Nick Hodge - Angel Publishing

Chinese Cleantech Companies: Made in the USA (by China)

As you'd expect, the China panel was a focal point at last week's RETECH 2010 conference in Washington D.C. So I passed up the Renewable Energy Project Finance and Carbon Credits panels to be there.

I'm glad I did, because you'll be amazed at what the Chinese are doing in the energy sector... and at how much money early investors stand to make.

China's 'Manhattan Project'

As we've clumsily tried to stimulate our way out of recession - spending billions mostly on pet projects - China has acted with concentrated focus.

They're goal: To dominate what will be the largest emerging industry this century: cleantech.

Our stimulus poured $66 billion into the sector. But a buckshot approach - funding everything from nuclear clean-up to federal building retrofits - failed to address the main issues facing the industry, namely securing capital and streamlining large projects.

And what funds were made available are still largely tied up with bureaucratic red tape.

Instead, China has allocated $218 billion to be spent on cleantech in the next five years. And red tape there is mostly non-existent.

As Reuters recently put it:

Beijing's top leaders have made clear their intention to have their nation dominate this new industry, up and down the value ladder. And in their quest for the prize, they are not burdened by concerns facing their Western counterparts — such as the impact of wind turbines on landscapes, higher energy prices for consumers, or investor returns.

And yet, there are plenty of investor returns... because their plan is working.

$12 Million... An Hour

That's what the Chinese are spending to beat us in the cleantech arms race; victories are already being claimed.

The Global Wind Energy Council (GWEC) has reported that China "doubled its entire installed capacity each year since 2005." Last year, they became the largest wind market in the world, passing the U.S. and Europe.

We installed 9.9 gigawatts. They installed 13.

China is now also producing nearly 50% of the world's solar cells annually, but that's likely to grow to 70%. And they're doing it more cheaply than their established German counterparts. (In fact, German companies have been finding it's cheaper to buy from the Chinese than it is to make their own.)

This is leading to a surge of Chinese-based cleantech companies - some of which you've never heard of - that are generating huge revenues and building massive wealth for their shareholders.

I'm talking about companies like GCL-Poly (now the world's 3^rd largest polysilicon producer), Sinovel and Goldwind (global top ten turbine producers), Duoyuan Global Water, and Trina Solar.

Take a look at how those companies are performing relative to U.S. cleantech giants like First Solar (NASDAQ: FSLR):

It's almost embarrassing... unless, of course, you've been investing in Chinese cleantech companies.

And this is only the beginning. The Chinese edge is becoming sharper every day.

Made in the USA (by China)

Perhaps you remember the stink made when it was learned a Chinese company was selected to provide turbines for a $1.5 billion U.S. stimulus-funded wind farm in Texas.

The company was Shenyang-based A-Power Generation Systems (NASDAQ: APWR). And they quickly squashed the opposition by announcing they'll build a manufacturing facility in the U.S. that will employ 1,000 workers while cranking out parts for wind turbines.

Yingli Green Energy (NYSE: YGE) has announced plans to build a solar manufacturing facility on U.S. turf.

At the conference, executives from both GCL-Poly and China Guangdong Nuclear Wind Power said they'll soon be establishing a U.S. presence.

And, in the most revelatory example of all, the Wall Street Journal has reported that "Duke Energy Corp. is in talks with State Grid Corp., China's biggest electricity distributor, over a joint venture that may involve cooperating on power transmission lines in the U.S."

While we were arguing about landscapes (I'm looking at you, Cape Wind.), debating a national renewable energy standard (RES, still hasn't been passed), and decrying cap-and-trade, the Chinese went ahead and leap-frogged us.

During a session at the conference, Hunter Jiang, president of GCL-Poly, didn't mince words about his country's position. After ruminating on China's laggard position throughout modern history's industrial revolutions and commenting on how automobiles and computers were cradled elsewhere, he said, "Today we are the leader."

So tell your senator to invest in the USA, but tell your broker you want to buy China.

Call it like you see it,

Nick

P.S. One tiny company is leveraging China's cleantech spending blitz to take the global battery and auto markets by storm. Its ground-breaking lithium-ion battery is already being used in cars and tools across Asia, and sales are expected to begin in Europe and Asia this year. Warren Buffett has already bought-in - and turned a tidy profit - but it'll double several times over as the company becomes of the largest advanced battery makers in the world.

Notes from This Year's RETECH Expo

Welcome to the Green Chip Review Weekend Edition — our insights from the week in everything alternative and cleantech, as well as links to our most-read Green Chip Review and sister publication articles.

I spent part of this week at RETECH 2010, keeping up to date with global policy initiatives, cleantech capital flows, and gaining perspective on the short- and long-term scenarios for our industry.

There were facts and data aplenty, and as soon as I reread my notes and comb through the PowerPoints, I'll be passing the information along to you. But the short version is this...

The United States had better get its act together. We've still no federal renewable energy standard; no carbon pricing mechanism; no robust incentive or tariff plans to bring solar and wind to parity; no way to streamline big projects; and no 21^st century grid to handle the new generation sources that we're behind in deploying.

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Meanwhile... China emerged last year as the number one wind market in the world, nearly doubling their capacity with 13 gigawatts installed. They're spending $12 million an hour ensuring not only that they win the cleantech arms race... but that they're in a position to export that technology around the globe.

