends, that's more than half the total U.S. national debt!

Now you won't see any of this stuff figured into the equation when you pull into the gas station. But the truth is, if we weren't directly and indirectly subsidizing our reliance on oil, we'd be shelling out anywhere between $8 to $10 a gallon for 87 Octane.

That's not a free market. That's a welfare scam. And you better believe that if we were paying the real cost of gasoline, it wouldn't take long for the entire country to rally around Plug-In Hybrid Electric Vehicles, high-speed rail and expanded mass transit, and more walkable communities.

Of course, many, including Tea Party supporters have championed increased domestic oil production as the solution to our oil supply problems.

But if the Tea Party is legitimately concerned about national security (which from what I've read, they clearly are), then I would think their support for domestic drilling (at least as far as it being the solution to our energy woes) would be very limited.

I'm not so naïve to believe that we can transition our energy economy without a continued reliance on domestic oil. But it cannot be looked at as anything more than a transitional vehicle. Because the truth is, domestic oil production can never meet our total consumption needs.

As far as domestic offshore oil is concerned (and this is where most of our domestic supplies can be found), the DOE's Energy Information Administration tells us that we have about 59 billion barrels of "technically recoverable undiscovered" offshore oil. This is not proved reserves, by the way.

However, the USGS tells us we have about 85 billion barrels of "technically recoverable undiscovered" offshore oil. So let's play the role of the optimist, and go with the USGS numbers.

Now U.S. demand is around 6.7 billion barrels per year. Assuming there were 85 billion barrels of domestic offshore oil for us to consume, this would give us about a 12.7-year supply. And that's based on current rates of consumption and the assumption that there will be no demand increase going forward. Clearly not a safe assumption to make.

Then there's ANWR, which the USGS tells us could deliver about 16 billion barrels - or about a 2.4-year supply.

So between ANWR and offshore, we're looking at about a 15-year supply. But don't forget flow rates.

Even if we tapped every ANWR and domestic offshore resource today, the flow rate of that oil would still dictate how much we can produce. That would come in at around 3 million barrels per day. Sorry folks, that's not going to cut it.

Of course, we do have those tar sand resources. Although with a limited history, we have little in the way of good data on long-term production rates. There's also the issue of net energy return. In the case of these tar sands operations, you'll find that most legitimate energy analysts will agree that it takes more energy (primarily natural gas inputs) to produce this oil than is actually delivered. For those trying to make a quick buck, this is not an issue. But for the sake of long-term energy security, this is not something we can rely on for our future transportation fuel needs.

Treehugging Tea Parties?

I would also make the case that the Tea Party movement should support an aggressive environmental agenda.

You see, I have noticed that Tea Party supporters are very vocal about the right to protect themselves and their families, often focusing on the importance of the 2^nd amendment as a way to secure this right. Bottom line: You have every right to protect and defend yourself. And I certainly support that right every step of the way.

But just as I have the right to protect myself from a home invasion or a car jacking, don't I also have the right to protect myself against those who are harming me and my family by poisoning our air and water?

Think about it. You can't live without clean water. And if you want to see what toxic air can do to you, take a look at the average lifespan of a Beijing traffic cop, which is 43. It ain't car accidents and lack of job fulfillment that are to blame. If you've ever had the opportunity to wade through the thick smog that blankets Beijing during rush hour, you know exactly what I'm talking about.

So, it seems to me that Tea Party members would agree that it's completely acceptable to do whatever you can, legally, to protect yourself and your family from any operation that denies us clean water and air.

These include, but are not limited to. . .

Tar Sands Operations - It takes between two and four barrels of water to extract one barrel of oil from a tar sands operation. And once the water has funneled through the production process, it becomes toxic, and cannot be released back into the environment. While some is reused, most is pumped into large settlement ponds that become polluted with heavy metals. In Alberta, a recent University study found that the expansion of the sands projects there could kill the Athabasca River - the only abundant source of water in the area, supplying fresh water to two northwest territories, 300,000 aboriginal people and the Mackenzie River Basin, which is Canada's largest watershed. Are we going to do that to our own water supplies for a few years of oil?
Coal-Fired Power Generation - A typical 500 MW coal-fired power plant draws about 2.2 billion gallons of water each year from nearby lakes, rivers and oceans; relies on the transportation of coal, which relies on subsidized petroleum; and generates 170 pounds of mercury. It only takes 1/70^th of a teaspoon in a 25-acre lake to make fish unsafe to eat. Kind of puts a damper on that next fly fishing trip, huh?
Industrial Agriculture - Industrial agriculture has become a huge drain on our resources. Irrigation systems are pumping water faster than they can be refilled, an over reliance on pesticides is disrupting the food chain, and massive amounts of synthetic fertilizers are draining into our water systems causing algae blooms to form. These algae blooms can suffocate marine life that many hard-working Americans rely on for food and income-generation.

So how do you protect yourself from these operations?

You stop giving them your tax dollars, and you add in every bit of environmental damage to their operational costs. It's not a new concept. You make a mess, you clean it up.

Will that trickle down to the consumer? You better believe it. But if you want a real free market, you better be ready to start paying the real, unsubsidized costs for goods and services. I don't know about you, but I prefer that to what we have now - a system that takes your hard-earned money and hands it out to folks that are making your water unsafe to drink, and your air unsafe to breathe.

Of course, when you stop subsidizing the oil, coal and industrial agriculture machines, you quickly see the real value of clean energy generation and responsible, non-polluting agricultural systems.

No matter how you slice it, there is just much less in the way of water and air damage with renewable energy, energy efficiency and conservation measures and sustainable agricultural systems. Not to mention, with alternative energy sources, you also get an extra bang for your independent buck.

It's no secret that the Tea Party desires freedom and independence. I proudly wave that flag too, and believe those who seek real independence must also be staunch environmentalists and alternative energy advocates.

Think about it...

