Washington, D.C. — Iowa’s wind industry could get a jolt from an economic stimulus package being put together by House Democrats.

The legislation will include a long-term extension of tax credit that subsidizes the power from new wind farms, congressional aides and industry officials said Friday. The tax credit applies for a project’s first 10 years. However, future projects won’t be eligible for the subsidy unless it is renewed beyond this year.

Even the tax credit hasn’t been enough to get some projects going during the recent economic downturn because their potential investors don’t owe enough in taxes to use a credit, industry officials say.

So the stimulus package would create an alternative way to fund projects: Companies could instead get a grant directly from the government for 30 percent the project’s cost.

“Anything that assists with the financing of a wind farm project such as this would be very, very attractive to the industry,” Harold Prior, president of the Iowa Wind Energy Association.

He said the subsidies would aid not only wind projects within Iowa but also the state’s growing number of manufacturers of parts for turbines.

President-elect Barack Obama wants to use the stimulus package to double the production of renewable energy production and increase energy conservation. “The need for this action has never been more urgent,” he said during a visit Friday to a plant in Ohio that makes bolts for wind turbines.

The energy measures also are seen as a first step in the incoming administration’s plan for reducing greenhouse gas emissions.

Missing from the stimulus package are policy changes to deal with another major barrier to the industry’s growth — a lack of long-distance transmission lines for carrying power from Iowa wind farms to urban centers out of state.

Those measures will have to wait for later legislation, said Greg Wetstone, senior director of governmental and public affairs for the American Wind Energy Association.

The stimulus bill also is expected to offer little to the ethanol industry despite its existing financial struggles. However, the House measure is expected to include an expansion of a tax credit for service stations that sell E85, a mixture of 85 percent ethanol and 15 percent gasoline.

The subsidy cap would likely be raised from 30 percent to 50 percent of the cost of the equipment, up to a limit of $50,000, said Phillip Lampert, executive director of the National Ethanol Vehicle Coalition.

President elect Obama is going to be sworn in on Tuesday and green stocks and especially wind stocks are going to be front and center after Obama speaks about green energy.    AMSC and Vestas (VWDRY) are going to be the primary recipient of these new revenues.   Vestas is expanding in Colorado by building five new plants,  two in Windsor, Co, two in Brighton (near Denver) and one in Pueblo.   Reasons for picking Colorado are main rail lines intersect in Denver, and the rocky mountain region is going to have alot of future wind farms in Texas, Wyoming, Montana, South Dakota, Iowa, and other western states.  Shipping and transportation/delivery add into the equation picking Colorado.

AMSC and Vestas are both “”"Accumulate”’ in my book for the long run and both companies have an added bonus in China wind  where AMSC supplies six Chinese companies with wind components and has also recently won a contract to upgrade the grid system in China.   Vestas has won 8 new wind contracts in China and when you google “”Vestas”’, you will find hundreds of contracts and stories.

AMSC- American Superconductor

Vestas – VWDRY

good comments about APWR on Seeking Alpha, good overview

A-Power Energy (APWR), Chinese Utility: The Chinese utility company has formed a very supportive bottom on the charts and trades only 4x next year’s earnings. With expansion expected in China utilities and A-Power also having a major presence in wind-power energy, shares have the potential to soar in coming years as real earnings begin to flow in. Shares trade 2.85x cash and the company has no debt, and the recent joint venture with General Electric gives the company more clout.

For 2009, there are only a few things I am totally convinced will happen.  Stock markets will be crazy as 2008 has shown, people will try and catch rising tides, and Obama is going to deliver green energy trying to put green jobs making green energy.  Other than that, I have ZERO idea what will happen in the world.   Oil prices, flip a coin.  Dow Jones average for 2009??? Better odds in Vegas.   Wind energy will continue to grow worldwide is one thing I have a high probability of actually delivering.

It is clear now that the new administration will do the following three things right after January 20th:

1. Install solar panels/vinyl on all government/military buildings. The companies who can provide products are Suntech Power (STP), Energy Conversion Devices (ENER), Sunpower (SPWRA), First Solar (FSLR), Evergreen Solar (ESLR), JA Solar (JASO), and Canadian Solar (CSIQ). Based on the U.S. Department of Energy is leading The Solar America Initiative (SAI). By 2015 SAI will provide 5-10 GW of new electric capacity from decentralized sources of clean power to the electric grid in the United States, SAI will also boost our economy by promoting a U.S. based solar industry. With new administration takes office in Jan., we will see this program kickoff quickly. Companies who have domestic production should benefit, including FSLR, STP SPWR, ENER.
2. Modernize our electricity grid. Obama wants to run the country’s economy on renewable energies, such as solar and wind. The problem is that the existing power grid is too out of date to transport new energy across the nation. Steven Chu’s expertise is a great fit here. He has long been promoting new power grid to carry electricity from one part of the nation the other. Companies such as American Superconductor (AMSC) can provide next generation power grid system – a secure super grid technology. More details can be found on the company website.
3. Promote wind energy. Wind energy has been proven cheaper than solar and has achieved grid parity to some extent. Many companies are developing wind turbines or parts for wind energy market, including Trinity (TRN), American Superconductor, and Vestas (VWDRY.PK).