China's financial commitment to cleantech is fully 3% of their GDP. The funds that have been allocated here in the States work out to about 0.5% of ours.

During a session at the conference, Hunter Jiang, president of GCL Solar Energy, didn't mince words about his country's position. After ruminating on China's laggard position throughout modern history's industrial revolutions and commenting on how automobiles and computers were cradled elsewhere, he said, "Today we are the leader."

Next year his company, GCL Solar Energy, will produce 21,000 metric tons of polysilicon. Their wafer capacity will be 2 gigawatts.

Elsewhere this week...

Brazil's Cosan (NSYE: CZZ) — GCI stock pick and world's largest ethanol and sugar processor — agreed to merge its ethanol and fuel distribution businesses with Shell in a $12 billion deal.

The European Union decided this week to hold a technology competition for capture and sequestration (CCS). The prize is nearly $6 billion, and will be taken from the bloc's carbon market.

At the World Economic Forum in Davos this week, the International Monetary Fund said it's working on plans for an international "green fund" to help developing countries deal with climate change. IMF Managing Director Dominique Strauss-Kahn said it "could climb to $100 billion a year."

In the U.S., our wake up call continued...

The International Energy Agency warned this week that we can't meet our emissions goals unless we put a price on carbon (Remember, the EU is handing out $6 billion prizes from their scheme.).

According to executive director Nobuo Tanaka: "To really achieve these (emission) targets, the U.S. certainly has to introduce carbon prices either by cap-and-trade or carbon tax. The Senate must pass this comprehensive energy and climate bill otherwise it cannot design a cap and trade system."

And while the president's budget calls for a "comprehensive market-based policy" to fight climate change, it dropped any projected revenues from such a scheme. Last year, Obama forecast revenues of $646 billion in the years 2012-2019 from an emissions trading program.

That's pretty much the last nail in the cap-and-trade coffin.

We also learned that cellulosic ethanol makers won't come close to meeting their 100 million gallon Congressional output target this year. Instead, the target will be more than 90% less at just 6.5 million gallons.

Yet, I mentioned to find a few bright spots...

The Obama budget asked Congress for a second time to end nearly $40 billion in subsidies for the oil and gas industries and to direct those funds to foster the clean energy economy.

And a report by the RES-Alliance for Jobs found that a federal RES of 25% by 2025 will create three times more jobs than other measures currently being debated by Congress. With unemployment hovering at 10%, Washington is all about jobs these days.

If energy security and reduced emissions won't get Congress to act... maybe a few million green jobs will.

Expect full coverage of the conference next week. You can catch up on the rest of this week's coverage below...

Call it like you see it,

Nick

The Best-Kept Secret of the New Decade: A Single Chinese Lithium Battery Company
The same inventor who perfected the lithium-ion batteries that enable your laptop, cell phone, and other devices to last days on a single charge has been working on his latest to capitalize on the future of transportation. Green Chip reveals this tiny Chinese battery company and what you need to know to get in on this profit opportunity.

The Monster Metal: The Most Profitable Nuclear Advancement in 50 Years
Short of nuclear fusion (which is still decades away), this discovery could prove to be the greatest advancement to the world's energy crisis in 50 years! Green Chip reveals the company with the worldwide monopoly on this monster metal — and why you should buy this stock while it's still selling for less than 20 cents.

Nuclear Energy Stocks: Nuclear Hurdles & Profitable Leaps
Energy and Capital's Nick Hodge gives readers the ins and outs of the upcoming nuclear revival, including the best way for investors to play this growing trend.

Sugar and Cellulosic Ethanol Stocks: Shell Bets Billions on Brazilian Ethanol
Editor Sam Hopkins writes from D.C. today, where he's attending the American Council on Renewable Energy's RETECH expo, and mining the showcases and speakers for new stock picks...

Green Dividend Stocks: Green Stocks That Pay Investors a Bonus
Green Chip Editor Nick Hodge discusses green dividend stocks, how to identify them, and why they're a good buy during rough times.

Cellulosic Ethanol Plant Opens: Tennessee Plant to Turn Corn Cobs into Fuel
Green Chip's Sam Hopkins reports on news of DuPont Danisco, opening a demonstration plant in Tennessee in February where cellulose-rich corn cobs and switchgrass will be converted to fuel.

Nuclear Energy Stocks

We need to encourage American innovation... And no area is more ripe for such innovation than energy... And that means building a new generation of safe, clean nuclear power plants in this country. — 2010 State of the Union Address

Those words, even during a time of intense partisanship, brought both sides of the aisle to their feet during last week's presidential address. And they stood for a litany of reasons...

For starters, total electricity consumption will grow from 3,873 billion kWh in 2008 to 5,021 billion kWh in 2035 — an increase of 30% — according to the U.S. Energy Information Administration's (EIA) most recent Annual Energy Outlook.

But on a global scale, demand will surge much higher thanks to the coming-of-age of developing countries. A 100% increase in global electricity demand is expected in the next two decades.

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And coal, while expected to remain the dominant fuel for electricity, isn't expected to expand all that much. According to the same EIA report: "The mix of investments in new power plants includes fewer coal-fired plants than other fuel technologies" because of "concerns about GHG emissions continue to slow the expansion of coal-fired capacity... even under current laws and policies."

Some areas have already banned the building of new coal plants altogether.

But nuclear is in for a bump, from 100.6 gigawatts (GW) currently to 112.9 GW in 2035. Some of that growth will come from new plants and some will come from upgrades to existing plants. What's more, there are no planned plant retirements in the next 25 years.

In fact, the EIA says "plant owners will apply for, and be granted, license extensions beyond the current 20-year extensions of operating licenses."

And that's just in the U.S. Plenty of other countries are pursuing ambitious nuclear plans, as well. Globally, the World Nuclear Association is projecting a 203% increase in capacity by 2060, from a current base of 373 gigawatts.

So those are the predictions.

But how are we to get there?

Nuclear Hurdles & Profitable Leaps

Of course, nuclear still has its fair share of issues to deal with. And solving these issues is turning into a billion-dollar business as the world races to secure energy for the 9 billion people that will be here by 2035.

Safety is at the top of the list.

As my colleague Keith Kohl touched on last week, Chernobyl still comes to mind for many when nuclear is mentioned. But a new generation of reactors is ready to change all that.

GE (NYSE: GE), Areva, Westinghouse, and Korea Electric Power (NYSE: KEP) are each offering reactors with new technologies that make safety a top priority. These reactors use proven concepts — like gravity and heat circulation — to ensure safety, rather than relying on pumps and valves that can fail.

The new reactors will add to a nuclear safety record that has been blemish-free for two decades, as operating experience increased from 4,000 reactor-years to more than 13,000.

Waste is also a key issue, especially with the fate of Yucca Mountain unclear. But looking to the international community can provide some answers.

In Sweden, where 45% of the electricity comes from nuclear, a small town recently struck a deal to create one of the world's first-ever long-term storage facilities for nuclear waste. The site will commence construction in 2016 and will be able to store nuclear waste for 100,000 years.

What's interesting is that several Swedish towns were actually competing to host the facility for its revenue and job prospects...

Finland and France are also pursuing this type of long-term storage. (For investment purposes, the Swedish Nuclear Fuel and Waste Management Companies is owned 36% by Vattenfall, 30% Forsmark, 22% OKG, and 12% E.ON Sweden.)

But the biggest advancement that will push nuclear forward — both as an energy source and an investment vehicle — is going to come from the fuel itself.

Nuclear Plays the Metal Game

Top universities have been toying with the idea of adding various metals to uranium to form a kind of nuclear superfuel that could solve many of the industry's problems. Metal oxides are already used as reflectors in nuclear warheads and reactors, but they're about to be added to the fuel, too.

Researchers have found that combining metal oxides with uranium oxides results in a fuel that is able to withstand much higher temperatures, greatly increasing the efficiency and safety of nuclear power plants.

And they've found that one metal, in particular, outperforms all others.

The company funding this research is about to enter the last of three test phases before the new fuel can be made available. And they're already in $100 million supply talks with major nuclear fuel suppliers.

What's more, the company owns the technology from soup to nuts. They own the process to make the fuel additive... and they own enough reserves of the rare metal to power the nuclear industry for 100 years.

The full report on this company — just out today — explains the process, the metal, and how the tiny company behind it is about to make a fortune.

Call it like you see it,

Nick

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The Beginning of a Nuclear Revival

Obama's fiscal 2011 budget is seeking a near-200% increase in nuclear funding.

Right now, $18.5 billion has been authorized. He's looking for $54 billion.

According to the Wall Street Journal, the request comes just days "after the U.S. Energy Department announced Friday that it has asked former U.S. Rep. Lee Hamilton, a Democrat, and former National Security Advisor Brent Scowcroft to lead a panel charged with developing a long-term solution for managing the nation's used nuclear fuel and nuclear waste."

It sure sounds like the nuclear industry is about to come out of hibernation.

Stoking the fire, Energy Secretary Steven Chu said this week, "I personally think that nuclear power has a place" because "it is carbon-free."

And Carol Browner, Obama's energy and climate advisor, has been out stumping for nuclear as well: "As the world moves to tackle climate change and diversify our national energy portfolio, nuclear energy will play a vital role."

It's not hard to see the writing on the wall...

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Nuclear: The New Common Ground

Even Congress is talking about nudging nuclear along... with support from both sides of the aisle.

Reuters reports that "Three U.S. senators — Democrat John Kerry, Republican Lindsey Graham and Independent Joe Lieberman — are working on a bipartisan bill to cut U.S. greenhouse gas emissions."

To gain republican support, the bill includes incentives and loan guarantees that would expand the use of nuclear power.

Lieberman's spokesman said the loan guarantees "will help engage supporters of nuclear power from both sides of the aisle."

Kerry said it's "an important sign of the White House's commitment to addressing climate change and advancing clean energy goals."

Even the perpetually displeased Lisa Murkowski had good things to say, exclaiming that increased incentives were "a good first step toward expanding our use of clean nuclear energy."

Obviously, nuclear energy is quickly emerging as the common ground for a sharply divided congress. It's time to find some investment opportunities.

Profiting from a Nuclear Revival

The nuclear industry has been waiting for a loan guarantee announcement for some time now. Last year, the Department of Energy whittled the potential recipients down to a short list.

Here are the four companies likely to receive them:

Southern Co. (NYSE: CO)
Constellation Energy (NYSE: CEG)
NRG Energy (NYSE: NRG)
SCANA Corp. (NYSE: SCG)

If you're looking for a safe way to play nuclear expansion, these companies are probably a good place to start.