With solar PV on the roof or a residential wind turbine in the backyard, you can produce clean energy and become completely independent of the grid. This ultimately provides economic independence as well as energy independence.

And with your own personal garden or greenhouse, you can grow your own fruits, vegetables and grains - thereby eliminating the reliance on heavily subsidized agriculture. And take it one step further by going organic. This eliminates the reliance on pesticides and synthetic fertilizers - both of which require fossil fuel inputs to create. Fossil fuels that are, you guessed it - subsidized.

In theory, it does seem that the Tea Party's call for fiscal responsibility, free markets, and personal liberty makes it a strong environmental and alternative energy champion.

But will they put their money where their mouth is?

Will they support alternative energy integration and environmental protection and preservation?

If they truly practice what they preach, they will.

If not...

Well, they'll prove to be nothing more than just another bullhorn for empty rhetoric, and just as useless as the jackass and the elephant.

Jeff

Investing in Green Chip Stocks

A doctor walks into an examining room and tells his patient that he has some good news and some bad news.

The good news is that his tests show he has 24 hours to live.

The patient asks, "What's the bad news?"

To which the doctor replies, "I meant to tell you about this yesterday."

Timing is everything, my friends.

And while jokes about bad timing can certainly give you a good laugh, there's nothing funny about it when you're at the losing end of a poorly-timed trade...

Big Pharma's Survival Strategy

$7.5 billion a year in research and development is simply too big a pill for Big Pharma to swallow.

That's why they're buying out their breakthroughs for pennies on the dollar.

And their biggest target right now... is one I'm guaranteeing with my own money.

Learn all about it right here.

I certainly got a dose of that bitter pill when I first began studying energy markets back in the early 1990s.

You see, the more I read and the more I learned, the more I was convinced that this very dangerous and unsustainable fossil fuel foundation on which our energy economy was built would ultimately leave us vulnerable to economic and environmental catastrophe.

There was no swaying my belief that alternative energy solutions were the only way by which we could avert disaster. So I began sharing what I had learned, and I also jumped on a few early alternative energy startups that, well, went belly up.

Now understand that these were not bad companies...

Management was always top-notch; the technology was about as advanced as it came back then; there was definitely some big money backing these operations. In fact, most of the guys I knew back then are now major players in the alternative energy industry.

But none of that mattered back then. Because, while it was obvious to me that we would not be able to quench our future thirst for energy with only conventional fossil fuel resources, no one else seemed to know it — or even cared to discuss it.

The fact is back in 1993-1994, you would've been hard-pressed to find more than a dozen investors who knew about peak oil, the liquidation of natural capital, or the billions in subsidies that have kept the fossil fuel machine purring for all these years.

You weren't going to read about this stuff in Newsweek; you weren't going to hear it from the major news organizations, and you know damn well the politicians weren't going to bring it up.

But all that has changed. And today, there's a wealth of data available for any investor willing to take the time to do the research. Not to mention, literally hundreds of alternative energy stocks to choose from.

Of course, there is one thing that hasn't changed — and that's the importance of timing.

Is the Timing Right for these Green Chips?

In 2009, timing allowed us to help a lot of investors make a lot of money. Especially in energy efficiency, where our Comverge (NASDAQ: COMV) play delivered gains in excess of 145.5%, and our EnerNOC (NASDAQ:ENOC) play finished the year with a gain of 321.07%.

But as the year came to close, I began cautioning against a market that was just getting too hot — especially considering the still very volatile global economy.

This is the reason editors Nick Hodge, Sam Hopkins, and I have only provided coverage on a few stocks so far this year.

Bottom line: The timing simply hasn't been right for the kind of buying spree we witnessed last year after the market bottomed out.

But it's getting pretty damn close again. Especially in solar, where an overreaction to a German feed-in tariff cut put additional downward pressure on a broader market-driven decline...

It was a double whammy that has pushed a number of quality solar stocks down to some pretty attractive levels.

Especially the Chinese players.

You see, while a cut in the German feed-in tariff (which is absolutely necessary if you want to avoid a massive bubble) will not make life easy for German manufacturers, the Chinese manufacturers — with their significant pricing advantages — will inevitably benefit from new market share.

The first half of this year will still be a bit bumpy. But by the end of the year, it will be many of these Chinese players profiting big time from Germany's solar market — this, by the way, is not insignificant.

This is a very pro-solar country, representing about 50 percent of the global market for photovoltaics (oddly enough with nowhere near the solar potential as in the United States), a pro-solar government, and pro-solar banks with relatively deep pockets for financing.

So in an effort to capitalize on what is sure to be a continuation of China's solar dominance going forward, we're looking to pick up shares of the following Chinese solar stocks on major dips:

Yingli Green Energy (NYSE: YGE)
JA Solar (NASDAQ: JASO)
Canadian Solar (NASDAW: CSIQ)
Suntech Power (NYSE: STP)
Trina Solar (NYSE: TSL)

At current levels, I have little doubt that these stocks will deliver gains of anywhere between 10 to 30 percent by summer — assuming the market doesn't implode again. And for sake of clarification, I wouldn't necessarily cross that off as a possibility, either.

Again, it's all about timing.

But while it's impossible to pinpoint the bottom with complete accuracy, it doesn't take a rocket scientist to know a bargain when you see one.

And as we learned last year, those who are in it for the long haul — and can exercise a little patience — will be rewarded.

To a new way of life, and a new generation of wealth...

Jeff

Scott Brown Energy Agenda

Sometimes, talking politics in these pages can incite a hostile response.

Certainly those less-than cordial messages that show up on our message board from time to time remind me of this. But rest assured those messages don't dissuade us.

Because bottom line: When it comes to investing in energy, it's imperative to pay very close attention to what's going on in Washington. Like it or not, policy can dictate the performance of various energy sectors.

We've seen proof of this with President Obama and his alternative energy agenda.

