This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Obama's Clean Energy Bet: Innovation or Just More Spending?

Stocks in this article: HUB.A CBE AYI FSLR SPWRA WFR WPRT CLNE HEV AONE

NEW YORK ( TheStreet) -- When it comes to clean energy funding, President Obama and the Republican deficit hawks in Congress can't seem to agree on much. There is a clear divide between the deficit hawks saying "spending is spending is spending" and the Obama administration, on the other hand, saying "spending is, in fact, innovation."

For investors, the political rhetoric is as influential as the clean energy logic, and it all can influence trading in clean energy stocks. Investors can't go straight from point A (a push from the Obama administration in favor of clean energy) to point B (guaranteed growth in a clean energy niche) and head to the bank with future profits. By all accounts, it's going to be a battle between the Obama administration and Congress over the budget request. On the other hand, for the deficit hawks to relegate the Obama administration's clean energy ambitions to a planned scrap heap of "wasteful" government spending can miss the forest for the carbon-sequestering trees.

There has been much action in relation to U.S. clean energy policy and the market implications in the past few weeks. The clean energy news flow reached its crescendo on Monday when President Obama introduced his new 2012 fiscal budget and requested $8 billion in clean energy spending. Solar, wind, electric car and lithium-ion battery makers, and industrial companies that focus on increasing the building efficiency in the commercial sector, would all be beneficiaries of President Obama's clean energy plan, partially to be funded by an elimination of tax breaks for oil and gas companies.

Lithium ion battery makers like A123 Systems (AONE) and Ener1 (HEV) would stand to benefit, in the long run, with the government encouraging an electric car hub and Obama's plan for one million electric cars on the road by 2015, even if they lack significant access to the passenger vehicle market today.

President Obama's budget calls for 9 gigawatts of clean energy projects on federal lands to be permitted by year-end 2011, a drive that would be in line with the efforts of U.S. solar project developers, like First Solar (FSLR), MEMC Electronic Materials (WFR) and SunPower (SPWRA), though by no means an opportunity limited to them, any by no means a reason alone to invest in these stocks, given their volatile profile and historical reliance on a European market that remains in flux.

Companies that have seen been building efficiency business grow as commercial properties become more energy conscious, such as Hubbell (HUB.A), Acuity Brands (AYI), and Cooper Industries (CBE), would benefit from President Obama's building efficiency budget request.

There's also an argument being made that if electric cars are going to find legislative support, it might require a concession to the traditional energy lobby in the form of support for natural gas engine-powered vehicles. The Natural Gas Act, which failed to find a legislative platform last year, is the ultimate prize for natural gas transportation stocks like Westport Innovations (WPRT), Clean Energy Fuels (CLNE) and Fuel Systems Solutions (CLNE). It would double the subsidy that expired at the end of 2010 for the purchase of natural gas vehicles, making the vehicles competitive with traditional diesel-powered fleet vehicle prices.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs