While I'm not going to sit here and defend or ridicule the stimulus, no one really should have expected the results of the stimulus to be apparent by now.

How can we possibly know if this thing's going to work until all the money has been distributed, and all those projects get underway? And even then, many of these projects won't be ready for years.

So is the stimulus going to work? Who the hell knows? Maybe it will, maybe it won't. But I believe it's a bit premature to start judging its effectiveness before it's even had an opportunity to kick in.

Of course, I won't lie. I'm pretty impatient myself when it comes to waiting for the government to get those energy grants out. After all, there's a lot of renewable energy projects being held back right now as we wait for guidance on this stuff

So needless to say, I was pleased to listen in on the conference call that the Treasury Department and the DOE hosted yesterday. While we already knew the initial $3 billion in grants would be coming out this year, we finally got word that the application portal will go live on August 1. Certainly we would've like to have seen that sooner. But at least now we have a definitive date in place.

The grants are not taxable, and are expected to be paid within 60 days after the applications are received - assuming all requirements are met. The projects must also be placed in service by the end of 2010.

Once these grants are distributed, we believe that financing will begin to flow again, and the momentum we saw in 2006 and 2007 will return.

But again, we won't know for sure until the money starts flowing and projects get underway.

Jeff

And those countries adopted Japan's feed-in tariff model for stimulating their own homegrown solar sectors!

Now, with silicon prices cratering and government support for the sector increasing, we're seeing Japan become a magnet for foreign solar power investment.

Taiwan's AUO Makes a Big Bet on Japanese Solar

The government's pumping $9 billion worth of stimulus into the market, pushing demand for solar panels in Japan up for the first time since 2006.

Prime Minister Taro Aso said on June 9 that solar power and electric cars will play a key role in lifting Japan out of the economic muck and into robust growth. The PM foresees a cleantech industry worth 50 trillion yen (about $510 billion) by 2020.

He wants solar power generators installed at roughly 37,000 public schools in the next three years, a move which would keep PV production lines humming along steadily through 2012 and beyond. The total increase would boost Japanese solar production twentyfold by 2020.

Yet, Aso knows that such a rich future for Japanese solar won't be fueled solely by domestic money. . .

Taiwanese technology company AU Optronics (NYSE:AUO), a maker of LCD flat-screen televisions, just announced it would take a 51% stake in M. Setek, a Japanese solar material supplier that's been around since 1978. That move is both opportunistic and optimistic, given today's silicon market conditions.

Raw material providers like M. Setek are hurting from silicon prices that have dropped sharply in the past year, from nearly $1.50 per pound to just above 50 cents today. Though current levels are closer to the 5-year baseline, the boom-bust cycle we've seen in the global economy and energy investment over the past two years has had a severely destabilizing effect on upstream firms.

In the current environment, other Asian solar material providers are issuing shares — China's ReneSola (NYSE:SOL) is selling $100 million of new stock — and tapping fresh lines of credit.

But M. Setek found a buyer in AU Optronics, and investors like it. AUO shares have gained since the $125 million private-placement deal was announced.

And AUO isn't alone — other internationally listed companies are also pouncing on Japan's stimulus-fed solar consumer surge and could expect a market premium for their efforts.

Canadian Solar to Sell Chinese-made Cells in Japan

Canadian Solar (NASDAQ:CSIQ) announced just this week that it will target 12,000 kilowatts of yearly solar cell sales in Japan from its Chinese production base.

With the government paying up to $785 per kilowatt for rooftop photovoltaic (PV) installations as part of its $9 billion rooftop solar stimulus package, CSIQ is smart to turn towards the Land of the Rising Sun.

As Nick Hodge has pointed out in recent reports from Wall Street's Renewable Energy Finance Forum, clean energy financing flows are shifting fast and furious these days.

Low silicon prices, though they hurt producers' balance sheets, are enabling governments to get more bang for their stimulus bucks (or yen), which in turn will boost sales at vertically-integrated solar power companies.

Regards,

Sam Hopkins

P.S. Nick and I work hard to keep Green Chip International readers ahead of the curve when it comes to how much money is going where, and when. As I've shown you today, many of the best plays on global green projects like Japan's massive solar stimulus are actually found on Wall Street. It couldn't be easier, or more necessary, to take advantage of a world's worth of opportunities in clean energy. GCI subscribers are sitting on current gains of 186% and 29%, with plenty of other winners already closed out for profits. Don't miss the next moneymaking opportunity. . . check out GCI today. 

But the United Kingdom—a world leader in offshore water-driven power—just signalled that the tide is back in for marine energy companies.

At the beginning of July the UK government authorized the issuance of the first Renewable Obligation Certificates (ROC) for marine energy to Marine Current Turbines, a British firm.

Marine Current Turbines focuses on harnessing the power of tides around the UK, and its SeaGen generation system was deemed worthy of ROCs after a 1.2 megawatt axial flow turbine system was successfully installed and operated in Northern Ireland.

That project at Strangford Lough has served around 1,000 nearby homes with power through grid connections, but the effectiveness of tidal energy does not necessarily lead to a bottom-up demand and supply cycle as we have seen with rooftop solar installations, for example.

"There is effectively no market to pull marine energy forward," MCT managing director Martin Wright said in a statement. "It will be vital that the government. . . takes urgent action."

Now reinforced by London support, MCT will transform into a larger company that can bring SeaGen to larger, commercial-scale applications.

I was pretty bummed out this morning after hearing that T. Boone Pickens would be cancelling his 4 GW wind farm project. Not so much because that beautiful 4 GW wind farm won't be built in Sweetwater, TX - but because this little piece of news is likely to serve as an excellent opportunity for renewable energy naysayers to leave a fresh trail of misinformation about the wind energy industry.

It's already plastered all over message boards and blogs.

Here are a few comments that I found on one particularly hostile message board. . .

"Why did anyone believe this wind farm would ever get built? Wind energy is a scam. It's just another reason for big government to make more money off the backs of taxpayers."