Although despite the overwhelming evidence that proves renewables to be both environmentally and economically superior to fossil fuels — don't think for a second that the backward fossil fool mentality in Washington has gone gently into that good night just because the President's supporting the transition to clean energy.

Take Democrat Robert Byrd, for instance. The West Virginia Senator is often the first to sing the praises of coal while folks in his home state have had to sit by and watch roughly 2,000 miles of their streams be buried in mining debris, due to the highly unsustainable practice of mountaintop removal.

Or Republican Jim Inhofe, who has blatantly and unapologetically lied about the cost of climate legislation. The Oklahoma Senator has been quick to call out some climate scientists for manipulating data — yet Inhofe doesn't seem to have a problem manipulating his numbers when it suits him.

The point is, we always have to monitor the actions (and words) of those on the Hill.

Because not only can these actions (honest or dishonest) affect our portfolio, they can also deter progress on the kind of alternative energy development that will help provide a safer, cleaner, and more economically-sustainable energy economy.

And this is why we've decided to take a closer look at newly-elected Senator Scott Brown's position on energy and the environment.

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Don't Rush to Judgment

He flipped the switch on the Democrats' reign in Washington. And now, many Democrats are worried that Scott Brown will put the kibosh on any kind of quality environmental and energy legislation.

Of course, this assumes that all Republicans seek to stall clean energy progress. And that's definitely not the case. Especially for those who represent states that are now home to wind farms, turbine manufacturing facilities, and geothermal power plants. You know, the types of things that provide jobs and revenue!

It also assumes that Scott Brown — because he is a Republican — has zero environmental credibility.

But that may not be the case. And rushing to judgment on something like this accomplishes little more than continued partisan bickering.

The fact is if you step back and take a look at Brown's track record, you'll find that his position on some of these issues may not actually be so black and white.

For one, Brown supported Massachusetts' Ocean Management Plan. This is a plan that sets standards for the development of offshore wind and tidal energy projects. It also provides protections for environmental resources in about 60 percent of Massachusetts' coastal waters.

However, Brown also opposes the Cape Wind Project, saying that putting turbines in that location would be like putting turbines on Boston Common.

Well, at least he admits it's about the location and didn't try to manufacture an excuse like so many other opponents have...

Brown also supported the 2008 Green Communities Act, which provided the Commonwealth's 25 percent by 2030 renewable portfolio standard.

Now we know that Brown is not a supporter of Cap & Trade, but he seems to support reducing emissions through conservation efforts and by integrating more wind and solar. Of course, Brown is also a huge supporter of nuclear, which while there are no emissions issues, there are still plenty of environmental issues that are too often swept under the rug.

Don't Blame Me, I Voted For. . .

Of course, at the end of the day what matters most is what Brown will offer going forward. We hope folks will at least give the Senator a chance before launching partisan criticisms.

We all know that it's not uncommon for people these days to go out and print up "Don't Blame Me I Voted For..." bumper stickers or attack the other side because, well, they're on the other side. But when we talk about the environment and we talk about energy, we can't continue to waste time on such nonsense.

Because while all those flag-waving hypocrites disguised as patriots are busy throwing around empty rhetoric and Thomas Jefferson quotes, we're spending more than $500,000 every minute on foreign oil.

And while all those talk show bullies and D.C. spin doctors continue to mock environmental sustainability efforts, we're quickly depleting our limited fresh water supplies, allowing tar sands operations and coal-fired power to take precedence over the one thing we can't live without — water.

This is NOT acceptable.

Not for the environment and not for the economy. And make no mistake about it — both are connected.

To a new way of life, and a new generation of wealth. . .

Jeff

DOE Wind Report

The U.S. Department of Energy's National Renewable Energy Laboratory has just released its latest study on the technical, operational and economic issues facing the integration of increased wind energy.

According to the report . .

There are no fundamental technical barriers to the integration of 20% wind energy into the electrical system, but transmission planning and system operation policy and market development need to continue to evolve in order for these penetration levels to be achieved;
Without transmission enhancements, substantial curtailment of wind generation would be required for all of the 20% wind penetration scenarios;
Interconnection-wide costs for integrating large amounts of wind generation are manageable with large regional operating pools, because increasing the geographic diversity of wind power projects in a given operating pool generally makes the aggregated wind power output more predicable and less variable, while also reducing the variation in load and increasing the number of generation assets that can be committed and dispatched;
Although the costs of aggressive expansion of the existing grid are significant, they make up a relatively small piece of the total annual power system costs in any of the scenarios studied;
Wind generation displaces carbon-based fuels, directly reducing carbon dioxide emissions. Emissions continue to decline as more wind generation is added to the energy supply; and
Reduced expenditures on fossil fuel costs more than pay for the increased costs of transmission in all wind scenarios.

The newly published report consists of wind resource assessments, transmission studies and wind integration studies.

Jeff

Cape Wind Project

Yesterday afternoon, the U.S. Interior Department announced that it will issue a final decision on the Cape Wind Project by the end of April.

As you know, this has been a very long and costly battle for both supporters and opponents of the project. Supporters claim that the project will boost Cape Cod's economy, have minimal impact on fishing (and may actually increase fish stocks), preserve the natural beauty of the Cape, and provide an average of 170 megawatts - which is nearly 75% of the average electricity demand for Cape Cod and the Islands of Martha's Vineyard and Nantucket.

But opponents of the offshore wind farm would ruin the natural landscape, end up being too costly for consumers and pose hazards to marine vessel navigation. As well, Native Americans in that region are now saying that the project will interfere with their age-old spiritual rituals and ancestral grounds.

Now I'm certainly not on the inside of either camp. But you simply cannot avoid the fact that there's an awful lot of well-funded political influence behind the opposition. Influence that certainly wouldn't exist if the views in that region weren't so spectacular and contributed to some extremely high property values.

