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Clean energy investment is setting new highs

April 19, 2016


Alternative power continues to ratchet its way into global energy production: higher oil prices make solar, wind, and other forms of alternative energy much more appealing, a luster that gets diminished when oil prices go back down as they have in the recent past. Through these cycles, however, the trend continues to be for a greater role in power generation, particularly from solar and wind.

As today's Daily Intelligence Briefing shows, solar and wind have approached cost parity with fossil fuels in some parts of the world and are rapidly approaching that tipping point inside the US. In Ohio, for instance, nearly a third of all power now comes from wind, with more installations on the way. While some states are cutting subsidies for homeowners to install solar panels, a significant offset is provided by the extension of federal subsidies for another five years. And the US government is acting to remove one of the major obstacles by streamlining the approval process to build new high-voltage lines to connect wind and solar to the national grid. 

Now that the oil cycle is turning up again –  with MRP calling for a substantial rise in oil prices and a rally in Energy stocks in the months ahead, the current environment presents an attractive entry point into the solar and wind stocks and an opportunity for MRP to affirm recommendations for a long position in Solar and  Wind. Guggenheim's TAN Solar Energy Index ETF provides a ready way to gain broad exposure to a global basket of stocks. First Trust's FAN Global Wind ETF offers a similar vehicle for global wind stocks.
 
  
 Source: Bloomberg, McAlinden Research

 
Last updated Arpil 19, 2016
 
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Warren Hatch, PhD, CFA
Portfolio Management and Global Investment Strategy
McAlinden Research Partners

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