In his proposed stimulus package, Barack Obama is including some love for the wind sector.
Jefferies backs its "buy" ratings on European wind giants Gamesa and Vestas thanks to the inclusion of a multi-year extension of the production tax credits, plus some means of making such credits "refundable." It's not clear exactly how the plan would work, but the end result of a "refundable" credit scheme could be more expansion for the wind industry as the cost of reselling tax credits to investors would improve.
The wind sector has been hit hard by the credit crunch, with shares of ETFs like the First Trust Global Wind Energy (FAN) and PowerShares Global Wind Energy (PWND) falling by more than half in the last year. The credit change won't solve lending worries for the sector, but along with the possibility of increased investment (possibly some $10 billion to $20 billion from the proposed National Clean Energy Lending Authority, Jefferies says) the sector could be in for at least a bit of a thaw.
Jefferies says: "Clearly it is very early stages and final improvements/alterations to the wind incentive program in the US must still get through Congress and the Senate. However, we are increasingly optimistic as the incoming Obama administration seems to be re-affirming its campaign commitment to renewable energy."