4 Ways to Profit from the Coming Boom in Alternative Energy

Love is a fickle thing. When oil prices surged past $100 a barrel in 2008, investors fell madly in love with alternative energy stocks. But when oil prices crashed, and when signs emerged that government budget problems would curtail the industry-friendly subsidies, so did investor ardor for this young industry. The PowerShares Wilderhill Clean Energy Exchange Traded Fund (NYSE: PBW) slid from $28 in early 2008 to below $10 today.

These ups and downs are par for the course in any young industry. Sales initially soar, then the key companies raise loads of cash to aggressively boost capacity -- often times to a point where supply exceeds demand. Prices for items -- such as solar panels and wind turbines in this case -- then plunge, leading investors to assume that profits will never be robust.

But it usually just takes time. Eventually, the industry learns to keep capacity expansion at a minimum, demand keeps rising, and prices eventually firm. And that’s just what looks to be happening in the field of alternative energy.

Labels: Alternative Energy, ETF, FSLR, PBW, Solar Stocks

posted by Ertai at 2:47 PM