Big utilities with nuclear assets — especially if they're receiving gov't incentives — will benefit as a new generation of plants are built.

According to former EPA head Christine Whitman, "If we're going to stay at 20 percent total capacity, which is where nuclear is today, by 2030, then we need between 25 and 30 nuke reactors."

So buying and holding Cameco (NYSE: CCJ), which has exposure to uranium fuel supplies, is probably also a good bet.

For riskier fuel-side bets, take a look at USEC Inc. (NYSE: USU), Uranerz Energy (AMEX: URZ), or Denison Mines (AMEX: DNN).

But the most lucrative nuclear profits may come from a concept that hardly anyone has covered: nuclear fuel additives.

You see, major universities have been studying the impact various metals have on the performance of uranium fuel. And they've found that bonding certain oxides to uranium pellets can greatly improve the operation of nuclear plants.

It allows more energy to be extracted from the nuclear fuel, which will improve the margins of plant operators. And it vastly improves thermal conductivity, improving safety by keeping the core temperature of the uranium cooler.

In anticipation of a coming nuclear bull market, I've prepared a report on the one company that has exclusive rights to the oxide process. They also own enough reserves of the rare metal required to make the oxide to power the nuclear industry for 100 years.

Testing is almost complete and the company is already in multi-billion supply talks with major nuclear fuel companies. You'll want to know about this company before the fuel is officially approved for use.

Call it like you see it,

Nick

The Economist Calls it "The Fifth Fuel"...

After uranium, coal, gas, and oil...

And there's one company that has a monopoly on it.

Giant banks like Citigroup, Credit Suisse, and Goldman Sachs... are all investing in it.

But this report is about to blow the lid off "The Fifth Fuel" story... And how investors can buy the company that makes it for less than $1.00.

The share price will easily double - or triple - as word gets out.

Green Dividend Stocks

Now that the market has taken a sustained slide after a months-long bull run, more and more people are asking about safe green investments.

Specifically, they want to know about green dividend stocks.

Of course, dividend stocks are nothing new in the investment world. But in case you're not familiar, here's a brief recap.

What are Dividend Stocks?

When a company turns a profit, it has a few options:

It can pay down debt;
It can repurchase shares;
It can reinvest in the business; or
It can share the profit with shareholders.

Americans Are Junkies

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When a company chooses to share its profits with shareholders, it pays a dividend.

The dividend can vary in percentage and must be approved by the company's board of directors. The amount you receive is called a dividend yield.

My colleague Steve Christ succinctly described dividend yield in a recent Wealth Daily article:

Dividend yield is simply your rate of return from dividend payouts, exclusive of any stock price appreciation. It's calculated by dividing the dividends you receive over a year's time by the price you paid for the stock.

For example, your dividend yield is 5% if you paid $20 per share, and you receive $1 per share in dividends ($1/$20) over the 12 months following your purchase.

Dividend yield, however, is not a fixed number. It changes along with the share price. For instance, say someone else buys the same stock a week later when the share price had moved up to $25.

Instead of 5%, their dividend yield would only be 4% ($1/$25).

In short, it is a cash payout that you receive for simply being a shareholder, sort of like receiving a bonus based on a company's earnings.

What's more, dividends are taxed at a much lesser rate than other income.

During times of market angst, many investors turn to dividends because they are paid regardless of the stock's performance — especially if the company has a solid history of dividend payouts.

Are There Green Dividend Stocks?

When choosing a dividend stock, you'll want to look for its annual dividend rate. For most investors, the easiest way to do this is in the Key Statistics section on Yahoo! Finance. Take Emerson Electric (NYSE: EMR) for example, the smart grid and efficiency specialist...

You'll see that it pays a $1.33 annual dividend (Rate), or 3.2% (Yield) of the current share price. That means you get $1.33 per year per share. The Yield will change based on the stock price, but the Rate will remain the same, until changed by the board of directors.

Now, some green stocks are in nascent industries like wind and solar, and haven't yet established the constant earnings and cash flow required to offer a dividend. You're probably better served by checking out larger companies like utilities, water companies, and transmission and distribution companies.

Anything above 5% yield is pretty good, but you'll want to check the company's website to see its history of payouts. General Electric (NYSE: GE), for example, has been constantly decreasing its dividend.

Here's a brief list of green dividend stocks to get you started:

ABB (NYSE: ABB)
ESCO Technologies (NYSE: ESE)
Flowserve (NYSE: FLS)
Johnson Controls (NYSE: JCI)
Lindsay Corp. (NYSE: LNN)
Integrys Energy (NYSE: TEG)
Ormat Technologies (NYSE: ORA)
United Technologies (NYSE: UTX)
Veolia Environment (NYSE: VE)

Call it like you see it,

Nick

Obama Highlights Energy as Sector for Innovation in State of the Union

The disparity between cleantech news and stock performance couldn't be greater.

News of completed deals, capacity expansion, IPOs, and the availability of capital whirled around the wire all week... yet the sell-off continued, putting us back to November levels:

Of course, it's hard to blame investors for taking profits on a market that surged 60% since last March.

I'd like to think of it as the inverse of the "two steps back" colloquialism; this is our one step back before marching forward.

Uranium is Old News

The future of the nuclear industry is beryllium.

One company has just pioneered a new nuclear fuel additive - called beryllium oxide - that can prevent Chernobyl-like disasters... while saving billions in fuel costs.

Nuclear fuel suppliers like Westinghouse are already lining up... And soon, no reactor will be fired up without this new fuel.

The full report - including why the company behind it could triple in price - is available here.

So we know that stocks have been off a bit. Here's this week's portion of the reasons they'll come back...

We learned on Monday that U.S. wind capacity surged 39% in 2009, from 25,100 MW to 35,000 MW. The 9.9 GW installed last year far surpassed the 8.4 GW installed in 2008.

More than 85,000 people now find work in the U.S. wind energy industry.

On Tuesday, General Motors continued to cement the future of electric transportation. As Chris Nelder pointed out this week (you can catch his article below), the Volt is quickly emerging as GM's flagship product — much like Toyota's Prius — and the company embraced it by announcing it will set up a $246 million plant to build electric motors.

That's on top Ford's $450 million battery plant announcement a few weeks ago.

Things were really heating up by Wednesday, before the State of the Union was even delivered.

In a major breakthrough, the U.S. Securities and Exchange Commission (SEC) voted 3-2 that "companies have a responsibility to discuss the effects of the environment and pending rules on their business." That decision should add to the value of cleantech companies while detracting from those with climate or carbon risks.

The same day, a $3.9 billion BlackRock energy fund anointed the cleantech sector, saying it's about to increase its exposure to solar stocks. More than half of the mega energy fund is now weighted in renewable energy

By Wednesday night, the wheels were really turning as the President mentioned "clean energy" or "clean technology" at least four times in his first State of the Union address.

Here's a little piece of it:

...We need to encourage American innovation. Last year, we made the largest investment in basic research funding in history, an investment — an investment that could lead to the world's cheapest solar cells or treatment that kills cancer cells but leaves healthy ones untouched.

And no area is more ripe for such innovation than energy. You can see the results of last year's investments in clean energy in the North Carolina company that will create 1,200 jobs nationwide, helping to make advanced batteries, or in the California business that will put 1,000 people to work making solar panels.

But to create more of these clean-energy jobs, we need more production, more efficiency, more incentives, and that means building a new generation of safe, clean nuclear power plants in this country...

It means making tough decisions about opening new offshore areas for oil and gas development...

It means continued investment in advanced biofuels and clean-coal technologies.

And, yes, it means passing a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America.

And the industrial world is taking notice of the trend. Power equipment giant Alstom declared on Thursday that it "expects demand for renewable and nuclear technologies to outstrip growth in coal and gas fired electricity projects."

I've been telling you nuclear would heat up this year...

And by the end of the week, Obama had proposed a tripling of government loan guarantees for nuclear reactors to more than $54 billion.

Look for a new Green Chip nuclear play in the coming week to take advantage.

You can catch the rest of this week's coverage below.

Call it like you see it,

Nick

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Thank You, Mr. President: How Obama has Made Green Investors Rich
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Spain's Solar Power Market Meets Morocco: Europe Looks South for Clean Energy Growth
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How to Profit from Energy Efficiency: The NYSE Itself is Bullish on this Tech
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Scott Brown Energy Agenda: Will this Senator Kill Renewables?
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How to Profit from Energy Efficiency

Have you had your encounter yet?

Unless you're a complete shut-in, energy efficiency has undoubtedly penetrated your day-to-day activities in some way.

From utility bill inserts to presidential pleas, it's hard to escape the efficiency mantra that has swept the nation — and the world.

And while small steps are helping millions of homeowners save on their energy bills, few realize the cumulative effect the trend toward efficiency is having on billion-dollar corporations and the broader public markets.

Indeed, the New York Stock Exchange (NYSE) has literally adopted energy efficiency, issuing the following statement after a big switch in its approach to data management:

Today's announcement means that NYSE Technologies and Voltaire can now offer customers the lowest latency and most energy efficient solution for accelerating market data applications. The performance and cost savings this solution provides is critical for financial services firms that rely on speed and performance to gain competitive advantage but also need to keep a close eye on data center power requirements and spending.

Obviously, the NYSE paid Voltaire for its services, as have numerous other companies looking to lower the power bill associated with data storage and processing. That's what I mean by the 'cumulative effect' of the trend toward efficiency...

Big Pharma's Survival Strategy

$7.5 billion a year in research and development is simply too big a pill for Big Pharma to swallow.

That's why they're buying out their breakthroughs for pennies on the dollar.

And their biggest target right now... is one I'm guaranteeing with my own money.

Learn all about it right here.

The companies providing the solutions stand to make a killing. Look what Voltaire returned to investors as it racked up contracts in the IT efficiency space:

And that's just one company in one small sub-sector of energy efficiency. There are plenty more companies offering equally impressive gains as the layers of energy efficiency are peeled away.

Profiting From the Energy Efficiency Onion

If you think about efficiency as an onion, there are many layers from which to profit, some easily identifiable and others more hidden.

In addition to data storage efficiency, investors can profit from efficient lighting, cogeneration, insulation, smart glass, digital meters, smart thermostats, Energy Star appliances, and so on. And that's just off the top of my head.

The business world is currently in a frenzy to reduce energy usage, led by policy, incentives, and shareholder demand. Companies realize they can improve their bottom lines — and, therefore, value for shareholders — by reducing operational costs. And they're willing to pay upfront to do so.

