The first quarter was terrible for solar stocks. The second quarter continued the sector’s slide, until early June, when solar stocks began an ascent. As measured by the Claymore/MAC Global Solar Index, the sector is approximately 25% off its June 7th low, through July 21st. One should keep in mind, however, that the sector is still 25% below where it ended 2009. A recent catalyst has been strong demand from Germany, where projects are rushing to get funded prior to the end of 2010, as feed-in tariffs there will be less attractive in 2011 and beyond.

The Tier 1 solar companies are finding that their production for 2010 is sold out, which is certainly providing support to their stock prices. However, 2011 does not look as pretty. Greentech Media Research, projects a capacity of 16.1 GW by the end of 2010. Capacity will continue to outpace demand in 2011, leading to a possible overcapacity of as much as 10GW for 2011 (GTM Research). This will put pressure on module prices, which might need to reach $1.4/watt for supply and demand to clear (GTM Research). At that price, some of the weaker players will fold and consolidation will take place. Though a medium-term challenge to solar, it will push solar PV to parity with other sources of electricity generation, which in turn will unleash demand.

So who are the winners in the 2011 environment? We think those companies with low manufacturing costs, market leader positions, vertical integration to the project level, and scale in attractive markets such as Italy (high insolation, high feed-in tarrifs, high electricity costs), will gain at the expense of the weaker players. We also think there will be some significant price volatility as the industry goes through this challenging phase, which could lead to attractive buying opportunities for our solar stocks. As far as existing holdings, that means SunTech (STP) and First Solar (FSLR). We also have our eyes on Trina Solar (TSL), Wall Street’s favorite, but it needs to fall from grace a bit first.

BP
What are the lessons to be learned from the BP oil spill in the Gulf of Mexico? Asking that question implies that there is something good that can come out if it; some lessons to be learned. However, if that is the only way we can learn, I am not very optimistic about the future. The BP story has been well published and there is not much for me to add in terms of the magnitude of the tragedy and the sequence of events. I will therefore restrict my comments to the perspective from which we look at stocks: risk and return.

There is no better example of what environmental risk means and why investors need to consider it. Going into the quarter, BP was worth $180 billion, coming out of it, the value had been halved to $90 billion. To put that into perspective, that loss in value is on the order of magnitude of the total market cap of countries such as Greece, Portugal, and Austria.

According to the Occupational Safety and Health Administration (OSHA) BP committed 760 “egregious, willful” safety violations, while Sunoco and Conoco-Phillips each had eight, Citgo had two and Exxon had one comparable citation (ABC News, May 27, 2010). If you look back at the stock valuation prior to the spill, you would conclude that BP’s elevated environmental risk was not reflected in the stock valuation, and investors paid for that.

Though this might be an “aha” moment for savvy investors, I am not convinced it will boost the green economy per se. I agree with New York Times reporter Robert Friedman’s assessment that “so far, [the administration’s] policy is [to] think small and carry a big stick,” failing to parlay the momentum of public anger into a bold strategy to end our country’s oil addiction.

Tesla
JPS is not an investor in Tesla Motors (TSLA), but the IPO has generated quite the buzz on the green investing circuit, so I almost feel obliged to talk about it. Looking at the stock chart for Tesla, one could conclude that investors drive the stock like the owners drive the car: rapid acceleration and deceleration, combined with lots of tight turns. Perhaps they are the same people.

Benjamin Graham (famed value investor), stated that the market in the short-term is “like a voting machine–tallying up which firms are popular and unpopular. But in the long run, the market is like a weighing machine–assessing the substance of a company.” Certainly, Tesla has a shot at winning the beauty contest, or popularity contest here in the short-term. What I am less sure about is if this luxury car maker will be successful long-term at transforming into a maker of mass-produced cars, which is where it tells investors the bacon is.

I would like to see them reach a few more milestones, before making a commitment. Will I miss some of the upside? In the end, if they are successful “yes.” But at the same time, I will miss the downside too, if things don’t work out as planned and investors get disappointed.

People love fast cars. Add some glitzy Silicon Valley eco-inspiration to it and you have something many can get excited about. Then park a few Tesla Roadsters in downtown Manhattan for the company’s NASDAQ debut and you have a formula for success.

When Krispy Kreme Donuts went public in April of 2000, many on the floor of the NYSE were excited and gorging on free donuts that were delivered for the occasion. In August 2003, the stock reached a high of $44 up almost 350% from where it started. Today, it trades at $3.37, 92% off its high. Is that a fair comparison? Probably not. What it does show however, is that temptation can be a dangerous thing.

