In anticipation of an Obama victory, investors scooped up insanely cheap renewable energy stocks on the day before and the day of the election. The solar sector saw some of the most impressive gains, with stocks like Evergreen Solar (NASDAQ:ESLR) climbing 44 percent, and Solarfun Power Holdings (NASDAQ:SOLF) picking up 49 percent. In wind, California wind farm developer Western Wind Energy Corporation (TSX-V:WND) tacked on 53 percent, and many are now expecting Vestas Wind Systems (CPH:VWS) – the world’s largest turbine manufacturer – to gain added momentum if the President-elect follows through with campaign promises of long-term support for wind.
Of course, it will be interesting to see how the rest of the year unfolds, as those that were on the fence with renewables may rush to get a piece of this action now, and those that had been loading up on cheap shares may be willing to cash out in the short-term for quick gains. Regardless, it should be understood that the potential of the renewable energy market does not rely upon an Obama administration alone. Certainly our next President’s energy agenda will support the renewable energy industry a lot more than the Bush administration did over the past eight years. But the reality is, without the continued threat of fossil fuel depletion and global warming, renewables could not take center stage the way they will over the next four years.
Now in an effort to stabilize and rebuild our energy infrastructure, as well as revitalize the economy, many expect to see Barack Obama prioritize a new energy policy which will likely include a goal of generating 25 percent of our total power from renewables by 2025. Certainly this is a lofty goal, as less than 10 percent of our power generation today comes from renewables (including hydro). However, pulling off such an accomplishment is not out of the question. It will really all boil down to leadership and an unwavering commitment on both sides of the aisle to make this happen.
If the Obama administration can pull this off, renewable energy investors could be in for a long and profitable ride. Solar manufacturers, wind developers, and geothermal companies especially will benefit on the utility-scale generation side.
On the transportation side, we expect to see the high-performance battery manufacturers that provide the batteries for hybrids and plug-in hybrid electric vehicles really gain momentum, as well as next-generation biofuel companies that utilize non-food crops as feed stocks. Enzyme manufacturers that work with cellulosic ethanol production companies will do quite well, and algal biodiesel companies could really pick some major development funding as this feedstock (algae), boasts better yields than today’s conventional biodiesel feedstocks, like soybeans and palm. While soybeans can deliver 49 gallons of oil per acre, and palm can deliver between 600 and 700 gallons of oil per acre, algae can deliver anywhere between 1,200 to 10,000 gallons of oil per acre.
Still, even with a new President and a new energy policy weighted heavily in renewables, our optimism must not get the best of us, as we doubt any support for the integration of renewable energy will be met without resistance. Whether based on political and social philosophy or simple lack of objective, peer-reviewed data, the old guard of coal and oil will not go gentle into that good night. So be cautiously optimistic, my friends. This is going to happen. But this transition will not be an easy one.
JEFF SIEGEL is the co-founder and managing editor of Green Chip Stocks, an independent investment research service that focuses exclusively on renewable energy and organic and natural food markets. He is often cited in the media, and has been a featured guest on Fox, CNBC and Bloomberg Asia. Siegel also works as a consultant, and is a frequent speaker at investment and renewable energy conferences and seminars.