Nonetheless, many analysts believe that if the Cape Wind Project doesn't happen, it could be a serious blow to future offshore wind development. But we don't buy that for a second. Mostly because you simply won't find the same kind of well-funded political influence in the offshore areas of New Jersey, Delaware and Maryland, where future offshore development is almost certain.

Jeff

North American Auto Show

On Monday, we took a look at a few of the electric cars that are turning heads at the 2010 North American Auto Show.

But here are a few more highlights that deserve some attention. . .

GM Vice Chairman Bob Lutz announced that GM will build a pure-electric vehicle by expanding the Volt's battery pack and removing the internal combustion engine.
Ford Motor Company announced it would invest $450 million to build its next-generation hybrid and a rechargeable plug-in hybrid in Michigan starting in 2012.
Toyota showed off its FT-CH hybrid electric concept, which is basically a smaller version of the Prius. No details on fuel economy, but I suspect it'll come in higher than the 50 mpg Prius.
The new Tesla Model S made its first auto-show debut.
The Ford Fusion Hybrid won Car of the Year and the Ford Transit Connect van won truck of the year.

To see a full list of all the new electric and plug-in hybrid electric vehicles that are coming to market, check out our report: The Electric Car Revolution Starts Now!

Jeff

Green Side of the 2010 Detroit Auto Show

In 1986, I bought my very first car. It was a red 1980 Chevy Chevette. And I loved that thing.

I drove it everywhere — from to Boston to DC to Atlanta, that little red Chevette gave me a sense of freedom that I had never before experienced. And I treasured that freedom.

Sure, I had to work a lot of overtime at the pizza shop to afford it ($600 seemed like a fortune back then). And insurance is never cheap for a 16-year-old kid...

But none of that mattered. Because as long as I had my car, I could go anywhere at anytime. And it's that sense of freedom that I believe every 16-year-old feels the first time he gets behind the wheel of his very first car.

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As an adult, little has changed for me.

Sure, these days I take the light rail to work. (Why pay for gas and parking if you don't have to?) But I still love taking those long road trips from time to time. And I still love checking out all the new cars coming to market.

Especially the latest electric and plug-in hybrid electric vehicles. And there's certainly no shortage of them this year at the 2010 North American Auto Show.

GM's Voltage Continues

At this year's 2010 North American Auto Show, a number of new electric, plug-in hybrid electric, and other fuel efficient offerings are being unveiled.

In fact, we're even seeing the debut of a 37,000-square-foot feature called the Electric Avenue. It is here, on the main floor, where more than a dozen new electrified vehicles will be showcased.

Of course, everyone knows about the Chevy Volt, which is expected to roll out later this year. But GM Vice President Bob Lutz did announce yesterday that GM is now making a Cadillac version of the Chevy Volt.

Using technology developed for the Volt, the Cadillac Converj is expected to hit showrooms in 2013.

The Converj originally debuted as a concept car at last year's Detroit Auto Show.

Nissan Electrifies

Also expected to hit showrooms this year is the Nissan Leaf.

This is Nissan's electric hatchback that boasts a 100-mile all-electric range, with a top speed of about 76 mpg.

While I'm definitely excited to see the LEAF zipping through the streets of Baltimore, it should be noted that this is an all-electric vehicle — not an extended range electric vehicle, like the Chevy Volt. So cost comparisons should be taken lightly when read in press releases.

Yes, the Nissan will likely cost about $15,000-$20,000 less than the Chevy Volt. But it is not really meant for trips longer than 100 miles... unless you have a few hours to stop each time and charge up.

The Chevy Volt, on the other hand, can road trip with the best of them; once the initial charge on the Volt is depleted, the gas engine kicks in.

That being said, if you're not looking for anything more than local driving, certainly the LEAF could be an excellent vehicle.

A few other exciting vehicles on display in Detroit this week include:

An electric version of the Fiat 500 minicar boasting 150 miles per charge (according to British magazine AutoExpress.)
The Volvo C30 Electric Car — 90 miles per charge
BMW Concept ActiveE — 100 miles per charge
Mitsubishi MiEV — 80 miles per charge
Think City — 100 miles per charge.

In Another 10 Years...

Ten years ago, highlights at the 2000 Detroit Auto Show included gas hogs like the Chevrolet SSR and the Hummer H2.

There was only one electric offering back then, and that was the Think City.

As an interesting side note, the Think City was originally owned by Ford at the time of the 2000 Detroit Auto Show. But in 2003, the company sold it to a Swiss company called Kamkorp Microelectronics. Then in 2006, Norwegian investment group InSpire bought it.

Now, just last week, Think announced it would build its first car for the U.S. market in Indiana starting in 2011. The company plans on selling its vehicle in the U.S. in late 2011 by importing vehicles assembled in Finland. The import sales will arrive before U.S. production starts.

While it's great to see these things built and sold in the U.S. — finally! — that was one hell of a runaround to get from point A to point B.

Nonetheless, here we are today at the North American Auto Show, and there are nearly 20 electric offerings.

So just imagine where we're going to be in another 10 years...

According to research firm CSM Worldwide, nearly half of all vehicle nameplates sold around the world (about 20 million vehicles) will offer some form of electrified propulsion technology by 2020.

Now, only one million are expected to be built with electrified propulsion systems in the U.S. — and most of those will be mild or full hybrids. But in Japan and Korea, electrified vehicles will account for about 3 million; in Europe, about 15 million!

Of course, the folks in Europe also have the unfamiliar burden of paying a more realistic price for their gasoline and diesel. And to be honest, until we start paying a more realistic price for our gasoline, the U.S. will likely lag and continue to hand off progress to other parts of the world.

As a U.S. citizen who loves to drive, this is certainly a point of frustration. However, as an investor, we know that borders don't present obstacles for us when it comes to profiting from the electric car revolution.

From high-performance battery manufacturers in China to electric propulsion system companies in Canada, we will continue to profit from this movement every step of the way.

In fact, my colleague Sam Hopkins is heading to Peru tomorrow to investigate a new lead for us. I can't wait to see how this one pans out. He'll have an update for all of us from Lima later this week.