Carbon Politics
It is undeniable that the green sectors are influenced to a large extent by what happens in Washington. As the old energy economy is heavily influenced by government policy and vice versa, so is the new energy economy. Not having a national energy policy that is reliably supportive of alternative energy and energy efficiency, is the largest headwind the green economy faces. Consequently, many green investors are deeply concerned with what the November elections might bring.

In California, Proposition 23, sponsored by Valero Energy and Tesoro, two large Texas refining companies, would essentially suspend AB 32, the State’s Global Warming Law, on grounds of the alleged correlation between unemployment and environmental legislation. This seems odd, considering that some of the developed countries that currently have the lowest unemployment rates also have the most stringent environmental laws (Germany, Sweden, Holland, for example). Nonetheless, Prop 23 is a dark and ominous cloud as it is cleverly written to suggest it promotes jobs, which is the number one issue for voters (and rightfully so).

On the Federal front, the Kerry, Lieberman, Graham climate change bill, is now just the Kerry- Lieberman bill and few in Washington give it much of a chance of passing. Senator Reid announced on July 21st that cap and trade legislation, even a limited version that would only apply to the electric utilities sector, is shelved indefinitely, and will not be part of pending national energy legislation.

I hold out a sliver of hope that the increasing lobbying clout of alternative energy companies and the prospect of green jobs, will create some bipartisan appetite for the carrot (supporting alternative energy and cleantech), if not for the stick (punishing traditional fossil fuel energy generation and imposing carbon caps).

Though legislation would provide a big boost, regulation is farther along. The U.S. Environmental Protection Agency (EPA) recently announced it will expand permitting requirements starting July 2011 under the Clean Air Act to cover all new facilities with greenhouse gas (GHG) emissions of at least 100,000 ton per year and modifications that increase GHG emissions by at least 75,000 ton per year. The EPA estimates that approximately 900 additional permits covering new generating capacity and 550 permits covering existing capacity will need to be obtained as a result of the ruling.

As the EPA and the States become more proactive on the regulatory front, the business community will become more supportive on the legislative front, as they will see the writing on the wall and conclude it is in their best interest to have a seat at the table. Assuming that the era of externalizing environmental costs is drawing to a close, businesses will likely be better off with a clear national policy, as it will assist them in making informed capital investment decisions that might otherwise be shrouded in uncertainty.

Probably due to the fact that I’m over 50 now with a repellent view of hyperbole and unsubstantiated opinions I have been uncomfortable with the opposite view as well: socially responsible investing improves rate of return. It has been my view based upon empirical experience of managing SRI portfolios for 20 years that SRI is not a significant determinant of investment performance. SRI is a highly subjective practice where investors can have divergent opinions on industries and companies. There is no unified screening standard amongst the SRI industry, as each firm or fund makes their own decisions on screening criteria. While some funds screen for only 3 or 4 issues there are other funds that screen over a dozen.

Practitioners of SRI may draw attention that investors always assume a given level of risk with any equity investment but that the risk premium associated with SRI is less. Case in point, the risks associated with Tobacco, Asbestos or BP and the Gulf oil disaster. However in my 20 years involved with socially responsible investing, screening stringency is often a matter of interpretation as BP was considered Best of the Lot for many years for funds that desired petrochemical exposure.

Let’s take a look at some of the academic studies that have touched upon the issue of the factors of SRI performance:

• Moskowitz Award winner, John Guerard, Jr., director of quantitative research at Vantage Global Advisors, examined the returns of Vantage’s 1,300 stock unscreened stock universe and a 950 screened universe (The screens eliminated companies that failed to pass alcohol, gambling, tobacco, environmental, military, and nuclear power). He found “that there is no significant difference between the average monthly returns of the screened and unscreened universes during the 1987-1994 period. The “unscreened 1,300 stock universe produced a 1.068 percent average monthly return during the January 1987-December 1994 period, such that a $1.00 investment grew to $2.77. A corresponding investment in the socially-screened universe would have grown to $2.74, representing a 1.057 percent average monthly return. There is no statistically significant difference in the respective returns series, and more important, there is no economically meaningful difference in the return differential.”

Guerard’s conclusions are reinforced by other works:

• “Socially Responsible Investment: Is it profitable” Dhrymes, Columbia University July 1997 June 1998.

Dyrymes concluded that: “that by and large the Concerns and Strengths of the KLD index of social responsibility are not consistently significant in determining annual rates of return.”

