Alternative Energy Investments

When finished, it'll be the largest rooftop solar installation in the United States.

But it's not where you'd expect it to be.

Amid a slew of recent announcements about large solar thermal installations (a form of concentrating solar power) in the nation's deserts and well-known sunny spots, this project comes as sort of a surprise.

It's going to be built in Summit, NJ―not the first place that comes to mind when you think about solar power.

And it's being built by PPL Corp. (NYSE: PPL), which is not the first company you think of when it comes to alternative energy investments. After all, they're based in Allentown, PA.

So the meaning of this new installation is twofold.

Alternative Energy is Everywhere

We're no longer dealing with a niche market.

According to the recent UN report "Global Trends in Sustainable Energy Development," global investment in renewable energy climbed to $100 billion for the first time last year.

And more than 30% of that total came from mergers and acquisitions headed by large banks like Goldman and Morgan Stanley.

So no matter your stance on the issues driving this high level of investment, you have to agree on one thing: this is pretty big business.

Of course, we'll still need oil. We'll still need gas. I'm not denying any of that. We'll need that stuff for decades.

But the green stuff is here. It's viable. And it's making a lot of investors a lot of money.

Back to the solar installation...

It's going be built on eight roofs throughout the business campus of pharmaceutical company Schering-Plough (NYSE: SGP) in Summit, NJ.

The 1.7 megawatt system will help Schering meet its corporate goal of reducing emissions 5% by 2012 by preventing 1.3 million pounds of carbon dioxide from entering the atmosphere every year.

And that reiterates the first meaning of this story: alternative energy is everywhere.

Even on the roofs of pharmaceutical companies in New Jersey.

That leads directly into the second takeaway from this announcement.

Alternative Energy Investments Aren't Just a Pure Play

Despite what you hear everyday from the national financial media outlets, there are more ways to play this sector than just First Solar (NYSE: FSLR)―though that certainly has been, and will continue to be, a success story.

So if you're not ready to go diving into a pure play solar stock just yet, don't fret. There are plenty of other ways to gain exposure to this booming market.

For starters, you could dabble in a clean energy ETF. These have been well-chronicled in these pages and in the pages of Green Chip Review.

In some instances, these ETFs offer a mix of clean energy and sustainable companies and aren't susceptible to swings that can effect an entire sub-sector, like solar or wind.

To take an even further step away from solely renewable companies, you could also invest in holding companies or in the numerous utilities that have become early adopters of clean technologies.

A case in point is PPL, which I discussed in these pages six months ago to the day. In the two months after that mention, the stock climbed 14%.

It has since fallen, along with the broader economy, but now is looking like a good time to get back in.

In addition to developing, building and operating renewable energy facilities since 2002, PPL plans on investing no less than $100 million in renewable energy projects over the next five years.

And yet, renewables only make up a portion of the nearly 12,000 MW under PPL's control. They also employ coal, nuclear, hydro, natural gas and oil.

So the company isn't a pure play by a long shot.

But they know what's coming. And they have a plan.

That's more than can be said about some of the the larger utilities operating here in The States.

Plus, they offer a dividend, as most utilities do. For every share of PPL common stock owned, the shareholder is entitled to a $0.335 quarterly dividend. What's more, the PPL dividend has seen a 74% rise in the last five years.

Expect the dividend―and the share price―to continue to grow as PPL sees increased revenue and profits not only from increased energy demand and prices, but from good return on their alternative energy investments as well.

Other Backdoor Alternative Energy Investments

A few other savvy utilities, like Portland General Electric (NYSE: POR) and Xcel Energy Inc. (NYSE: XEL), are making good steps as well.

Incidentally, Portland just raised its quarterly dividend to $0.245 per share. It's available to shareholders of record on or before June 25.

Of course, I know more than a few ways to profit directly from alternative energy and cleantech companies as well. And they're being exploited every day in the Alternative Energy Speculator.

Our last play―a water-related company―is up over 10% in eight trading days.

Special for you:

Cleantech Investments

Profiting from the Transformation of Beantown to Greentown

 

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.