To a new way of life, and a new generation of wealth. . .

Jeff

Wyoming Wind Power

Under new Bureau of Land Management guidelines, about 20 percent of Wyoming is now off limits to wind energy development.

In an effort to protect the sage grouse, which is being threatened by habitat destruction, new wind projects will not be permitted in the grouse's core habitat - which is about 23 percent of the cowboy state. This region is crucial to the bird's survival.

Certainly we're never happy to see obstacles to wind development. However, as we move forward with the integration of renewable energy, it would serve us well to be responsible about it.

The last thing we want to do is create new problems to replace the old ones.

That being said, if we're going to step up our environmental standards when it comes to wind farm development - we should be doing the same with conventional fossil fuel development.

You can't sit there and tell me that it's not alright to throw up wind farms that could threaten the sage grouse, but it's perfectly acceptable to continue to contaminate our air and our fresh water supplies with coal, oil (especially the tar sands), and in some case natural gas production and consumption.

Just something to think about.

As a side note, the new rules in Wyoming do also limit future developments by the oil and gas industry to one oil pad per square mile. Current rules permit as many as 60 well pads per square mile.

Jeff

Green Chip Stocks

2009 was a bizarre and somewhat frustrating year.

We witnessed a welfare mom happily pumping out eight kids (and the irresponsible doctors that helped make it possible)... government bailouts to businesses that deserved to fail... town hall meetings that made a mockery of rational debate in a democratic society.

I tell ya, there were definitely a few days this year when I just had to turn off my computer and walk away. I even found myself avoiding news blogs and message boards, as most have done nothing more than provide bullhorns for venomous rants and conventional energy propagandists.

Of course, even with all the things that made my blood boil this year, 2009 wasn't a complete wash. Especially for Green Chip investors.

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A Prelude to a Green Decade

Love him or hate him, President Obama did provide strong policy support for alternative energy this year. And this has provided some much needed stability in the domestic marketplace. It is this stability that has made it possible for solar panel and wind turbine manufacturers to commit to new manufacturing facilities in the U.S.

Solar, wind and geothermal capacity also continued to grow this year - despite recessionary roadblocks. And the commitment to electrify some of our transportation has finally materialized - albeit in the face of many kicking and screaming Big Auto execs who probably couldn't tell you the price of gas at the pump, much less the REAL price of gas. You know, the one that most folks never see because the whole system has been propped up by taxpayer dollars for decades.

Ugly truths and politics aside, there is little doubt that 2009 really served as a launching pad for a new energy momentum that'll kick into overdrive in 2010.

And from smart grid development to continued renewable energy integration to energy efficiency and conservation measures - on a global scale, this new energy momentum is going to make us rich. Just like it did in 2009.

Take a look at some of our big winners this year. . .

U.S. Geothermal (AMEX:HTM). . .up 89.2% YTD
Comverge, Inc. (NASDAQ:COMV). . .up 139.18% YTD
Suntech Power (NYSE:STP). . .up 57.49% since March
BioteQ Environmental (TSX:BQE). . .up 207.89% YTD
Yingli Green Energy (NYSE:YGE). . .up 176.62% since March
Gaiam, Inc. (NASDAQ:GAIA). . .up 77.83% YTD
EnerNoc (NASDAQ:ENOC). . .up 324.4% YTD

And our most recent play - JA Solar (NASDAQ:JASO) - is up 55.13% since recommending it on November 11.

Of course, we expect to do even better next year - starting with our next big wind energy play.

You see, thanks to a little-known California law that's going to kick in on January 1 - this little wind energy stock is going to become one of the hottest wind plays of 2010. In fact, we expect to see gains in excess of 112% within the first six months of the year. And that's being very conservative.

You can read more about this wind energy stock here.

But if you're looking to get a piece of this one, I strongly recommend getting in before the market opens next Monday.

To a new way of life, my friends...and a new generation of wealth

Jeff

China High Speed Rail

In an effort to expand its high-speed rail network (eventually linking Guangzhou with Beijing), China has delivered what looks to be the fastest rail link in the world.

Traveling at an average speed of 217 miles an hour, the Chinese have once again upped the ante when it comes to cleaner and more efficient transportation alternatives. In fact, China now expects to build 42 high-speed rail lines by 2012. Will they pull off such a lofty goal in such a short amount of time? Hard to say. But I certainly wouldn't bet against them at this point.

As for high-speed rail hopes in the US?

Well, we know the benefits.

According to the US Department of Transportation, high-speed rail consumes nearly 10 times less fuel than cars and six times less than planes.

And the Bureau of Transportation Statistics has indicated that while passenger air travel in the US gets about 45 passenger-miles per gallon of fuel - high-speed rail systems in Japan and Europe deliver efficiency equivalents of about 300 to 500 passenger miles per gallon.

We also know that in Europe, high-speed trains have taken about 50 percent of the traffic where rail trips times are 4.5 hours or less. And on routes where high-speed train times are 2 hours or less, it gets about 90 percent over air transportation.

There's plenty of data that supports the economic, social and national security benefits of high-speed rail. But despite the Obama administration announcing a new vision for high-speed rail (with a few billion in tow), we continue the debate - pushing us further and further behind the rest of the modern world.

Of course, that doesn't mean we won't ever make any headway on high-speed rail. But for now, if you're looking to invest in high-speed rail opportunities - you would be wise to focus primarily on the companies that are developing these systems in China and in other parts of the world.

In the meantime, if you want a real, honest analysis of high-speed rail, I strongly recommend reading this piece by my colleague Chris Nelder.

If you have any opinion on high-speed rail - positive or negative - this is a must read.

Jeff

California Renewable Energy Transmission

The California Public Utilities Commission announced yesterday that it has approved Southern California Edison's new transmission project that will build another 173 miles of new transmission line.

The entire project will cover 250 miles and cost just under $2 billion.