• Socially Responsible Investment Screening Strong Empirical Evidence For Actively Managed Value Portfolios. June 2001, revised December 2001 Stone, Guerard, Gultekin, Adams.
• “No Significant Cost” means no statistically significant difference in risk adjusted return”. In addition, they surmise that “the conclusion of no significant cost/benefit is not just a long term average. It has remarkable short term consistency!”

In my opinion this report presents a balanced view in that they concluded that the during the time of the study 1984-1997 the stock market rewarded the growth oriented style and that the performance of SRI investments could become “brittle” if markets were to become risk averse and adopt a more Value oriented style……….a remarkably accurate presumption!

Could the performance of SRI funds which have exceeded or lagged their respective benchmarks be in part due to size (average capitalization from micro cap to large cap) and style (Value or Growth)?

Fama and French of Dartmouth University examined the annual rate of return and beta (volatility) of an unscreened universe of Growth vs. Value from 1928 to 2009 by dividing stocks into ten deciles (groups) based on book-to-market value, rebalanced annually and found that Value had the lower risk while Growth had the higher risk. In addition, they found that the highest book –to-market stocks exceeded the return of the lowest book-to-market by 21% to 8% on average. Stock valuation was a significant factor in the Fama and French study where the cheaper the equity valuation the better the return.

Market Cap size was important in the Fama and French study as well (1992). Market cap size showed a significant edge to small and micro cap equities on a monthly basis. *Monthly returns for the smallest 10% of equities were 1.47% versus 0.89% for the largest decile.

It is our contention that there are attributes that could account for performance to equities other than social profiles and that concurrently a portfolio of socially screened equities with the highest book-to-value ratios could exceed comparative benchmarks largely due to valuation metrics and capitalization size. In a case of pure cherry picking the monthly rate of return smallest market cap and lowest book value to market price was 1.63% versus 0.93% monthly for largest market cap and highest book value to market price.

I tested this theory using data supplied by the Social Investment Forum and Russell Index regarding the 10 year average rate of return for socially responsible mutual funds versus their respective benchmarks, and trends do emerge.

Data as of June 30, 2010

Benchmarks

• Russell Mid Cap Value Index was the top 10 year performer +7.55%.
• Russell Mid Cap Growth Index returned -1.99%.
• Russell 2000 Value returned +7.48%
• Russell 2000 Growth Index returned -0.92%

Equity Large Cap performance (information provided by SIF)

4 mutual funds show positive 10-year average annual rates of return:

• Calvert Social Investment Equity +0.14% (Growth)
• Neuberger Berman Socially Responsive +3.18% (Value)
• Walden Social Equity +1.46% (Value)
• Parnassus Equity Income +4.65% (Value)

Equity Small Cap performance
2 mutual funds from one mutual fund company showed a positive 10-year rate of return.

• Ariel Appreciation +6.16% (Value)
• Ariel Fund +5.62% (Value)

Disclaimer: While the sample size of SRI fund performance is very small, I gleaned data from only the profitable SRI funds for the last 10 years. The SIF forum does not show fund performance information for funds that have closed, merged or liquidated. It would be a safe presumption IMO that funds that no longer exist were weak performers since money will flock to where it’s treated best. Plus, hedge fund performance data was not available on the SIF site.

The results do fall in line with substantial academic works (Fama and French, Lakonishok) and it is possible that SRI performance should be viewed thru the lens of Value/Growth and Market Cap size.

A logical question that must be asked upon reading this might be: “If small market cap and low valuations are the sweet spot for investing, then why are there so few funds or managers focusing on this strategy?” Not to be obvious…………ok, well lets be obvious: The small cap / low price to BV tends to be the focus of many private portfolio managers since our small size allows us the dexterity to invest in companies that are simply too small for billion dollar mutual funds. Successful funds tend to outgrow the size/valuation strategy espoused by Graham as assets become larger and the investment selection becomes narrower. But this topic should best be explored at a later date.

Disclosure: No Holdings Mentioned

*Monthly returns for Value and Glamour portfolios by Market Cap Categories July 1963-December 1990 Fama and French.

Be sure to check our blog at www.greeninvestment.com/blog which is updated frequently.

Jefferies new solar research team sees optimism in the sector though, but geographically biased. Their greatest optimism is for Chinese solar companies, with 3 Buys and two Holds. For American based solar companies, the underlying theme to the new coverage seems to be that there will be a better entry point ahead.

