For those of you that remember me from my days as editor for Material Profits, the commodity-based newsletter that has since evolved into Christian DeHaemer's BreakAway Investor, you will also remember that I had quite the "green crush."
My first international trip for Taipan Publishing Group was to a tiny island off the coast of Denmark called Samso. It had won a contest to participate in a ten-year race to become 100% renewable energy-based.
This year is the tenth year, and the tiny island has been more than successful. It now sells electricity back to the mainland.
So you can say that I was duly enthralled, and my model portfolio was packed full of alternative energy companies... most of which performed extremely well. (To be fair, some did perform poorly.)
My recommendations didn't make me many friends...
I remember fondly the insults slung via email calling me a leftist treehugger that should just stick to investment picks instead of researching and recommending pie-in-the-sky renewable energy companies.
Well, as climate change and energy independence have headlined a number of events during the past two years of presidential campaigning, I'm happy to see alternative energy back in the investment ring.
Surprisingly, many top-notch European companies see the U.S. as a major growth region for the renewable energy business, and they are coming over in droves to set up shop.
Let's take a look at just one of the technologies that's already being employed around the world: wind power.
The U.S. is in bad shape compared to the rest of the world. Some of the world's leader in wind power, like Spain, Denmark and Germany, generate a significant percentage of electricity from wind. But even countries like Morocco and India generate a larger percentage of electricity from wind than the U.S.
Morroco gets 1.7% of its electricty from wind. India? 4.6%.
The U.S. gets 1.37% from wind, and that's after record growth last year that saw 3,100 new turbines built in 34 different states.
Now listen to this: The Department of Energy released a 248-page report that shows how the U.S. can generates as much as 20% of its electricity from wind power alone... by 2030. Do the math and you've got a 1,360% increase from currend wind generation.
That means an additional 7,000 turbines a year will need to be installed over the next nine years if we want to meet this goal.
Guess what? That type of demand won't be met by U.S. companies. General Electric (GE:NYSE) is already committed for the next few years with T. Boone Pickens' wind farm planned for Texas.
No, folks... This demand will have to be met by international companies... Companies that have climbed amazingly quickly over the past two and a half years. In fact, seven different international companies have more than doubled since 2005.
(Note: That doesn't include the global meltdown the world's experienced over the past couple months.)
And many of these companies already have operations here in the U.S. and are looking to expand, sometimes into old manufacturing plants.
Like Spanish company Acciona SA (ANA:Madrid) who plopped a wind turbine manufacturing plant in an old pump factory in West Branch, Iowa...
These investments have sparkes a wealth of more factories, like the small company that occupies an old Maytag factory making concrete towers to support wind turbines while TPI Composites built a brand new plant across the street and promised to hire 500 employees.
It's revitalizing old manufacturing towns in what's called "The Rust Belt." These are places who saw manufacturing plants uprooted and moved overseas, or just closed down completely.
It's a very interesting area for investors.
No matter what you think of either candidate for president, both have promised to curb our dependence on foreign oil and build jobs here at home. Both have promised more alternative energy investments.
Seems like a win-win for both investors and many of those European companies coming to the U.S. and building turbine plants.