When completed, the new transmission will move up to 4,500 megawatts of renewable energy to Los Angeles and San Bernardino.

Now it should be noted that Southern California Edison is a subsidiary of Edison International. And Edison International has already announced that it expects to invest $20 billion over the next five years to help bring more clean and renewable power and energy efficiencies to consumers.

Southern California Edison is expected to spend most of its money on transmission, distribution and smart meters.

Jeff

Tom Vilsack Biofuel

U.S. Agriculture Secretary Tom Vilsack recently told reporters that we should caution against blaming biofuels for higher food prices, stating that the food versus fuel debate is based on the assumption that where we are today remains static relative to production.

Vilsack went on to say he's convinced that within 10 years with just seed technology, we can produce a 100 bushel increase in yields.

Now the food versus fuel debate is a tough one — there's just too much special interest involved, on both sides of the debate, to get much in the way of objective data. So it's tough to take a position on this one.

However, we still need some clarification on a few other issues before we start cheering 100 bushel increases in yields.

Water

How much water do we need to produce fuel crops?

The fact is there is no more water on the earth today than there was hundreds of millions of years ago. There is no less, either. We can't make it or destroy it. And while our planet may be over 70 percent covered with water, less than 2 percent of it is freshwater, some of which is perpetually tied up as atmospheric moisture or as frozen saturated soil (permafrost) that we can never use.

Put another way, if all the world's water was inside a one-gallon jug, fresh water wouldn't account for even a teaspoon of it!

So is it wise to strain our remaining water resources further just to fuel our vehicles?

Fertilizer

How much synthetic fertilizer do we need to produce these fuel crops?

The folks in D.C. really need to start spending more time analyzing the negative impacts of synthetic fertilizers — which, as you may or may not know, are mostly derived from oil, natural gas, and mined minerals.

This stuff is extremely energy intensive to produce.

You see, in the early 20th century, German chemists Fritz Haber and Carl Bosch developed the Haber-Bosch process: a method for creating ammonia from nitrogen and hydrogen. And this ammonia synthesis accounts for over 99% of all inorganic nitrogen that is used in farming today.

Of the roughly 130 million tons produced globally (110 of which is fixed nitrogen), 4/5 go into fertilizers.

Now, according to a report from the University of Florida Institute of Food and Agricultural Sciences, "The Energy and Economics of Fertilizers," nitrogen (one of the three macronutrients in inorganic fertilizer) sucks up massive amounts of energy: 22,000 cubic feet of natural gas feedstock to make one ton of ammonia that is 82% pure nitrogen. And the processing, packaging, transportation, and application require 52% of the total energy inputs in nitrogen fertilizer.

The U.S. General Accounting Office stated that natural gas is the most costly component used in manufacturing nitrogen fertilizer. So when natural gas prices increased in 2000-2001, U.S. companies that produce nitrogen fertilizer reported adverse financial consequences resulting in much higher production costs.

Of course, even beyond the energy-draining, synthetic fertilizer production — farmers still need to distribute it. And tractors don't run on sunshine and rainbows!

There are the environmental issues, too.

We know that synthetic fertilizers have a tendency to leach excess nutrients into the water — which can cause contamination, endangering fish and amphibians.

It's also important to note that synthetic fertilizers can cause a decrease in organic matter in the soil because they feed the plant, and not the soil. This results in a reduction of soil organisms, making it much more vulnerable to insect and disease infestations.

Pesticides

How much extra pesticide do we need to produce these fuel crops?

Between the very real human health risks associated with pesticide use and the potentially devastating impacts on the food chain (breaking one link in the chain means all of the organisms above that link are vulnerable), we may want to reconsider our feedstock options if it means showering our crops with more of this stuff.

Now don't get me wrong, I'm all for finding new sources of fuel. But we have to be responsible about it. We know there are better feedstocks for biofuels than corn. Especially when it comes to biodiesel, where we can use non-food crops such as algae and jatropha.

Just something to think about.

Jeff

Forecast For Renewable Energy in 2010

In the 1973 movie Papillon (adapted from the 1969 French novel by Henri Charriere), there's a scene where Papillon is considering jumping off a cliff to escape the island on which he is being imprisoned. His friend Dega says, "It seems so desperate. You think it will work?"

And Papillon replies, "Does it matter?"

Papillon had two options: Stay on the island and die, or study the treacherous currents and attempt his escape. Sure, the latter option could end in disaster... but fortune favors the daring. And in this case, Papillon survives the jump and makes it to freedom. He even ends up outliving the prison.

Although not quite as macabre, I do see a similar situation in the way most of us played the market this year. Our options were to "safely" stay on the sidelines, not making a dime; or to study the unreliable ebbs and flows of a very confused market and attempt a profit.

After taking such a lashing in 2008 and early 2009, investors were hesitant but also desperate to free themselves from heavy losses and uncertainty. All of us wanted to start making money again. And while we knew things weren't nearly as rosy as the spin wizards in D.C. had wanted us to believe, we knew at some point we would have to jump back in — and hope for the best.

But make no mistake about it. Our decision to move forward was not one made because things were getting better. Not at all. In fact even as we provided new coverage and made new recommendations, we knew that what we were being fed about the economy was about as reliable as Chinese drywall.

And going into 2010, little has changed.

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Now that doesn't mean there won't be an avalanche of opportunities in alternative energy next year. In fact, based on new technologies, government incentives and continued fossil fuel depletion, Green Chip Investors are going to make a killing in 2010.

But before we get to that, let me just take a moment to put a few things in perspective, so we...

Don't Go into 2010 Unprepared

Over the past year, many of our Green Chip plays have done quite well. And I'm certainly not going to play down our gains.

But it's still questionable as to whether or not the rally we've been witnessing this year is sustainable. I don't think it is.

I know, I know — I'm supposed to be super bullish. And I am when it comes to renewable energy...