Jefferies breakdown:

Disclosure: None

All the while, opponents to an energy bill promising commitments for alt energy, clean tech and putting a price tag on pollution have gained ground, promising to thwart any version of a bill that threatened higher energy prices and American jobs. After all, that is how they have framed the debate, while Obama and other advocates have stood by letting them have it their way.

At this point, it looks less likely that any energy bill is going to make it. Not even the worst environmental disaster in U.S. history, which should be an indictment on offshore oil drilling, and make us all think twice about mountain top mining as well as nuclear storage issues, has buoyed Obama et. al.’s agenda. Clearly, Obama is feeling the pressure.

This week, reports surfaced that Obama is making another concession. White House Chief of Staff Rahm Emanuel has gone on record signaling that the Obama administration will now propose caps on the utility sector this week, and utilities only – never mind other polluters. The thinking here is that this would give an energy bill a better chance to get through a more-partisan-than-ever Congress. Did we say this is depressing? With this much of a lack of conviction, why should opponents agree to even a utility-only cap? Why not hold out for no caps at all?

Meanwhile, a federal judge in the U.S. Eastern District Court of Louisiana struck down the Obama administration’s six-month ban on deepwater oil drilling in the Gulf of Mexico as rash and heavy-handed Tuesday, saying the government simply assumed that because one rig exploded, the others pose an imminent danger, too. If the Obama administration had its act together, it would have made a better case.

It gets worse. In California, which is generally speaking a proxy for where clean energy legislation is heading across the nation, the oil industry-backed measure to suspend AB 32, which sets a limit on GHGs from automobiles, oil, refineries and other industry, requiring up to a third of the state’s electricity to come from renewable sources by 2020 and would drive increased sales of fuel-efficient cars,, has qualified for the November ballot.

On the oil industry’s side – Meg Whitman – who is gaining momentum politically in the race to California’s governorship. On the side of AB 32, and the advocacy to reduce emissions, is Governor Schwarzenegger,  who is on his way out under heavy criticism over the state of fiscal disrepair in California.

Opponents to AB 32 have smartly positioned the legislation as being anti-jobs, and as a ‘tax’ on energy which will make life harder on consumers, or at least more expensive. This is a mirror image of the debate being held on the national level, and as with that debate, supporters of AB 32 are totally failing to show the costs of higher emissions and effectively counter the argument that reducing emissions will result in job losses. Did we mention this is all depressing?

Why the pessimism for this electric car stock? First, Tesla has yet to turn a profit. In the first quarter 2010, sales were $21 million, showing virtually no gain over the first quarter of 2009, while operating expenses doubled to $30 million.

The company has sold only 1,063 of its Roadster models as of March 31, since production began in 2008. Even for a car that costs over $100,000, that’s not much penetration into the market.

With these less than stellar sales, long term IPO investors will be pinning their hopes on the new Model S, a $50,000 sedan due to begin production in 2012.  However, as Tesla reports in its prospectus:

We have no operating history with respect to the Model S electric vehicle and have only recently begun the component procurement process for the Model S, which limits our ability to accurately forecast the cost of the vehicle. In addition, we have not yet completed the site selection process for the location of our manufacturing facility to produce such vehicles, finalized the design or completed our engineering, manufacturing or component supply plans for the Model S.

All this in two years. Electric car enthusiasts who have waited breathlessly for other new designs know that this timetable is hopeful at best. The Aptera electric car, designed in southern California was originally due out in 2009, and buyers with deposits down are still waiting.

Even if Tesla is able to finish the design and start production by 2012, Nissan’s Leaf and Chevy’s Volt will have been selling for nearly two years. And more competition is on the way from big automakers, with Audi, Volkswagen, Ford and others designing electric and hybrid cars. With Tesla’s distribution coming only from online sales and a handful of stores, competing with traditional car companies may prove impossible.

So what is driving the Tesla hype? What are the positives to the story? One answer is that founder Elon Musk, of Paypal fame and Silicon Valley insider, has done a good job to promote his sexy Roadster into the best known brand of the electric cars. It’s also been widely reported that Musk himself is out of cash, fueling speculation on the timing and need for an IPO. Musk will sell about 2.2 million of the shares and could make about $21 million assuming the shares sell at the midpoint target range of $15.

But Musk also has an array of big name investors including Google, Daimler, and now Toyota (TM) backing his venture. Even the US government is behind the company with a $465 million Department of Energy loan to retool the new factory and build the Model S.

After the IPO Tesla will sell $50 million shares at the offering price to Toyota as part of a recent agreement. The companies have announced that they will work together on an electric car, although no official announcements have been made. The agreement also included a manufacturing factory in Fremont, California, which Tesla bought for $42 million, which it will use to build the Model S.