Last week, I touched on the efforts of giant corporations like Wal-Mart, Johnson & Johnson, and Morgan Stanley to streamline their operations and reduce energy costs. Each example represented a unique layer of the efficiency onion... and each one had a unique profit angle for investors.

But this trend is only now embarking on a years-long journey.

PepsiCo just announced that seven of its plants went to zero waste in 2009 as part of the company's goal to shrink its footprint worldwide. Not sending tons of garbage to the dump adds to the bottom line.

And UPS recently added 245 compressed natural gas trucks to its fleet, bringing the total up to 1,900. Paying less to fuel a fleet of trucks adds to the bottom line.

Those are two more examples of efficiency layers. Of course, there are plenty more. But to drive home the point, take a look at the plays that benefit when Pepsi produces less waste or UPS adopts CNG vehicles:

Westport Innovations (NASDAQ: WPRT) develops heavy engines that run on natural gas and Casella Waste Systems (NASDAQ: CWST) offers solid waste management and recycling services. Expect these efficiency-related sectors to gain even more attention as fleets and factories try to optimize their operations.

Low-Hanging Layers

Right now, the low-hanging layers of the efficiency onion are being peeled away: replacing old diesel trucks, improving energy-hungry data centers, etc.

But there is plenty more to come. Nearly every building and electronic device on the planet is a target for efficiency. There are plenty of companies ready to make it happen... and they'll be profiting — as will their shareholders — for years to come.

An easy way to get in on the action is to buy the First Trust Smart Grid Infrastructure Index Fund (NASDAQ: GRID). It'll give you access to dozens of companies making money by making the use of energy more efficient.

For a more concentrated way to profit from this trend, you'll want to read my new report on the one company that could triple as its sales explode, thanks to the efficiency trend. Those who got on-board early have doubled their money in just a few weeks time...

But there's much more to come as this company's unique energy-saving device is installed in millions of homes across the country.

Call it like you see it,

Nick

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Long-term Positives for the Green Sector Far Outweigh Recent Blip

Stocks slid this week on multiple concerns, ranging from a pullback in Chinese lending... to a new Obama bank plan... to missed blue chip earnings.

Closer to cleantech, a German solar subsidy scare and the realization that an energy bill won't be possible this year added to the selling sentiment. Of course, I've been telling you we wouldn't pass meaningful legislation this year.

The main reason an energy bill won't pass is an overambitious agenda. You can't tackle health care and energy in the same year. But the election of Scott Brown has given the Dems one less vote, and has already led House Majority Leader Steny Hoyer to announce the bill could be split in two.

I think cleantech stocks will have a good year anyway.

This 57x Profit Opportunity Falls Into A Legal "Gray Area"

Nonetheless, stocks sank as the negative news startled the masses. And after such a sustained bull run, there were plenty of profits to be taken.

A look at a weekly chart for major wind, solar, and smart grid ETFs tells the story:

The German solar subsidy cut was probably the biggest news of the week... though the market reacted in entirely the wrong way. First of all, a subsidy cut is a sure side of industry maturation, which is a long-term bullish indicator with short-term pangs.

The cut will mostly affect European producers, since their prices are higher than manufacturers in Asia. They'll either have to cut prices or buy cells and modules from China. As such, Chinese solar stocks should've bounced on the news. The opposite reaction has created buying opportunity.

In fact, I'm seeing good buys in multiple cleantech sectors. So be sure not to fall victim to shortsightedness. The long-term positives far outweigh the blip we're experiencing this week.

There have been increased applications for initial public offerings (IPOs), which points to confidence in the public market's ability to provide funding. Chinese turbine blade maker HT Blade, Indian PV cell maker Indosolar, Chinese polysilicon producer Daqo, and wafer maker JinkoSolar have all said they'll test their luck on major exchanges.

And it seems investors are constantly forgetting the great growth ahead for the cleantech industry. Renewable energy capacity has only made a small dent in developed nations. Continued growth in the U.S. and Europe, coupled with leap-frogging in India and China — where billions need energy and water — will lead to several doublings over the next few decades.

We've talked about cleantech growth in China for weeks on end now. This week, India announced new rules for trading clean energy certificates with the aim of "doubling green power generation to 25,000 MW in four year."

Other long-term bullishness came domestically, when the DOE's National Renewable Energy Laboratory released a report saying wind energy could power 20% of the eastern grid. The report, which came out this week, said the goal would require a $90 billion investment in turbines and transmission. (You can catch that article below.)

That alone would create investment opportunities. But wind growth isn't limited to the eastern U.S.; it's expanding all across the globe. And if $90 billion seems unrealistic, consider Canada. A $6.7 billion deal was announced in Ontario this week to build four wind and solar power clusters with a capacity of 2,000 MW.

So don't let a few bad days in the market get you down... or allow you to question the future of cleantech. Deals are getting done, projects are being completed, and there is plenty of growth ahead.

We're still very much in the early stages of this energy transition, and those that take note early, support the transition, and invest... those folks will be rewarded accordingly for years.

You can catch up on the rest of the Green Chip's coverage below.

Call it like you see it,

Nick

The Little Contraption that'll Save You Big in Utilities: Introducing the "Negawatt Box"
Green Chip reveals the only company boasting the technology to reduce your monthly energy bill by 44%.... and explains why the Negawatt Box is your opportunity to double — even triple — your money within the next year. Our office has saved hundreds of dollars with this new energy-saving technology — in just three months!

