What Should You Do With Solar, Wind & Geothermal Stocks If Congress Does Not Renew Their Tax Credits?
Submitted by EnergyTechStocks.com
When Goldman Sachs, JP Morgan and other well-connected investment banking firms need to advise their billionaire private banking clients what to do in the area of renewable energy, they probably turn to someone like EnergyTechStocks.com’s “Washington Insider.”
So we asked our inside man what he thinks investors should do in the event Congress does not renew the tax credits for the solar, wind and geothermal power industries, which seems increasingly likely. Advocates of these green energy industries are becoming apoplectic that the tax subsidies being counted on to drive solar, wind and geothermal to commercial viability could be lost, costing thousands of jobs and sending companies in these areas into a tailspin.
But is the situation really that dire?
Our Washington Insider, who, as usual, spoke to us on the condition of anonymity, said that should Congress fail to act, he wouldn’t be in a rush to sell companies in any of these three energy sub sectors. In fact, he said geothermal companies would still be a “buy,” although probably a “weak buy,” because geothermal prospects are located mostly in Western states that have strong statewide tax incentives.
He said that solar stocks would be “a hold for now” because, even without U.S. tax subsidies, “the market is still very strong worldwide.” However, he indicated that investors might want to prune their portfolios, getting rid of any companies heavily dependent on the U.S. market.
His most negative investment opinion was reserved for wind power stocks. He said that with the U.S. market the fastest-growing wind power market in the world, and with wind developers heavily dependent on the production tax credit, he might be quick to sell if it looked like wind power tax subsidies weren’t going to be renewed. (Since wind power stocks generally haven’t reacted much to the possible loss of U.S. tax incentives, another possible way to go might be to sell now with the intention to buy back when prices fall as the subsidy ends.)