And with 2,200 people who have made refundable deposits of at least $5,000 to reserve an S, the car may find buyers. The question is: will Tesla and its investors survive the bridge between now and the S rolling off the production line?

Finally, as far as playing the IPO for a quick ride, consider the last automotive IPO in the sector that debuted with this kind of hype and no profits – lithium battery company A123 Systems (AONE). With an IPO price of $13.50 it reached just over $25 in the days to follow – but has since plummeted to under $10. Such a ride for Tesla doesn’t seem implausible, and investors should play this stock accordingly.

Disclosure: None

One big advantage of geothermal over the solar and wind industries, is that geothermal energy doesn’t rely much on government subsidies or tax credits. In addition, geothermal plants run 24/7, all day and all night, whether the sun is shining or not and whether the wind is blowing or not.

Ormat Technologies Inc. (ORA) a Nevada based company, which trades on the New York Stock Exchange, was founded in 1965. It owns and operates geothermal power plants, selling electricity in the United States, Guatemala, Kenya, Nicaragua, and the Philippines. They also provide products and services to other geothermal power generators. The forward P/E is 23, the PEG is 2.15, and the yield is 0.7%.

Calpine Corporation (CPN) was originally founded in 1984. This Houston, Texas based company provides electricity in the United States and Canada through the ownership and operation of its own power generation plants, through geothermal and natural gas. The company went through bankruptcy and came out of it, now traded back on the New York Stock Exchange. The stock has a forward PE of 33.5 with a PEG ratio of 4.13.

Nevada Geothermal Power, Inc. (NGLPF.OB) is a company that explores for and develops geothermal projects in the United States to provide electrical power. They own a 100% leasehold interest in the Blue Mountain, Pumpernickel, Black Warrior projects in Nevada and the Crump Geyser Project in southern Oregon.

Raser Technologies (RZ) which is a Utah based company that trades on the New York Stock Exchange, and founded in 2003, is an environmental energy technology company, which develops geothermal power. The company has a portfolio of geothermal interests in Utah, Nevada, New Mexico, Oregon and Indonesia which generates seven megawatts of power. The company recently generated negative earnings.

Sierra Geothermal Power Corp (SRAGF.PK) is a developer of renewable power from geothermal sources. They have investments in 15 geothermal projects located in Nevada and California. This is a very low cap stock and should be considered very speculative.

US Geothermal Inc. (HTM) which is a Boise based company, founded in 2002, is involved in the development of geothermal energy power plants in the Raft River area of Idaho, the Neal Hot Springs area located in eastern Oregon, and interests in an operating geothermal power plant and geothermal energy leases in Nevada. Earnings for the latest reported quarter were negative.

Constellation Energy Group (CEG) is an electrical generating company that owns and operates generating plants and fuel processing facilities utilizing various types of fuel including nuclear, coal, natural gas, oil, solar, geothermal, hydro and biomass. The forward P/E is 10.3 and the PEG is 1.1. The company pays a yield of 2.7%. Geothermal is a very small part of the company’s business.

IdaCorp, Inc. (IDA) is a holding company which owns Idaho Power Company, which is involved in the generation, transmission, distribution, and sale of electric energy primarily in southern Idaho and eastern Oregon. Their electrical generation comes from hydroelectric, natural gas, diesel, coal, and geothermal plants. The forward P/E is 11.4 and the PEG is 2.68. The stock yields 3.7%. Geothermal is a very small part of the company’s business.

PG&E Corp. (PCG) is a California-based electric and gas utility that serves 5 million customers. Their electrical generation comes from natural gas, nuclear, hydro, coal, geothermal, wind, and several other types of renewable sources. The P/E is 11 and the PEG is 1.76. The stock yields 4.4%. Geothermal is a very small part of the company’s business.

For a list of electric utilities, natural gas utilities, or water utilities, go to WallSteetNewsNetwork.com.

Author does not own any of the above.

By Stockerblog.com.

However, as the S&P 500 rose over 26% during the past 18 months, alternative energy indexes are down more than 6%, pointing to a number of other factors that investors need to consider.

Greek Credit Crisis: Global issues affecting alternative energy stock performance include: the Euro weakening, the Greek credit crisis, utilities have been out of favor the last 6 months and subsidy cuts in German and Italy.

As reported by Bloomberg’s May 20 post, clean energy companies have been hurt by the European economy recently because few wind, solar, and other green power installations would be profitable without subsidies, and as governments across Europe curb spending in response to the Greek crisis, those funds are being cut back.