Peru Wind Energy Projects: The Profits from this Energy Armada are Coming Soon
International Editor Sam Hopkins files this report from Peru on the clean energy auctions going on right now in Lima, Peru...and how you can profit.

The End is in Sight for this 40-Year Drug War: The Coming End Could Mean Massive Profit for Investors
The same drug lords have had consumers completely at their mercy for the last four decades. But their kingdom is about to crumble... Green Chip reveals why a staggering amount of money is about to be made from the end of the biggest and most powerful drug cartel in our nation's history.

A Look at Energy Management Stocks: How Saving Energy is Returning Billions
Energy & Capital Editor Nick Hodge describes how blue chip companies are adding billions to their bottom line by saving energy... and how investors are profiting, as well.

DOE Wind Report: New Report Shows No Technical Barriers to 20% Wind Integration
Green Chip Publisher Jeff Siegel shares the latest data from the DOE shows no fundamental technical barriers to 20 percent wind integration.

Energy Efficiency Companies: Profiting from "The Fifth Fuel"
Green Chip Editor Nick Hodge discusses energy efficiency, the billions being spent on it by the Fed, and how investors can profit by keeping an eye on the trend.

A Look At Energy Management Stocks

By now you've heard about energy efficiency — also called negawatts or the "Fifth Fuel" — and the big splash it's making in the market.

Boiled down to bare essentials, energy efficiency is hot for one single reason: it has a huge return.

Last week, we covered the impact small steps can have on your home energy bill... and how you can also profit from the companies providing those solutions.

Today, I'd like to extend that theme to include commercial applications while highlighting some other avenues for profit.

The Coming Nuclear Renaissance

If there were a company making a nuclear fuel that:

Instantly makes power plants operate 25% to 50% more efficiently, saving billions upon billions of dollars in operating costs, every year
Prevents any Chernobyl-like meltdowns from ever happening again and
Drastically slashes the radioactive life of spent uranium

You'd want to know about it, right?

The full report - including why the company behind it could triple in price - is available here.

The Strongest Link in the Profit Chain

Over the past week or so, the Department of Energy has made some serious announcements regarding energy efficiency. They announced, among other things:

$187 million to improve efficiency for heavy-duty trucks and passenger vehicles;
$47 million to improve efficiency in the information technology and communication sectors;
$37 million for next generation lighting.

All of this on top of a $3 billion budget for Cash for Clunkers and a $300 million rebate program for Energy Star appliances.

What that means for investors is easy pickings in the energy efficiency market. And I've been taking full advantage lately.

Take that $187 million announcement from above. It broke down like this:

Cummins Inc. (NYSE: CMI) - $53.8 million
Daimler Trucks - $39.6 million
Navistar, Inc. (NYSE: NAV) - $37.3 million
Chrysler Group - $14.5 million
Delphi Automotive - $7.5 million
Ford (NYSE: F) - $15 million
GM - $7.7 million
Robert Bosch - $11.9

And while there may be some publicly-traded plays in that group, other companies still stand to benefit as that money is spent on new efficiency projects downstream. So companies like Johnson Controls (NYSE: JCI) and Fuel Systems Solutions (NASDAQ: FSYS) — though they didn't directly receive gov't funds — could end up being the strongest link in this profit chain.

It's a little bit different on the electricity side of things...

Shocking Gains from Energy Savings

The companies on the automotive side of things are larger, more established, and have much higher market caps... so it takes more than a gov't hand-out to send them screaming higher.

When it comes to electricity though, new, under-the-radar companies are using incentives to ratchet-up their sales, and investors are being rewarded accordingly.

Take Cree Inc., for example. This smart lighting company has been a gem all year as companies raced to cut costs through efficiency measures, and their sales and revenue soared. It's up 290% in a year — including 16% today after crushing earnings last night. Cree received some of the $37 million mentioned above and counts Wal-Mart and other stalwarts as customers.

Or take EnerNoc (NASDAQ: ENOC), which specializes in helping its customers reduce electricity use and sells this excess back in to the grid. It's up more than 340% in the past year as it racked up deals with some of the nation's top utilities and added Morgan Stanley and Johnson & Johnson to its customer base.

And it all comes back to one main theme: the huge returns energy efficiency has to offer.

I spent $200 last year and easily saved five times that on my energy bills. That's the same thing Wal-Mart, Morgan Stanley, Johnson & Johnson, and the federal government are doing... only on a much larger scale, and with much higher returns.

And investors can join the fray by owning shares of the companies providing the solutions. The returns have been pretty good, as you can see below:

Now, the growth period for these stocks isn't over. Each one in that chart is still worth a look... just don't expect another 400% return this year.

If you missed that monster run and want another crack at a ground floor efficiency opportunity, I have a company you should take a look at. It's making a radical new energy-saving device with tax credits available for installation.

It's the same formula that led Cree and EnerNoc to huge runs last year, but this stock is still trading for under $1.00. You'll want to read all about why I think it could triple.

Call it like you see it,

Nick

Here's What Every Wealthy Energy Investor Already Knows...

