In a time where green startups are having difficulty raising money, utilities companies are turning to solar-powered alternatives and may bail out the sector and its exchange traded funds (ETFs).
On Tuesday, Pacific Gas & Electric recently announced that it will spend $1.5 billion to add 500 megawatts of photovoltaic power in California over the next few years. This will enable the utility giant to meet the stringent California energy mandates, but it will come with a hefty price. This clean energy will cost 24.6 cents a kilowatt hour, increasing the average electricity bill by 32 cents a month, states Marla Dickerson of The Los Angeles Times.
In addition to this, on March 3, the residents of Los Angeles will vote on a measure that will enable the Los Angeles Department of Power and Water to ramp up solar production by installing 400 megawatts of solar panels over the next five years. Although many are in favor of this measure, opponents are worried that the DWP will be inept in installing these large solar panels because of the lack of expertise, states Kate Galbrath of the New York Times. If passed, this will have a tremendous impact on the City of Angels.
This will be a much-needed boost for the green energy sector which was the golden child of investment by venture capitalists in 2008. Unfortunately, the sector was plagued by the credit crisis resulting in a drop in investment of 14% over the last three months of 2008, states Josef Hebert for the Associated Press.
With a passing vote of the measure and the $83 billion worth of incentives that President Obama has allocated for clean technology spending, tax relief and loan guarantees, the industry may shine.
Some ETFs to take a look at are:
- Claymore/MAC Global Solar Energy Index ETF (TAN): down 36.7% year-to-date
- Market Vectors Solar Energy ETF (KWT): down 32.6% year-to-date
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.