"T. Boone Pickens is only trying to make money. He realized that he couldn't make money from a stupid wind farm that nobody wants anyway, so he walked away. When are people in this country going to wake up and realize that coal is whats best for Americans. It's cheap and we have 500 years of it. Time to silence the crazy treehuggers that are bankrupting this country."

"LOL! What a joke. Drill Baby Drill!!!"

We know why these folks are spouting off. They simply have no problem furthering our reliance on fossil fuels (which in some respects, could be perceived as treasonous). Environmental concerns are laughable to them (because most have absolutely no idea that natural capital can no longer be liquidated without fiscal consequences) and quite a few still believe that they'll be labeled as liberals if they embrace renewable energy integration. I guess they didn't get the memo about how supporting the integration of renewable energy is probably one of the most patriotic things you can do.

Regardless, there seems to be a lot of speculation about why Pickens cancelled the 4 GW farm, and is now restructuring his wind energy plans. But it is likely that the main reason is transmission.

In 2011, 687 GE wind turbines are scheduled to be delivered. But the necessary transmission lines being built to move all that wind power won't be ready until 2013. Bottom line: He can't have $2 billion dollars worth of turbines sitting around for two years while transmission is still being built. Therefore, Pickens is looking to build three or four smaller wind farms elsewhere.

Truth is, this is not an issue with wind energy. It's an issue with infrastructure. And much of the necessary infrastructure upgrades are being planned and built right now.

You see, transmission doesn't go up like shopping malls. These are huge, capital-intensive projects. But don't let the fossil fools use this as an opportunity to further their campaigns of misinformation about renewable energy integration. These upgrades and new developments ARE happening, primarily because our current infrastructure is crumbling, and it's in desperate need of modernization. Of course, those billions (that's right, billions...with a "B") in stimulus funds are going to enable this massive undertaking too. These upgrades will not only help us move all that new renewable energy to the grid, but they'll also enable a more efficient utilization of all the power we generate - both renewable and non-renewable.

Of course, as a renewable energy advocate and investor, I'm primarily focused on renewables. And the fact is, across the nation, new transmission is being built in an effort to facilitate new wind energy projects. Sure, the recession has slowed development. But the recession has slowed development of coal, nuclear and oil projects too. Nothing has been spared. But when the smoke clears, it will primarily be renewable energy projects that get back on track the fastest.

Truth is, hardly anyone wants to touch a coal project these days, even if it is intended to be a mythical "clean coal" project. And while I believe it's possible that we will see some future nuclear development, issues with NIMBYism (Not In My Backyard), waste disposal and extremely high capital costs will make those projects a lot more difficult to get off the ground, compared to new wind farms, solar fields and geothermal power plants.

So yes, Mr. Pickens' announcement is a setback for the wind industry. But it won't stop the momentum that will continue to allow wind, as well as all other renewables to become a much larger part of our overall energy mix.

Jeff

Given the continued volatility surrounding the U.S. auto market, we were quite pleased to hear some positive news from GM Vice Chairman, Tom Stephens.

According to Stephens, GM is still on track to launch a plug-in SUV in 2011. Some were concerned this wouldn't' happen, as the electrified SUV was supposed to be a Saturn Vue. Saturn was scrapped by GM as a part of its reorganization. However, we're now hearing that the SUV will come from either Chevy, Cadillac, Buick or GMC.

Stephens also said that GM is considering the launch of an all-electric compact car for congested cities. If that happens, they'll be joining other automakers, like Mitsubishi, Nissan and Ford, which are developing and launching their own smaller all-electric vehicles now.

Either way, GM remains committed to getting its plug-in - the Volt - on the road ASAP. Stephens added in a recent interview...

" I can tell you that I won't lose one day in terms of customers being able to walk into dealerships and actually purchase a plug-in"

GM also has plans to have a total of 14 new hybrid models on the road by 2012.

Jeff

If you live in the U.S., you should love it even more.

Worldwide installed wind capacity is expected to grow 63% by 2012, from 144,486 MW to 235,120 MW. Here's the chart provided by GlobalData:

But in the U.S., it's expected to grow 124% — nearly double the expected global growth — from just under 32,000 MW to nearly 72,000 MW. . . in just three short years.

By 2020, wind capacity in the United States will have grown 360%, all the way up to 147,500 MW.

At that point, the U.S. will account for at least a quarter of global wind capacity.

It's a growth market if I've ever seen one. But trouble still remains in the credit and capital markets. In order to successfully invest in the wind sector, investors need to be familiar not only with the flow of capital to the cleantech markets, but also with national and state renewable energy laws, current and future transmission corridors, government funding, planned projects, and relevant companies.

Seems like a lot to stay on top of, I know. But I'm here to help you wade through it.

Doubling U.S. Wind Capacity

I was fortunate enough to be in the audience at the Renewable Energy Finance Forum-Wall Street a few weeks ago to catch a presentation from David Berry, Director of Finance for EDP Renewables North America.

Through EDP's acquisition of U.S.-based Horizon Wind Energy, the company has installed over 2,200 MW of wind capacity in the States. They've installed over 5 GW globally. Needless to say, I was interested in this man's perspective on investing in wind energy.

And he summed it up nicely with this graphic:

Basically, Mr. Berry is hinting at a perfect storm for investing in wind energy wherein the recession has driven down commodity prices and forced some players out of the game, resulting in declining construction costs and decreased competition.

Falling interest rates for project finance and government support via the stimulus and production tax credit make up the other two frames of this window for wind investment.

What's more, Berry (and his company) believe doubling U.S. wind capacity will require $50 billion of new capital. That won't all end up in the public market, but Green Chip will do its best to find out how much it does and when, then pass that info along to you.

But before the billions can flow and U.S. wind capacity can double, a few things need to be accomplished at the regulatory level.

