The Obama Effect on Alternative Energy ETFs
January 15th 2009 at 2:00pm by Tom Lydon
Most industries have continued to struggle with the economic downturn, tight credit markets and declining sales numbers, but the alternative energy industry and its exchange traded funds (ETFs) have actually seen a boom in investment and sales numbers.
The Obama Effect. One reason for this influx of investors into the industry is President-elect Barack Obama’s paramount emphasis on alternative energy and energy efficiency. This is attracting many venture capitalist firms, angel investors and lenders to areas such as solar power, biofuels and energy conservation.
The Next Boom? Some even believe that clean energy will be the next Internet boom. Additionally, it is forcing many business owners to convert to more energy-efficient methods now in anticipation of strict future federal clean energy regulations, states Simona Covel of The Wall Street Journal.
What the Economy Needs? This could be great for our downward spiraling economy and give it a much-needed boost. One solar technology and installation company, Green Panel Inc., is planning to add to its small staff of employees and is eagerly awaiting Obama’s inauguration in hopes of accepting orders from clients.
Big Plans. Additionally, Greenline Industries, a biodiesel firm, is planning to triple its sales staff in the upcoming weeks and recently signed a deal with Valley Transportation to construct a 10-million gallon processing plant. To add a little frosting to the cake, the federal government is expected to improve its own energy efficiency which will generate jobs and revenue for the industry.
All we can hope for is that Obama practices what he preaches, makes tax credits and incentives for the use of alternative energy attractive enough to offset any jumps in cost.
Some ETFs that may be influenced by this anticipated emphasis on clean energy are:
PowerShares WilderHill Clean Energy (PBW): down 7% over the last month
PowerShares Cleantech Portfolio (PZD): down 1.5% over the last month
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.