The U.S. Department of Energy has indicated that enough electric power for the entire country can be generated by covering about 9% of Nevada with solar power systems. This is a plot of land roughly 92 miles by 92 miles.
According to M.I.T., there are over 100 million quads of accessible geothermal energy worldwide. The world only consumes about 400 quads.
The Institute for the Analysis of Global Security has stated that if all cars on the road were hybrids, and half were Plug-In Hybrids by 2025 -- U.S. imports would be reduced by 8 million barrels per day. That's about 80% of our daily consumption!

Want a million more reasons that renewable energy investors have become some of the wealthiest in 2009?

Click here for all the proof you'll ever need!

Energy Efficiency Companies

No energy play is currently hotter than energy efficiency, in all its forms. Think about it...

For several years running now, the hottest cars at the Detroit Auto Show — and most auto shows, for that matter — have been cars that use less gas: the Tesla, Volt, new versions of the Prius, etc.

And this year was no exception. In fact, the show added an all-electric wing called Electric Avenue that hosted popular attractions like the Nissan Leaf, Volvo C30, and the Ford Fusion Hybrid, which won Car of the Year.

There wasn't a Hummer to be found. Ironically, GM is halting production of all Hummers this week as the brand continues its stay in auto purgatory.

Efficiency is all the rage in home appliances, too. I just bought a new Energy Star dishwasher made by Maytag, thanks to a $300 million rebate program made possible through the stimulus — the equivalent of Cash for Clunkers for water heaters, air conditioners, clothes washers, and more.

Surely you haven't heard anyone asking for appliances that use more energy or cars that use more gas...

And the reason for that is simple: using more energy costs more money.

Win Big When the Next Domino Tumbles

First there was housing... then the banks. And after that it was the automakers that came crashing down. Next up is a Commercial Real Estate Crash.

And unfortunately - just like the rest of them - the government's last-ditch efforts to prop up this domino are all doomed to fail.

But a 372-year-old investing technique is the answer to it all. And it might not only save your portfolio during this $1 trillion crisis... but also make you a fortune!

To learn more about this moneymaking opportunity click here.

The Fifth Fuel

It's not as sexy as erecting a massive wind farm or commissioning a new nuclear reactor — and it certainly offers far fewer photo ops — but businesses and decision-makers the world over are quickly starting to realize the power of energy efficiency.

Wal-Mart is adding billions to its bottom line by making its stores and supply chain more efficient. Boeing has outdone Airbus with its 20% more efficient Dreamliner. Forbes recently reported that "BP made over $2 billion substituting efficiency for fuel; DuPont and Dow Chemical, $3 billion apiece."

That's what's so exciting about energy efficiency... A small investment on the front-end leads to huge savings on the back-end. And it applies to every business...

Retail chains can save money by retrofitting stores with energy efficient lights and HVAC systems. Grocers can improve the electricity use of their massive coolers and freezers. Companies producing goods can optimize their factories and distribution chains.

It's like a brand-new, earth-shattering discovery has been made. Only it's not a new product — it's a concept. The idea is to do more with the energy we already have access to. And the net savings have been dubbed "The Fifth Fuel."

And there are two best parts here...

First, there are incentives available for many of these upgrades. I already mentioned the $300 million available to upgrade your appliances. The Cash for Clunkers budget came in at $3 billion. And just this month, the Department of Energy announced $187 million to improve efficiency for heavy-duty trucks and passenger vehicles, $47 million to improve efficiency in the information technology and communication sectors, and $37 million for next generation lighting.

Second, there's more than a handful of publicly-traded companies on the receiving end of not only billions of gov't cheese, but also billions in sales from the private sector as the financial benefits of efficiency are realized.

They Spend, You Profit

As these billions are spent on energy efficiency upgrades, a few companies (and their shareholders) are making a lot of money.

For example, Ford, Cummins, GE, IBM, BAE, HP, Yahoo!, and many others have all been declared recipients of energy efficiency dollars from the federal government.

And look how companies that provide energy efficiency solutions have been performing:

Veeco Instruments (NASDAQ: VECO), a smart lighting company — and the best performing stock in the chart above — has gone from about $3.00 to over $32.00... since March.

Many companies have made runs like that. And more are about to.

I actually have my eye on one company — currently trading for less than $1.00 — that's about to make a similar run.

They make a device called a "Negawatt Box" that can drastically reduce energy consumption in both residential and commercial buildings. And a tax credit is being offered to all who install it.

Our electrician recently installed one at our Baltimore headquarters... and we quickly realized 44% savings on our utility bill.

The device is so unique — and the investment opportunity so large — that I've compiled a full report about the company.

It describes not only how to take advantage of the product for yourself, but also how you can profit by owning shares of the company that makes it.

Call it like you see it,

Nick

Energy Efficient Technology

No energy play is currently hotter than energy efficiency, in all its forms. Think about it...

There wasn't a Hummer to be found. Ironically, GM is halting production of all Hummers this week as the brand continues its stay in auto purgatory.

Surely you haven't heard anyone asking for appliances that use more energy or cars that use more gas...

And the reason for that is simple: using more energy costs more money.

North Dakota Oil Boom Has Early Investors Making Fortunes

"The Bakken is clearly the biggest oil play in the U.S. I think we're seeing the investment come back, and 2010 should be a pretty amazing year." -- N.D. Petroleum Council President Ron Ness

Our readers have already cashed in on 9 winning Bakken oil trades... with 7 more winning positions still open.

Best part is, we're just getting started with our profitable N.D. Bakken gems.

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