But no matter how bullish I am, we can't lose sight of all the things that will continue to weigh on the market in 2010.

Consumer spending is still way down. Commercial real estate is collapsing, and will continue to collapse in 2010. Once the tax credits for new homes come to an end, the magical hand of Uncle Sam will no longer be there to prop up the housing market. Debt continues to build. Millions of Americans are still out of work.

So what was I saying before about being bullish?

Looking Forward to 2010

You know how it goes...

Crisis always breeds opportunity. And there are few crises more urgent than our energy crisis.

Fossil fuel depletion is very real, my friends. And couple that with the reality of climate change legislation and the national security issues directly related to both our oil reliance and our crumbling energy infrastructure, and you've got one hell of an opportunity to profit from the solutions to this crisis.

That's exactly what we've been doing for the past five years — and it's exactly what we'll be doing next year, too!

So let's take a quick look at what we have to look forward to in 2010.

Solar

Over the past few months, you may have read or heard about a "solar glut" or "poly glut" that could potentially have negative impacts on the sector this coming year.

Don't buy it!

All this recent ranting about poly oversupplies is simply misleading.

Sure, large silicon supplies have pushed prices down. And that will likely continue into 2010. But between Chinese and U.S. government support, and continued strength in Germany — at least until the next feed-in tariff cut mid year — there is little doubt that these poly supplies will be consumed rapidly.

Sure, if demand going into 2010 were weak, then yes, this argument would be completely valid. But to dismiss the massive impact of U.S. and Chinese demand in the next 3 to 5 years is simply irresponsible.

Now going into 2010, I believe Chinese OEMs will continue to lead the pack. Probably our favorite going into 2010 is JA Solar (NASDAQ: JASO). Bottom line: JA Solar provides some of the most efficient cells in the space and at an extremely competitive price. Combining both the efficiency advantage and the cost advantage puts JA Solar in a very sweet position.

Also keep an eye on manufacturers setting up shop in the U.S. Their domestic operations will be rewarded with an avalanche of stimulus dollars. That'll provide a nice boost for those stocks.

Wind

Chinese wind turbine manufacturers will also make headway in 2010.

Just like we witnessed in the solar sector, China will be going full force in wind turbine development. And they've already started; they have no choice if they want to reach their very aggressive renewable energy goals.

Today, Sinovel is China's biggest wind turbine player. Although it's not publicly-traded, you can indirectly play the company's momentum with American Superconductor (NASDAQ: AMSC). American Superconductor provides specialty components for Sinovel. To date, the company has more than $100 million in component contracts with Sinovel.

A-Power Energy Systems (NASDAQ: APWR) will also continue to make headway in the Chinese wind turbine market. However, the stock has been flying since September, so I'd be cautious about chasing it right now.

There also seems to be a bit more enthusiasm over residential wind turbines going into 2010. To be honest, I love these things... and I know for a fact they could offer consumers in wind-rich areas an excellent alternative to conventional energy sources and even solar. But I'm still hesitant, as the industry is still dealing with permitting issues that have become a real hindrance to growth. A lot of the bureaucrats in charge of issuing these things don't have a clue when it comes to residential wind turbine installation. And the permitting fees seem to be completely random, depending upon where you live and which bureaucrat lackey you have to deal with.

That being said, I do believe we will make some headway on this issue in 2010, as top-down initiatives from Washington —as well as funding — will force local yes men to get their acts together. And when that happens, I suspect we'll finally see some sustainable growth in residential wind turbine installations.

Geothermal

In the world of geothermal, we're still only dealing with a handful of players. And Ormat (NYSE:ORA) will remain in the top spot in 2010. But one thing we're definitely going to keep an eye on is progress on Enhanced Geothermal Systems (EGS)...and of course, the companies that are working with the government to advance this technology. One in particular that I like going into 2010 is U.S. Geothermal (AMEX:HTM). U.S. Geothermal is actually working with the DOE to demonstrate the viability of EGS at one of the company's geothermal sites. The DOE has already ponied up $6 million for that project so far.

Smart Grid

Smart grid companies did really well in 2009 and I suspect they'll continue to do well in 2010. After all, it's the smart grid that we know will help facilitate aggressive energy efficiency and conservation measures.

EnerNoc (NASDAQ: ENOC) and Comverge (NASDAQ: COMV) will likely stay in the spotlight in 2010, but there will also be some new entries next year. I also think we're going to see some consolidation here, as well. So be prepared for that.

Overall, I think energy efficiency is going to get more attention in 2010 than anything else — including wind and solar.

Electric Vehicles

The year 2010 will be the one in which we'll see the first round of electric and plug-in hybrid electric vehicles from the majors. But as we've written in the past, it will be the battery companies we'll have to focus on for profits.

A123 Systems (NASDAQ: AONE) and Ener1 (NASDAQ: HEV) will probably stay in the spotlight in 2010, as these companies are focusing on both high-performance batteries for electric vehicles and for utility-scale storage applications. I believe the latter will see some serious funding in 2010; that funding will also help continue electric car battery development.

That being said, I wouldn't go chasing these things now. Ener1 looks a little high right now, and I still think A123 is overpriced at current levels.

There's a lot to look forward to in 2010. Momentum has never been stronger, transitions have never been more urgent, and the call to action has never been louder.

In 2010, I'm looking forward to continued technological advancements in clean energy. I'm looking forward to strong government support for renewables (the same kind of support that's been given to oil and coal for decades), and I'm looking forward to helping you profit from the transition to a cleaner, safer, and more economically sustainable energy economy.

So get ready, because it's going to be an exciting and profitable year for all of us!

To a new way of life, and a new generation of wealth...

Jeff

Funding for Renewable Energy Companies

From the Desk of Brian Hicks
Publisher's Note:

If you've ever heard the Chinese proverb "Crisis Equals Opportunity," look no further than the current situation in the emerging renewable energy sector.