Transmitting Wind Profits

At the top of Berry's list of what needs to be done to facilitate wind growth were the following two bullets:

• Create a federal siting authority for cross-state transmission projects

• Figure out a national transmission market structure

In addition to putting a price on carbon and adopting a national renewable energy standard, it's not hard to see that transmission is the main hurdle for wind expansion. (The other two aren't hurdles per se, but rather expediting factors.)

One look at this chart makes it crystal clear. The places with the most abundant wind resources use the least energy, so the key is being able to deliver rural wind power to urban areas.

Energy is only profitable if it has an end market. So, developers are looking for sites that already have access to transmission or have plans for its imminent arrival.

If you're looking to invest in wind development companies, access to transmission should be high on your list of diligence items. Of course, transmission isn't a necessary requirement for turbine producers.

My colleague, Jeff Siegel, will have a new report on a future stalwart wind developer as early as tomorrow. This one company already has transmission deals in place in one of the largest wind markets in the country, so keep an eye out for it.

When it comes to turbine producers, the dominant players so far have been foreign. Even though GE has significant turbine market share, it's not a big enough chunk of their overall revenue stream to consider it a pure wind play.

Other big players like Vestas (COP: VWS), Gamesa (MCE: GAM), and Suzlon (SUZLON.NS) can only be bought individually through a commission-based broker or via an often thinly-traded Pink Sheets version.

If you want to hold a group of wind companies at once, you may want to check out a wind ETF like the First Trust Global Wind (NYSE: FAN). It should prove to be a good buy-and-hold as global wind capacity surges forward.

Call it like you see it,

Nick

The Nikkei Business Daily reported on Saturday that Toyota will start mass producing plug-in hybrid electric vehicles (PHEV) in 2012.

The company's focusing on bringing the price of these PHEVs in at a comparable price to Mitsubishi's i-MiEV electric car - which hits the Japanese market this year with a $47,800 price tag (before subsidies). The i-MiEV has a top speed of 82 mph, with an all-electric range of 100 miles.

The Toyota PHEV is expected to deliver an all-electric range of between 12.4 and 18.6 miles, but since it's a PHEV, a gasoline engine can kick in if the vehicle goes beyond its all-electric range.

Toyota will be using lithium-ion batteries produced by its joint venture with Panasonic Corporation, and plans to pump out 20,000 to 30,000 PHEVs in its first year of output.

This news comes after data from the Japan Automobile Dealers Association showed sales of the Toyota Prius jumped 258 percent from last year. The Prius was also the best-selling car last month in Japan.

Jeff

Now, Norway's new power chief is joining with the country's parliament to make the non-EU country a key component in continental renewable energy goals.

"Offshore wind energy may become the next adventure for the Norwegian industry and energy sector," Terje Riis-Johansen observed. As the world's #6 oil exporter and a key source of western European natural gas, Norwegians could play possum when it comes to overhauling the Scandinavian country's energy infrastructure.

Instead, officials in Oslo are aiming to make the country a hub of northern European offshore wind power activity.

Between Denmark's Vestas Wind Systems to the south, Scotland's joint wind farm projects led by Talisman Energy (NYSE:TLM) and ScottishPower to the west, and shipbuilding companies like Finland's Rautarukki now coming from the east with the goal of shifting shipbuilding operations into wind turbine tower production, Norway is at the heart of a transformational cold-water economy.

And the clean energy initiatives are coming from all over...

Norwegian oil and gas champion StatoilHydro (NYSE:STO) has teamed up with German infrastructure giant Siemens (NYSE:SI) to build the first floating wind turbines for deepwater use.

With centers of gravity deep below the surface and moorings tied to the seabed, these rigs would go farther offshore than any pylon-based wind turbine could. The first application for such a far-flung power generation system would actually be to help power oil and gas rigs that sit atop the North Sea's dwindling petroleum reserves.

And with Norway straddling the line between old North Sea energy and the new wave, legislators want to codify goals for getting a new industry off the ground and into the water.

With about $45 billion dollars in investment, Norway could build enough 5000-8000 megawatt wind power arrays to equal the output of 8 nuclear power plants.

The European Union, of which Norway is not a member, has set the goal of achieving a 20% renewable energy contribution to the EU's electricity generation by 2020. If Norway can harness its significant wind energy resources to deliver up to 40 terrawatt hours per year, it will also generate significant revenue from European customers to offset declining fossil fuel revenue.

Companies like Siemens and ABB (NYSE:ABB) are already hard at work addressing questions of transmission from offshore wind farms to onshore utilities, which of course presents a challenge of both minimizing loss and providing storage systems for off-peak generation times.

But the political will—for decades the missing component in Norwegian wind power—is now prominent. 

Now let's see what the Norwegians do for themselves and the worldwide viability of offshore wind power when they put the money where their mouths are.

-Sam Hopkins

City officials announced today that they are kicking around the idea of building a wind farm off the Rockaway Peninsula. . .about 13 miles off the coast of New York City.

The offshore wind farm would be the largest in the United States, boasting 350 megawatts.

Here's what Kevin Burke, CEO of Con Edison had to say about it...

"If the technical, environmental, economic and social challenges can be met, and we have the support of government, energy and environmental leaders, I am confident this project will be built and produce enormous benefits for our region."

Of course, it's likely that the price tag will be the key.

Back in 2007, a proposal for a 140 megawatt wind farm off the shore of Jones Beach was canceled after project estimates came in at more than twice the initial estimate.

And this latest 350 megawatt project is estimated to run anywhere between $1.35 billion and $2.7 billion.

Still, a lot has changed in the past two years. Most importantly, a pro-renewables White House that is likely to get its national renewable porftolio standard approved this year.

I suppose we'll get a better handle on how this will work out later in the year. But I'm optimistic that at some point very soon, a big chunk of New York City's power is going to come from offshore wind.

Jeff

That means each wind power base will generate more than double the power that's expected to be generated at T. Boone Pickens' wind farm in Texas. That's huge!

