Thursday, January 15, 2009

Obama Stimulus Package to Include $25 Billion for Renewable Energy

/PRNewswire/ -- Congressional leaders together with Barack Obama's new Cabinet are planning a $25 Billion stimulus package in order to meet the President-elect's goal of doubling renewable energy production in the next three years, according to a report in Sunday's Washington Post.

President-elect Obama's Cabinet favors an $8.6 billion extension of the Federal Production Tax Credit, a program that speeds-up the building of new wind power generation projects. In addition, a bi-partisan initiative first backed by Rep. Chris Van Hollen (D-MD) and Rep. Zach Wamp (R-TN) for a National Clean Energy Lending Authority, is likely to be approved by the Obama team. The new agency could receive as much as $10 billion to extend low-interest loans, grants or guarantees to wind, solar and other renewable energy projects.

In the wind sector, most turbine manufacturers are foreign owned and not likely to qualify for stimulus dollars. Analysts expect U.S. based wind power project builders, to be big winners. New Jersey's NRG Energy (NYSE:NRG) which just completed its second wind project in the Texas Panhandle, has received a buy recommendation from UBS. Another wind power company with two projects underway in the Texas Panhandle is Denver based Nacel Energy (OTC Bulletin Board: NCEN). CNBC guest analyst Francis Gaskins has a $4 price target on the company. Nacel Energy closed yesterday at $1.15.

There are even more U.S. companies to like in the solar sector. Analysts at Stanford Capital have issued a buy on Evergreen Solar (NASDAQ:ESLR) with a $3.70 target. Evergreen is based in Marlboro, MA, and is a leading manufacturer of integrated solar modules. Needham and Co. has a buy on New Mexico's Emcore (NASDAQ:EMKR) and a $2 price target. Both Emcore's semiconductors and Evergreen's solar modules expected to benefit from increasing demand as the Obama stimulus plan is implemented over the coming months.

A Before the Bell(TM) renewable energy update.

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