This is a verbatim quote, pulled directly from the published transcript of the Ed Schultz show on MSNBC. Not a single word has been changed:

I want to tell you, today I had an interesting conversation with a gentleman named Noel Davis out of Indiana. He‘s a retired U.S. Navy commander. Now he is working on what we call the green sector jobs in America. He wants to make critically needed gear components for wind turbines.

He says he can put some 200 machinists to work right away but what‘s the problem? Money. For over more three months he has been waiting to get a loan guaranty from the Department of Energy.

This is what gives government a bad name. When we can‘t get things fast tracked, when there‘s too much paperwork. This is one of the things I know they talked about at the White House today, streamlining the process, access to capital.

Because I think that there is a lot of Noel Davises out there that want to create jobs if they can get their mitts on some capital and get some people behind them like the government, through the SPA, fast track it, back them up, let them go to work.
— Dec. 4, 2009

Recently, my colleague and rising superstar in the green energy sector, Jeff Siegel, introduced a revolutionary new partnership to meet the crisis described in the above quote. Check it out below.

On October 20, 2008, The New York Times ran an article entitled "Alternative Energy Suddenly Faces Headwinds."

According to the piece:

For all the support that the presidential candidates are expressing for renewable energy, alternative energies like wind and solar are facing big new challenges because of the credit freeze...

‘Everyone is in shock about what the new world is going to be,' said V. John White, executive director of the Center for Energy Efficiency and Renewable Technology, a California advocacy group. ‘Surely, renewable energy projects and new technologies are at risk because of their capital intensity.'

It's been almost a year since that article ran, and I can tell you, small alternative energy companies — both public and private — are still finding it difficult to raise capital or to get credit lines from banks.

Sure, if you're a high-profile electric car company with big backers, like Fisker Automotive, you can get hundreds of millions of dollars in funding rather easily.

Fisker's top investors include Kleiner Perkins Caufield & Byers, a veteran Silicon Valley venture-capital firm of which Al Gore is a partner.

Last September, Fisker received a $529 million loan from the US Department of Energy.

But for every Fisker out there getting the capital they need to be successful, there are 25 companies hitting brick walls because banks have literally frozen their credit lines.

In fact, I can't tell you how many times in the past six months I've been approached at a conference by a small alternative energy company seeking funding.

And being a lifelong green energy advocate, it kills me to have to turn them down. By all accounts, many of these companies have great technology, savvy management, and a solid business plan to bring their product to market. These companies are the future!

But the one thing they lack is money.

The last straw for me came a few months back, when I spoke to a standing room-only crowd at an alternative energy investment forum.

The excitement and attendance was triple that from two years prior. But all the excitement was dampened by an overriding concern for most of the alternative energy companies in attendance: Funding.

"Jeff, I need just a year's worth of capital... and I can bring this product to market. Guaranteed." That was the general theme I heard, time and time again, at this conference.

I really was staring at a sort of crisis situation.

The fact is, for quite a few quality alternative energy operations — capital had dried up... and banks had stopped lending money.

So when I returned to Baltimore, I knew I had to do something about it. I wasn't going to stop until I found the solution. After all, this is my life's work. I spent nearly two years writing a book on it. And I wasn't about to sit by and let great ideas and businesses wither on the vine.

You see, whether it's energy independence from Mideast oil or the preservation of natural capital or jobs, the alternative energy sector is just too important to the security and economic stability of this country. Period. End of discussion.

And because of my position and contacts in the renewable energy space, I knew I could be the bridge between companies seeking capital and venture capitalists and angel investors seeking green companies to invest in.

It didn't take me long to find the solution...

The Plunge Protection Team's Historic "Tip-Off"

Introducing Harbor Energy Capital

A few months ago, I had dinner with John and Ted Venners of Harbor Energy Capital at Kali's Court in historic Fells Point, Baltimore.

Born and raised in the rough and tumble state of South Dakota, John and Ted have spent a combined nearly seven decades dealing with energy executives, negotiating energy deals, and successfully navigating the Department of Energy and the Washington, D.C. crowd.

In addition, they know how to strategically add to shareholder value, taking their own Wyoming clean coal company to a $1.5 billion market cap.

Now when I first sat down to dinner with them, I didn't know exactly how we could help each other. But I soon found out.

They have a simple, but brilliant idea: Help cash-strapped public alternative energy companies get funding from private investors... as well as help them get a piece of the federal government's multi-billion dollar stimulus package set aside for green companies.

(By the way, if you're ever in Fells Point, go to Kali's Court for dinner and get the crab cakes: giant lump crab held together with little more than a prayer. It's all crab, all the time. Delicious.)

Now, after the waitress cleared the table, John and Ted explained to me that they have assembled a team of investment bankers, Wall Street players (including Ayuda Funding, which has loaned over $500 million to various companies in the past 10 years), and federal government grant and loan experts and writers.

The entire goal of the team is to get public alternative energy companies the money they need to get their products developed and to the market. In fact, with Ayuda Funding part of the team, bridge financing is immediately available for alternative energy companies.

As I listened to them, I realized they were true D.C. "insiders" who know the inner workings and dynamics at the Department of Energy.

So needless to say, I knew I had to pass this along to you.

Bottom line: If you are a publicly traded company in the green energy sector seeking near term funding while pursuing other public/private financing, contact Harbor Energy Capital. Together with their partner, Ayuda Funding, they are in a position to fund you at reasonable, fixed rates — in a matter of days. They specialize in stock loans, including restricted and convertible notes. You can contact Harbor Energy Capital at 703-224-8108; email ccgrillo@harborenergycapital.com.

And can also check them out at www.harborenergycapital.com

We have the opportunity today to use capitalism as a catalyst for real change. We can make the world a cleaner, safer place for future generations. And we can also create a new generation of wealth in the process.

A new way of life, and a new generation of wealth...

It's not just some random catch phrase.

It's a reality.

Jeff Siegel
Publisher, Green Chip Stocks

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