Certainly for those who invest in turbine manufacturers, this kind of continued support for wind energy in China could prove to be quite lucrative. But this opportunity is not limited to only the Middle Kingdom.

As it stands, the U.S. surpassed Germany as the country with the largest amount of installed wind power capacity in 2008. This, after more than 8,500 megawatts of new wind power increased the nation's cumulative total to more than 25,300 megawatts - representing a growth of about 50 percent.

Based on this growth rate, and assuming long-term policy support (which is now in place), this puts the U.S. on a trajectory to generate 20 percent of our electricity from wind energy by 2030.

This is a massive jump, based on the 1.25 percent that was generated by installed wind projects at the end of 2008 - and a massive opportunity for investors.

Of course, the real catalyst here is Washington.

Secretary of Energy Steven Chu has been very vocal about his support for wind energy development, saying that he believes wind energy is one of our most promising renewable energy sources.

Not surprisingly, the wind energy industry picked up $93 million from the stimulus to further develop wind energy in the U.S.

We also believe that much of the new investment in transmission and infrastructure is being made to facilitate the continued growth of wind in the U.S. After all, the DOE didn't announce that wind energy could produce 20 percent of our electricity by 2030 without taking into account infrastructure development.

The writing is on the wall, my friend. And unless you hate money, there's absolutely no reason you shouldn't be properly positioned in the wind energy market.

Wind Energy Investing: What the Stimulus Holds

When we talk about investing in wind energy, most focus on turbine manufacturers. It's a common and logical connection.

Today, GE (NYSE:GE), Vestas (CPH:VWS), Siemens (NYSE:SI), Suzlon (NSE:SUZLON) and Gamesa (MCE:GAM) are the main suppliers of wind turbines in the U.S.

And they are likely to remain the major players too.

In fact, Vestas is now in the process of constructing two new manufacturing facilities in Colorado. Both are expected to be operational in 2010.

Gamesa has built four new wind turbine production facilities in the U.S. over the past two years, and Siemens is expected to begin construction on its newest turbine production facility next month in Hutchinson, Kansas. This comes just two years after the company built a rotor blade manufacturing facility in Fort Madison, IA.

Now a couple of years ago, turbine prices were exorbitant...and the down time between the initial order and receipt of the turbines was anywhere between two to four years.

Today, however, thanks to the recession - prices for wind turbines have fallen 18 percent globally. This is primarily because of declining demand and a decrease in the cost of raw materials.

Perhaps this hasn't made turbine manufacturers do cartwheels, but it has allowed some wind farm developers to get better pricing. At least the ones that have the financing to continue their expansion projects.

That being said, once a lot of that stimulus money finally gets funneled through the system later this year, we'll definitely see a lot of those wind farm developments that have been on hold for the past year or so, get back on track. As a result, turbine orders will pick up.

Now some have suggested that it's too risky to count on that stimulus money. But the fact is, that money's already been set aside and is currently being distributed. Granted, the distribution of that money may be too slow for some. But I'd prefer a slower distribution to a bunch of blank checks being thrown around wildly - something Washington is famous for.

In the meantime, we continue to believe the near-term opportunities here will be found primarily in the wind farm developers that are either currently developing new projects, or at least have the necessary financing to begin development in Q3 and Q4, 2009.

In 2010, we'll likely see turbine orders pick up enough to at least start to make a difference when earnings come out.

Of course, everyone has a different take on the timing. But the bottom line is that the world's largest wind turbine manufacturers have already begun building out their manufacturing right here in the U.S. They wouldn't be doing that if there wasn't real opportunity here.

Again...the writing is on the wall.

And whether you believe it's the right thing or not, the government is facilitating the wind energy industry's early growth, not only by offering direct support for research, testing and development. . .but also by building out our nation's electric infrastructure to enable the transmission of new wind power generation.

This is all going down right now.

Even as the climate change and energy debates continue on the Hill - the wind energy industry is continuing to grow and develop at a rapid pace. And in no time at all, wind will go from being considered an alternative form of power generation to simply another form of power generation.

Now as I already mentioned, we see wind developers representing the best near-term opportunities for investors. Particularly those with operations in California. And next week, I'll get into more detail on why that is. I'll also clue you in on a publicly-traded wind energy developer that could easily be one of our biggest winners for 2009.

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

Jeff

The talk was led by Don Paul, Executive Director of the University of Southern California Energy Institute.

In his former life, Mr. Paul was the Vice President and Chief Technology Officer at Chevron. He knows a thing or two about the oil business. And his presentation was right to the point.

The first bullet on his outline was: Why the global majors will be players in renewable energy. I'd like to share some of his insights here.

Why Big Oil Will Enter the Renewable Energy Market

Mr. Paul laid out five clear reasons why Big Oil will pursue clean energy opportunities.

1. They have global reach and scale

2. Strong balance sheets and cash flow

3. Technical, business, and market capabilities

4. Infrastructure, land, and supply chain management

5. Patience and longevity

In a sentence, Big Oil has enough cash, credit, know-how, and steel in place to pursue multiple clean technologies in numerous geographic markets—even if it takes years. And it probably will, because the majors need to walk a fine line between becoming cleantech companies and ensuring they exploit increasingly scarce oil for all it's worth.

That's why Big Oil's coming to cleantech.

How Big Oil Will Enter the Renewable Energy Market

This was another five bullet set.

First, of course, they're going to use renewable energy to produce oil, freeing up more natural gas to send to market. (Insight: this means Big Oil thinks nat gas will be more expensive than renewables.) The possibilities here have a broad range, from offshore solar powered platforms to wind turbines next to Texas oil rigs.

I guess there's no power like clean power to produce, well, oil.

Second is what Paul calls "adaptive re-use for production and manufacturing assets." In English that means putting wind turbines or utility scale solar on their dying, or soon to be dead, oil fields.

Third is by integrating power infrastructures. Read: We are salivating over the natural gas back-up opportunities (and that's why we're not going to burn it to produce oil).

