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Cleantech Investments

Profiting from the Transformation of Beantown to Greentown

Written by Nick Hodge
Posted April 9, 2008

Boston isn't usually the city that comes to mind when you think about cleantech investments and initiatives.

Austin, maybe. Portland, definitely. But not Boston. Until now.

And while ‘going green' may not currently conjure up the same financial giddiness as the discovery of a giant new oil field, it should.

You see, cleantech profits aren't contingent upon new oil field discoveries. They are being made every single day in cities across the globe.

The sporadic discovery of new fossil fuel sources is great, don't get me wrong. And there is a boatload of money to be made there. But it won't last forever. Oil fields dry up.

The sun shines everyday. The wind blows everyday. We pile unnecessary waste in landfills everyday.

They are essentially free for the taking. And you can profit from the companies doing so right now.

Let's take a look at just one city serving as a microcosm of the current cleantech industry.

Beantown to Greentown

The city of Boston has many green initiatives under way. And each one offers a different opportunity for profit on a much bigger scale. We'll take ‘em one at a time.

Action: Right now, Boston is planning an indoor composting center that would help meet the city's growing demand for energy. The multimillion-dollar facility would capture methane gas from rotting leaves, yard trimmings and food scraps, and burn it to produce electricity.

Opportunity: Waste to energy companies are quickly becoming the dark horse in the renewable energy battle. Mostly overlooked, these companies make the bulk of their revenue from waste removal and waste management activities.

But more and more, these companies are being tapped to provide energy services as well. The gas emitted from rotting waste in landfills has proven to be purer and cleaner than most of the natural gas found in the country's pipelines.

So these companies are now harvesting a product that they once wasted, and are realizing an added revenue stream in the process. Plus, operations like this are some of the best ways to generate carbon credits and profit from their sale.

Companies in this space include Waste Management, Inc. (NYSE: WMI), Covanta Holding Corporation (NYSE: CVA) and my favorite, Environmental Power Corporation (NASDAQ: EPG).

An even more obscure way to play waste to energy is Caterpillar Inc. (NYSE: CAT), which makes many of the reactors and generators used to transform trash into electricity all over the world.

Action: The governor of Massachusetts, Deval Patrick, recently held a ceremony to congratulate the Massachusetts Water Resource Authority on their just-completed installation of a 100-kW array of solar panels.

Opportunity: The solar panels were supplied by Evergreen Solar (NASDAQ: ESLR), a Marlboro, MA-based manufacturer of solar panels. A great play in the solar space, Evergreen is dramatically reducing their silicon usage per watt, which is helping to improve margins.

They also have a new production technique that allows them to make more cells at the same time. The technology will be used at all new Evergreen facilities going forward, including their expansion facility in Marlboro. Plus, the company has enough silicon supply under contract to sustain rapid growth through 2012. And they'll soon be among the largest producers of solar panels in the world.

Of course, this is just one of many good plays in a solar space that surpassed $20 billion in revenue last year and will be at $74 billion by 2017. In fact, the Alternative Energy Speculator's latest recommendation of a Chinese solar play is up 65% in three short weeks.

Action: At the ceremony for the Massachusetts Water Resources Authority, Gov. Patrick announced they will be erecting two 190-foot wind turbines as well. Permitting is under way for three more and other wind parks are in the works at four other state angencies.

Opportunity: Wind energy is currently the largest renewables market with $30.1 billion in revenues last year, growing to $83.4 billion in 2017.

As it stands, General Electric Company (NYSE: GE), Vestas Wind Systems (CPH: VWS), Gamesa Corporacion Technologica (MCE: GAM) and Mitsubishi Corporation (TYO: 8058) pretty much run the show when it comes to turbines. But combined, these four behemoths still cannot produce fast enough to meet demand.

Some smaller players are coming online, and the Alternative Energy Speculator already has a position in one of them.

The Bottom Line

These are just three cleantech actions in Boston announced in the past week or so.

But just look at the news on any given day and you'll see hundreds of such projects debuting daily.

Costs are coming down and the opportunity for profit has never been greater. From legislative help to capital investment to global initiatives, the green space is going to reap profits for years to come.

We're already seeing legendary gains in every niche cleantech market there is. From wind to wave to waste, you don't want to miss the next double or triple digit gain in this industry. And they happen everyday.

The Alternative Energy Speculator will bring them to you.

Until next time,

nick hodge

Nick

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