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Obama's Act II: A New Deal For Clean Tech?

31 January 2013 in Trading Ideas

A presidential election always involves winners and losers, and one of the clear winners in 2012 was clean energy.

Clean energy has in recent years become something of a motherhood issue, one that no candidate or party actually opposes. But it’s widely believed that the goals of the Obama administration will be much more actively aligned with the interests of Cleantech Energy than it would have been under Republicans.

Some of this difference is rhetorical; it’s unlikely that Mitt Romney would have staked his administrative agenda on fighting climate change or developing new energy sources, the way President Obama did in his inaugural address.

But there are also scores of specific cleantech-friendly actions the Obama administration is expected to take. Alternative energy research is likely to be highlighted in the president’s budget; he is also expected to be supportive of the tax credits the new industry says it needs to become better established.

Obama can also order agencies of the federal government to support clean technologies in their procurement efforts; exactly that sort of push is expected soon at the Pentagon. This kind of early support by the federal government could eventually result in lower prices for civilian markets. How far this ambitious agenda can go remains to be seen.

There are a number of motifs with alternative energy themes. Cleantech Everywhere emphasizes companies in fields like wind and solar. And the Smart Grid motif includes companies with a business model working to make the U.S. electricity infrastructure more energy-efficient and reliable. More than half of the Smart Grid investments are in companies making “smart meters,” which can give residential utility customers greater insights into their energy consumption.

There’s one cleantech policy from the first Obama administration that isn’t likely to survive in the second term: Massive loan guarantees for late-stage companies. The hundreds of millions of dollars lent to the failed Solyndra became a hot-button issue during the presidential campaign, and the administration may want to avoid reminding taxpayers, or Congressional Republicans, that it ever took place.

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