Fourth should probably be number one. It's geothermal development, which is a natural fit for companies with decades of drilling experience and huge land holdings. In fact, oil companies are already involved in geothermal on a large scale.

Lastly is integrating infrastructures for biofuels, also a glove-fit for Big Oil. There are already increasing ethanol blend rates required by law. And though biofuels still make some people cringe, once we nail down successful enzymes for cellulosic and feedstocks for biodiesel (algae?), the market should blossom nicely once again.

Big Oil can leverage their infrastructure ownership and know-how to seamlessly enter this market. And they already are.

Real Life Examples

In the face of continued criticism of renewables by the uniformed, I find it reassuring to know that even the sworn enemy of cleantech is finally coming around. Big Oil's plan to enter these markets should be the final piece of tape on naysayer's mouths.

And it's not about carbon or altruism in any way, shape or form. It's about profits and a major energy transition—plain and simple.

It's why Valero is using clean energy to power a refinery. According to the Wall Street Journal, "Valero Energy Corp., which has the capacity to process more crude than any other U.S. refiner, recently installed 33 windmills to supply a refinery here with green electricity to produce gasoline and diesel."

The WSJ also pronounced, "The marriage is one of convenience."

It's also why Big Oil is scooping up biofuel assets that now have a recession discount.

Valero just bought seven Midwestern ethanol plants from now-bankrupt VeraSun. Marathon Oil has taken large stakes in two ethanol plants with a capacity of a million gallons each. Sunoco bought one, too. And just like that, Big Oil controls 7% of total U.S. ethanol capacity.

Yes, after a long abstention, Big Oil is finally coming to the cleantech party. It was only a matter of time, and it's a huge affirmation for those of us with skin in the game.

But be warned, they're going to do this Big Oil style, on their terms. That means employing patience, looking for high returns, and only pursuing projects with guaranteed payoffs—hence buying ethanol assets for pennies on the dollar.

So don't expect Big Oil to start producing thin film solar or trying to improve wind turbine design. But appreciate that they're finally coming to the table and the incredible validity it brings to clean energy.

—Nick

A new survey conducted by market research firm, Synovate has shown that about six in ten people would choose an environmentally-friendlier car over a gas-powered one.

The survey asked the 13,500 respondents to make their decision without thinking about cost. Here are some of the results...

• 40 percent of respondents said green would be their preferred purchase.

• 20 percent said green cars were their dream car.

• More than 70 percent of Chinese respondents said they would buy a green car, compared to 42 percent of Americans.

• At about 40 percent, it was the Chinese who were most likely to take public transportation more often in the next year. Americans were among the least, at 2 percent.

• Germans were most likely to choose green cars over conventional gas-powered cars.

• South Africans and Indians, who typically view cars as status symbols, were least likely to choose a green car.

The survey was conducted three months ago in Australia, Brazil, Canada, China, Egypt, France, Germany, Greece, India, Japan, Korea, Malaysia, South Africa, Thailand, Turkey, the United Arab Emirates, Britain, and the U.S.

It should be noted that the survey targeted city-dwellers - where public transportation tends to be more readily available, and traffic congestion tends to be significantly worse than in rural areas.

Jeff

MENA solar resources could, according to the European Commission, fulfill all of Europe's electricity needs with just 0.3% of the sunny region's annual solar radiation.

And by focusing on concentrating solar power (CSP), which is already in use in U.S. states like California and Nevada, Desertec would not be reinventing the wheel, or the panel.

The question of utmost importance, with the world of renewable energy finance still reeling from the credit crunch, is where the money will come from to finance such a massive project...

To that end, international commercial mammoths like Siemens (NYSE:SI) and E.ON (OTC:EONGY) are leading a German consortium that can make Desertec a reality.

For them it's a matter of business sense, getting the jump on other European and global power players while pleasing European governments and the European Commission, all of which are eager for an alternative to Russian natural gas. Not only solar but wind, biomass, and geothermal will all be part of Desertec's Trans-Mediterranean energy mix.

In July, we'll see the first concrete steps by 20 top German companies to get the 400 billion-euro ($561 billion) project up and running. A meeting is set for July 13 in Munich.

You can read more about Desertec's geographic and political basis here on our sister site, Energy and Capital.

Sam Hopkins

The Canadian province of Ontario announced yesterday that it has suspended a plan to build two new nuclear reactors.

The reason?

According to government officials, concerns about pricing and uncertainty regarding the future of Atomic Energy Corporation (the favored bidder for the nuclear projects), prevented Ontario from continuing with the procurement.

But the Globe and Mail newspaper reported the following...

"Canadian nuclear safety regulators say they have underestimated the seriousness of a design feature at the country's electricity-producing reactors that would cause them to experience dangerous power pulses during a major accident.

If reactors are not shut down quickly, their ability to keep radioactivity from escaping would be put to the test, according to an internal commission document.

The document says Canada's seven nuclear stations, which all use Candu technology, have a feature known as 'positive reactivity feedback,' in which their atomic chain reactions automatically speed up if the water pumped into the reactors to cool them leaks, one of the worst accidents possible at a nuclear station. If reactors aren't immediately shut down during this type of incident, positive reactivity leads to a quick snowballing in the pace of nuclear reactions, which in turn could cause potentially damaging overheating.

The fear is that with a large loss of coolant, such overheating could put the nuclear facilities' containment features - the concrete domes and other protective mechanisms around reactors that are the last-ditch defences to stop the spread of radioactivity into the environment - to a dangerous test.

The commission is monitoring the problem closely because positive reactivity could lead to 'severe core damage and early challenge of containment integrity if not arrested in time' during a severe loss of coolant accident, the document said."

Now I'm not a nuclear engineer, and I don't pretend to understand much about nuclear power generation. But I am your typical consumer. And no matter how many times I hear from pro-nuclear types that nuclear is safe, it's stuff like this that makes me realize we're probably a lot better off spending our time and money expanding our renewable energy and smart grid infrastructure.

