Cleantech can count on continued support from the Obama Administration, but Congress's ability to pass legislation may be substantially weaker after the November elections. Polls indicate that Democratic majorities may be lost in House and weakened in the Senate. This would severely damage prospects for a Renewable Portfolio Standard (RPS) and extensions of key subsidy programs.
Programs with the most election exposure include:
Programs with the least election exposure include:
Passing cap and trade appears impossible; RPS and subsidy extensions depend on election results and willingness of Democrats to embrace nuclear and natural gas. An energy debate is likely in 2011 because Congress needs a response to the Gulf oil spill and prospects for lame duck legislation are very poor. However, given that the Senate was unable to swallow cap and trade in 2010 with a 59 seat majority, we believe it may be impossible to do so after the election. In our view, RPS may be achievable if Democrats maintain a slim majority in both chambers and are willing to include a role for nuclear energy. Extending other cleantech subsidies will require further compromises with Republicans on natural gas and offshore drilling. We note that such cooperation would be a radical shift from the present environment.
We look for the Administration to rely heavily on federal agencies in 2011.
Despite the negative outlook for new legislative support, we expect continued growth in the US renewable energy and energy efficiency market fueled by decreasing costs, public awareness, existing government incentives, and strong natural resources.
[Editor's note: to hear Robert explain this and other potential clean energy legislative developments, play the video below.]
Robert Lahey is a Vice President in the Investment Banking division of Ardour Capital Investments, LLC , and can be reached at firstname.lastname@example.org. Founded in 2002, Ardour Capital is the leading research and investment-banking firm exclusively focused on energy technology, alternative energy and power, and clean & renewable technologies. Ardour Capital publishes in-depth company coverage and industry specific research, and offers a full range of corporate finance, investment banking and capital market services. Robert holds a BBA from George Washington University, a JD from New York Law School, and an MBA from Fordham University.