This overseas decline is not isolated of course, as companies based outside of Europe feel the pain in dealing with the falling value of the euro. Profits for North American companies selling their products into Europe declined as the currency fell 14 percent against the dollar this year.

Opportunities: Companies with European suppliers may have the advantage of reduced production costs at this point, and maintaining accounts in strengthening currencies such as the renminbi can also add to a company’s balance sheet.

Shrinking Solar Profit Margins: Over a year ago we looked at declining polysilicon pricing and recognized that the easing supply constraints in the market for solar grade silicon would mean that PV supply was liable to increase rapidly.  This in turn would lead to increased competition from places like China and the failure of marginal producers who would have to find other ways to compete.  Despite tax credits meant to spur growth of this sector, higher-cost commodities and the continuation of tight credit has hindered the recovery of manufacturers in the alternative energy space.

Opportunities: The news is not all bad for the solar industry, however.  Suppliers of other parts of solar systems and services, such as installation, have seen volumes rise.  Those suppliers with pricing power are still able to maintain or even expand margins, even as their volumes expand, with a dramatic effect on profits.

Other solid investment candidates in the solar supply chain are solar installers, assemblers of solar modules, and suppliers of solar inverters.

Regulatory Blockage: Although the Obama administration has promised to move this country in a new direction toward clean energy independence, much of the President’s term has been spent doing other stuff (little things like dealing with the worst financial crisis in 80 years, passing the largest health care reform in history, and now the biggest oil spill in U.S. history… no big deal).

Opportunities: The American Recovery and Reinvestment Act included more than $80 billion in clean energy investments. In addition, given the eminent regulations over emissions, companies utilizing scalable technologies for electric and natural gas vehicles effective in reducing emissions, offer potentially good buys.  Specifically, companies in both Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) look especially promising.

Why not consider the Electric Vehicle (EV)?  Well, considering that a plug-in electric, unless plugging into a clean energy source, is still pulling energy from a fossil fuel grid. It is a technology that needs developed solar, wind and/or geothermal in order to achieve significant CO2 reduction. In contrast, CNG can be a bridge technology until solar and wind become dominant energy sources.

Keep a Long-Term Perspective: The best practice when investing in new technologies is to invest for at least 5-7 years. Returns in a given month, quarter or even year need to be seen in the light of the longer-term, and even more so in aggressive portfolios.

In the short-term, it seems the amount of oil spilled in the Gulf of Mexico is not large enough of a percentage of global oil supply to cause oil prices to immediately rise.  However, the likelihood of increased regulation for off-shore drilling could cause oil prices to climb in coming years.  How changing oil prices affect the success of alternative energy stocks is debatable, however we can probably all agree that the BP mess is certainly a motivating event to consider how we might support a cleaner future with our investment dollars.

Much of the blame has been put on BP in their negligence for violating safety and back-up protection devices of their deep-water well in the Gulf.

Instead of placing blame on BP, maybe we should take a look at the root cause of our dependence on oil.

BP is simply trying to keep up with the insatiable appetite for oil that U.S. consumers demand.  Maybe the solution to the problem is to reevaluate whether we should continue down the same path of oil-based energy dependence or consider other renewable energy alternatives.

It is not an overnight solution, but course of action has to begin at some point.  Like weaning an addict off drugs – it takes time, the process is slow and gradual, but change has to begin somewhere.

One way to begin the process is to put money into the alternative energy sector.  For those investors with time to make their money grow, consider putting a fraction of your IRA into an alternative energy mutual fund.

A couple green mutual funds to consider are the Winslow Green Growth Fund (WGGFX) up 66.58% for the 1-yr  period, or the Green Century Equity Fund (GCEQX) with a 1-yr return of 51.27%.  If the solar sector appeals to you, consider the Van Eck Market/Vectors Solar Energy ETF (KWT), or the Claymore/MAC Global Solar Energy ETF (TAN).

If you think the future is wind power then consider PowerShares Global Wind Energy Portfolio ETF (PWND) or the First Trust ISE Global Wind Energy Index ETF (FAN).

Keep in mind the companies in these funds and ETF’s are speculative, and advisors in the sector tell clients to only put money here that you do not need in the next 5-10 years.

Has the Gulf incident and its costs and lingering effects, the images of oil washing up on beaches, wetlands destroyed, and ecosystems ruined, enough to reach the “tipping point?” Have our elected officials woken up and finally decided to move policy in a more sustainable direction?

Disclosure: none