Of course, I'll probably get quite a few hostile comments to that statement. But the fact is, if a bunch of solar panels or wind turbines overheat - I don't need to be worried about radioactivity issues. And that makes all the difference.

Jeff

"It's never been better and it's never been worse."

That was the line ACORE President Michael Eckhart used to open the sixth annual Renewable Energy Finance Forum Wall Street.

ACORE is the American Council on Renewable Energy, a well-respected member-based organization that has been pushing renewable energy in DC for nearly a decade.

It was the perfect line to convey the current market climate.

The REFF Wall Street

Whenever I return from a conference, I always like to pass on what I've learned.

This is my third year attending the REFF, and it's grown to be one of my favorite cleantech events. Not because I learn about public companies—there are only a few there, and the conference is about finance—but because I walk away with a clear picture of the internal state of the industry from top to bottom.

Ormat (NYSE: ORA) and SunPower (NASDAQ: SPWRA) were there, but only to talk about access to capital from the public perspective. It's really all about where we are now, where we need to be, and where the hell all the money is going to come from to get us there.

Here's what I learned.

The Best of Times

There's a new, clean energy focused administration. Finally.

Green sentiment is growing to a boil both at the consumer and corporate level, with even behemoths like Wal-Mart greening their supply chain and giants like GE, Google, and IBM leveraging their know-how to get in on the action. This thing is real. We knew that.

The American Recovery and Reinvestment Act (the stimulus) has dedicated $56 billion to clean energy and efficiency via grants and tax benefits, and offered clear tax policy guidance for the industry.

There is meaningful and significant energy and climate legislation in front of Congress (passed the House since writing). For possibly the first time ever, the energy bill at hand seriously considers its environmental implications.

Indeed, for those of us with skin in this game, much ground has been covered in just a short time. It wasn't long ago when we were distraught over whether or not the investment tax credit (ITC) and production tax credit (PTC) would be extended.

Now, as was noted at the forum, that seems like ancient history. And we have much bigger issues than whether or not we're going to get tax break extensions.

Yes, the congressional majority and president are on our side. Yes, the stimulus money is going to help out in a big way. Yes, it looks as though the social sentiment is finally starting to shift.

But more importantly, with banks still unwilling to lend, where, exactly, is the money coming from to build the next solar plant? To get the financing for the next wind farm?

And for Green Chip investors, how is that going to affect the valuations of stocks?

The Worst of Times

Financial crisis. Recession. Withdrawal of lending. Loss of tax equity. Slow closing of deals. Stimulus money not being spent yet.

For all the things going for us, there are an equal amount going against.

For starters, banks are unwilling to lend until the government releases detailed guidelines about how the stimulus money is to be spent, because included in that money are loan guarantees.

The rules for those loans are still being written, and the financing structures and mechanisms still being devised. And the banks aren't willing to lend until all that's figured out.

So you can see the stalemate emerging. The banking industry is counting on government guidance before it lends to clean energy energy projects. This is because the government has thrown so much money out there that it's now a de facto lender, and its actions must be taken into account by banks when financing projects.

Neil Auerbach of Hudson Clean Energy Partners had the following questions, just to name a few:

• Do grant proceeds count as equity?

• Will grant proceeds serve as security?

• Can project developers use both grants and loan guarantees for construction financing?

• Can one JV partner in a clean energy project apply for a loan guarantee and not the other?

And his sentiment was echoed by top brass from numerous other global banks. They had many other questions like these revolving around senior debt, subordinated debt, tax equity and how the government's stimulus spending rules will affect lending practices.

So here's the concern. The procurement and construction timeline for cleantech projects can be long: 4-6 months for rooftop solar, 6-10 months for utility scale solar, and 9-15 months for wind.

The rate of new projects has already slowed dramatically because of current capital restrictions. Is the industry going to be able to survive the wait while the government hashes out lending details? How long can the industry tread water while capital continues to be choked off?

With several government officials in attendance, there were more than a few calls to speed the process or risk dying on the vine.

Cautious Optimism

From Under Secretary of Energy Kristina Johnson to Senior Advisor to the Secretary for the Recovery Act Matt Rogers (the man in charge of spending energy stimulus dollars), bureaucrats in attendance recognized the need for urgency and assured they are doing their best to speed the spending of stimulus funds.

By all accounts, Q4 2009 is looking like the release of government rules for treasury regulations and DoE loan guarantees from the stimulus. Financing and procurement for clean energy projects can resume in a big way at that time, provided the rules meet the needs of all parties. Q1 2010 to Q3 2010 is looking like the construction period for the resultant projects with operation seen in Q4 2010.

It's fair to say that a significant clean energy stock recovery will not happen until the capital begins flowing and investors see increasing revenue on the horizon.

For starters, we're locking in easy gains. This helps keep our total portfolio buoyant while freeing up cash for the next play. We've closed 27 winning positions so far this year by using broad market volatility to pick-off familiar stocks.

We're also building positions in less capital intensive industries that can expand without access to large amounts of capital.

And the smart grid fits right in this sweet spot because most of the solutions are software driven. Companies that pursue demand response, like Comverge (NASDAQ: COMV) and EnerNOC (NASDAQ: ENOC) can make innovations with the click of a mouse, not with construction of a new turbine or panel production facility.

Perhaps that's why smart grid stocks have been on such an aggressive path recently:

It's certainly why I've been intensively covering them for the past month or so.

If you haven't taken a position in the smart grid yet, this report will show you how to get started. Not only will these stocks prosper while capital remains tight, but the sector is also slated to receive a good chunk of stimulus dollars when they start flowing.

It's a win-win.

Call it like you see it,

Nick

It may not have made as many waves as the Michael Jackson story, but last week, after the House passed the cap-and-trade bill, the media response was overwhelming. Not that anyone should be surprised. This is a huge issue.

However, it seemed that much of the earliest coverage stirred up an awful lot of hostility and opposition. And it was everywhere. From the most conservative blogs to the most liberal social media sites - those who oppose any kind of effective climate change legislation were not pacing back and forth in the waiting room. They were hitting up every possible media outlet to express their opinions and outrage.

Now I have no intention of opening up the global warming debate here. Those who believe global warming is some kind of scam are not going to change the minds of those who believe there's something to it. And vice-versa.

However, one thing that I'm finding increasingly frustrating is the amount of manipulated data that's being disseminated all over the internet...and mainstream media.

Let's first take a look at the data that was debunked earlier in the year - but was used as a rallying cry on Fox & Friends last Friday.

You've likely heard it before — that cap-and-trade will cost consumers an extra $3,100 a year. This is the figure that a handful of bureaucrats in D.C. came up with after massaging some data found in an MIT study.

John Reilly, one of the study's authors told House Minority Leader, John Boehner that the MIT study had been misrepresented in press releases distributed by the National Republican Congressional Committee. Reilly stated that it was misleading and simplistic to only look at the impact on energy prices, as it didn't account for the proposals that have been designed to offset the energy cost impacts on middle and lower income households.

Of course, it wasn't just Boehner's office that pumped out the press releases about the supposed high costs associated with cap-and-trade.

The Heritage Foundation chimed in with their analysis of the bill which they claim adds little more than a massive energy tax in disguise that promises job losses, income cuts and a sharp left turn toward big government.

Their cost estimate is $1,500 a year.

On the other side of the coin, we have John Reilly's estimate of about $800 a year. . .an EPA analysis which estimates a cost of between $98 and $140 a year. . .and a Congressional Budget Office estimate that puts the total at $175 a year.

I suspect all of these numbers have already been run through the opposition's spin mill, rejected thoroughly, and blasted back out on the internet.

Either way, no matter how accurate or manipulated the data - the truth will only be realized in practice.

Listen: Certainly no one wants to spend more money for electricity. Especially during these rough economic times. And this is what opponents of climate change legislation are banking on - telling us that energy will cost more because it will cost more to produce. But isn't this really just an illusion - like the "cheap" energy we consume today?

I would argue that energy production would not cost more. The price we pay to the utilities for that energy, however, would. And there's a very important difference between the two.  

What we're really talking about here is attaching an environmental cost to the production of electricity. But that cost has always been there. It's just that you and I never see that cost on our bill.

Bottom line: There is a definite environmental cost associated with the production and combustion of fossil fuels. And that cost is the deterioration of natural capital (water, minerals, fish, trees, oil, soil, air, and living systems, including wetlands, estuaries, coral reefs and rainforests)

Now before you write this off as some kind of random environmental agenda, hear me out...

As explained in the book Natural Capitalism (which is an absolute must-read for environmentalists, economists and business leaders), natural capital has never really been valued appropriately. Rather, it has constantly been liquidated, thereby further enabling the deterioration of ecosystem services that really represent the most important type of capital - things like the regulation of atmosphere and climate, the cycling of nutrients and water, pollination, control of pests and diseases, and the maintenance of biodiversity. While the value of these free, natural, and self-regulating services are worth trillions annually, this value has never really been reflected on balance sheets.

Instead, the costs associated with the loss of natural capital have long been externalized onto the environment. i.e.) you, me and every single thing that lives around us.

And the truth is, we're only talking about CO2 with this cap-and-trade bill. As far as I'm concerned, there's still the mercury issues associated with coal, the waste issues associated with nuclear, and the security issues associated with our reliance on oil. These aren't included in the bill. But throw those on your tab, and you'll see an even higher cost per kWh (or higher cost per gallon of gas when referring to oil being used primarily as a transportation fuel)

The price we pay for energy today does not reflect the true cost of producing that energy. An effective climate change bill could at least begin to enable a more accurate cost structure.

I know, I know. No one wants to shell out a penny more for anything. And I'm no different. But if we truly believe in a free market system, than we should not resist a fair and accurate cost analysis of energy. Because the truth is, it's never really existed.

Now understand, I'm not saying cap-and-trade is the answer. To be honest, this thing is so politically-motivated, it's hard to figure out the most effective, and honest solution. Seems to me, the best way to do this is simply to charge consumers the REAL price. I'm confident that if no subsidies existed (direct or indirect) for any kind of power generation (fossil fuel or renewable), and ALL natural capital costs were figured into the equation - the market would dictate the rapid expansion of renewable energy and smart grid development, which would thereby enable a decrease in fossil fuel consumption, and ultimately a decrease in CO2 emissions.

Jeff

The goal is to help keep cars cooler so less air conditioning will be needed. This will increase fuel efficiency and prevent about 700,000 metric tons of CO2 from entering the atmosphere. That's the equivalent of taking 140,000 cars off the road for an entire year.

There are two types of glass technology that are likely to be used...

• Infrared Reflective Glass - which uses a coated film placed between two pieces of glass.

• Solar Absorbing Glass - which is laminated using a solar absorbing material that limits solar energy going into the vehicle.

Compared to the cars available today, these new windows will block 33% more heat-producing rays from the sun, thereby cooling the vehicle's cabin by about 14 degrees Fahrenheit.

As side benefits, these windows will also reduce upholstery fading and dashboard cracking.

The new regulation goes into effect in 2012.

CARB also announced another new regulation yesterday that requires more than a dozen landfills in the state to install equipment that captures methane gas.

I don't have the details, but I'm assuming that much of this methane will be used by waste management companies to generate electricity. This is actually becoming more and more of a common practice. In fact, according to the DOE, in 2005, there were roughly 400 operational landfill gas projects in the United States delivering 9 billion kilowatt hours of electricity - or enough to power more than 725,000 homes, and heat close to 1.2 million homes.

In 2007, Waste Management, Inc. reported that there were 427 operational projects in the U.S. delivering 1,275 megawatts, as well as 550 candidate landfills identified by the EPA. Combined, these projects would amount to 2,595 megawatts, or enough to power more than 2.3 million homes.

To put that in perspective, based on the 2006 U.S. Census, which estimated housing units data, this is enough juice to power every housing unit in the states of Delaware, Wyoming, Vermont, South Dakota, North Dakota, and the District of Columbia, combined.

Methane (which is about 50 percent of landfill gas), is 23 times as potent as CO2, and has more than doubled its atmospheric concentrations over the last two centuries.

Jeff

"Thank God the accident involved two trains heading into town that were sparsely populated. If it had been two rush hour direction trains, fatalities would have easily exceeded 100."

While investigations into the incident itself are continuing, Maryland Congressman and House Majority Leader Steny Hoyer knows that moving millions of people a day on outdated infrastructure is an ongoing gamble with stakes far too high to fudge.

So Hoyer has just proposed an additional $3 billion in Metro transit improvements.

That's a positive move, but it's too much of a response to problems that have been allowed to develop. Forward-thinking investment is what systems like DC's need, before disaster strikes.

$13 billion are set to pour into America's high-speed and commuter rail systems before 2014, including $8 billion in 2009 alone.

That money will be put to best use by investing in companies that make efficiency and safety their top priority. And since the U.S. is playing catch-up to countries like France and Japan that already have high-speed rail, there's a world's worth of examples and listed firms to choose from.

In our new report, High-Speed Rail: Getting Back on Track, we detail the potential economic benefits of advanced nationwide rail infrastructure as well as highlighting the very real costs of underinvestment and inaction.

The only international companies that deserve our public dollars are ones who will get the job done right.

And when it comes to where you should invest, the same tough standards apply.

You can check out the report here.

Until next time,

Sam

According to a new University of Michigan report, a successful turnaround for Detroit automakers could hinge on a rapid cultural transformation. What's that mean, exactly?

Well, the report, "Fixing Detroit: How Far, How Fast, How Fuel Efficient," noted that the existing culture within the domestic auto companies systematically underestimates the value of fuel economy - which has crippled profitability.

Here's what Rob Leinbaum, former GM employee and report co-author had to say...

"For years it has discounted consumer research results when calculating the benefits of improving fuel economy, often by as much as two thirds. If GM had followed its own market research results over the last three decades, they would not be in Chapter 11 today."

And here's an excerpt from the report that discusses fuel economy standards...

"To address the questions of speed and scope of change, we looked at the actions of other large corporations that have managed successful turnarounds. There is extensive literature on this subject, both academic studies and interviews with corporate leaders. In order to address the question of fuel economy standards, we model the impacts of different fuel economy standard increases (30%-35 miles per gallon (MPG), 40%-37.7 MPG, 50%-40.4 MPG) on the profitability and sales of the industry and separately for the Detroit 3, the Japan 3, and all others. The model captures the cost of fuel economy improvement on suppliers, its impact on pricing, and the resulting changes in demand. The inputs to the model are the most recent and accepted estimates of all the key parameters, but since there is debate on many of these values, we conduct an extensive sensitivity analysis on the results.

Findings

The lessons from successful turnarounds are very clear:

• Implement Broad, Deep, Fast Change: All successful efforts addressed the fundamental issues that drove them into crisis and they did it as quickly as possible.
• Replace Management Team: In addition to changes in strategy and structure, in all cases there were widespread changes in management.
• Transform Culture: All of the successful companies considered changing culture a critical requirement and made it a top priority for success.
• Build a portfolio of excellent products: The path to long-term financial health for any company rests on having a great product portfolio. Our domestic auto industry, in its modern incarnation, has never been able to execute an excellent portfolio, only isolated successes.

The impact of higher fuel economy standards on industry profits is also very clear:

• An industry-wide mandated increase in fuel economy of 30% to 50% (35 MPG to 40.5 MPG) would increase the Detroit 3's gross profits by roughly $3 billion per year, and increase sales by the equivalent of two large assembly plants
• The Detroit 3 gain profits over base in all scenarios, with the largest profits gained from pursuing more aggressive fuel economy.
• Japanese automakers profit gains are smaller than the Detroit 3, with the smallest profits gained from pursuing 50% increase (40.4 MPG) in fuel economy.
• At 50% increase, the Japanese industry loses sales while the domestics continue to gain in sales and profitability, a result driven by the different starting points.

The value given to fuel economy by automakers has critical impact moving forward:

• There is compelling evidence that the Detroit 3 have systematically underestimated the value of fuel economy to customers.
• Because Detroit 3 automakers have long underestimated the consumer value of fuel economy, raising fuel economy standards will not cost more than consumers would be willing to pay.
• In every scenario, the average cost-per-vehicle (direct plus indirect) is less than what consumers would be willing to pay."

This particular report built on an earlier University of Michigan Transportation Research Institute study that predicted the Detroit automakers could lose billions in profits and thousands of jobs in the event of an oil spike. The study predicted that when gas crossed the $3 a gallon market, losses could reach $11 billion.

Ford and GM had combined losses of more than $57.2 billion by the time gas hit $4 a gallon last year.

Once on the sidelines, cleantech is now a marketing and social magnet. Companies and factories are going green. So are homes and individuals. Cars are now eco-friendly.

The use of renewable energy is not only doubling and tripling, it's being forced to grow by the government. Well over half the states have laws that mandate the use of renewable energy must expand several times over. A bill currently circling Congress would do the same for the entire country, as well as put a cap on carbon emissions.

Of course, the adoption of the smart grid and energy efficiency is marching right in step.

And I'm not just talking about the U.S. I'm talking about the entire world. Even countries you've never heard of have renewable energy targets.

With so much happening so quickly, I figured it was time to offer a green report card of sorts.  And as a Green Chip Review member, you can access this report - absolutely free - right here: http://www.greenchipstocks.com/report/alternative-energy-a-2009-report-card/449.

Nick