Here in Baltimore, we know a thing or two about artificial power. 17 current and former players on the Orioles baseball team were named in the big Mitchell Report issued last week for using performance-enhancing drugs. But the economy's been juiced up too, on sub-prime steroids that caused a cancer in the markets.

Luckily for us baseball fans (not just in America--Cuba and Japan are tops in the world these days), and for us investors, there is still plenty of pure power out there.

In its recent "Renewable Energy Attractiveness" report, accounting firm Ernst & Young's UK-based Renewable Energy Group breaks down the potential for renewable energy stocks and index funds to crush market averages.

With the sub-prime subterfuge of the past few years now hitting the fan, markets have been shaky and access to project funding in just about every industry is threatened by the choke in credit markets.

"Paradoxically," report author Jonathan Johns says, "the sub-prime credit crisis could well reinforce the growing appreciation of renewables as the hot investment sector with real cash flows and strong long-term growth prospects"(emphasis mine).

Mr. Johns isn't talking about some pie-in-the-sky market for renewable energy. He's talking about the fast-paced policy changes and Peak Oil realities already driving solar, wind, biomass, and other fuel sources to the fore.

Just take a look at this chart of the PowerShares WilderHill Clean Energy ETF (AMEX:PBW) compared to the Dow. Despite this year's market woes, PBW has outperformed the blue chips by 733%!

And there's more to come, because Washington is finally in it to win it, instead of letting state capitals boost our national numbers in studies like E&Y's Renewable Energy Attractiveness Index.

Renewable Energy Steroid Statistics

You see, just as with Barry Bonds, Mark McGwire, and maybe even Roger Clemens, lofty American renewable energy stats need an asterisk next to them.

As of the third quarter of this year, Uncle Sam seems to be in pretty good shape. The U.S. leads E&Y's All Renewables Index's wind, solar, and infrastructure categories.

But added to the list, two asterisks indicate that our national ranking "indicates U.S. states with Renewable Portfolio Standards and favorable renewable energy regimes."

The federal government has moved at a snail's pace with legislation . . . until now.

Energy efficiency is the first step, with final approval given on Tuesday to a major energy bill that will phase out 100-watt incandescent lightbulbs by 2012 and improve household appliance energy use.

Automotive fuel efficiency mandates will rise by 40% for new cars and light trucks by 2020, and 36 billion gallons of biofuels such as ethanol are to be added to the national gasoline supply by two years after that.

Nevertheless, we haven't seen a national "25 by 25" law, which was a key factor in the Ernst & Young aggregate ranking of American states. At the state level in places like Ohio and Illinois, 25% of each state's power must be derived from renewable sources by 2025, and that's a law.

In October the House of Representatives did pass a "sense of Congress" resolution echoing the 25x25 plans, but having worked in those hallowed halls I can tell you how many platitudes are exchanged on paper every day that do nothing to affect policy.

Fortunately, this is still a country where ideas attract investment. What's more, need creates ideas, and the world is in dire straits when it comes to future energy questions.

As you wonder when we'll hit the bottom of the mortgage mess, take a minute to check out the actual fact of renewable energy investment returns. The rewards are consistent and there is a wide range of companies to choose from in this competitive and vibrant market.

Internationally, the spectrum is even more appealing, as global green investments give you portfolio exposure to booming emerging economies like China and Brazil (both renewable energy hotbeds), as well as the domestic sustainable power scene.

Jeff Siegel and I have just launched Green Chip International, which is currently only available to Green Alliance subscribers. To learn more, visit http://www.angelnexus.com/o/web/3352 and keep reading Energy and Capital for updates.

Regards,

Sam Hopkins

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Good article, I wonder what will happen with the renewable fervor when conventional fuel prices return to a sanity level. The problem with renewable energy is that it is not 100% reliable. For the forseeable future we need conventional fuels. At some point (however I'm not predicting when) conventional prices will return to a level of sanity. Remember the oil situation prior to and after the 1985-1986 period? Market forces dropped prices, what a laugh. Political pressure and arm twisting dropped prices then and will do the same again. There is nothing new under the sun, what goes around comes around again and again and again.

While geo heat pumps seem a great idea, they can be misapplied enormously, and are very dependent on ground water temperature, well type, soil type, and heating load of the home. An open well with too cold water, common in the northeast, hardly works at all, and try to repair a contaminated/clogged or leaking heat exchanger. While some problems can be related to the installation, many can be blamed on the rose colored glasses that are used to view this potential. and if you can design a house that only needs 30,000 btu/hr to heat, why do you need $30K worth of equipment to do it? And if it doesn't need that little heat, you will use the electric backup a lot! Spend the money on a better insulated shell, and less on mechancial equipment, (and I'm a former mechanical contractor).

And invest in free fuel that does work: solar, as the equipment is simpler, AFTER the conservation savings are maximized.

Happy holidays.

I think they go thogather now how suply the oil and how is in control of the climat well if aneyone can anser this we dont have to bother when and were we go because we are not in charge intarly and we dont live forever.

Special financial support is available for persons installing solar voltaics which work while the sun shines. Likewise financial support is available for installing windmills which work while the wind blows. But there is no support for the homeowner that wants to install geothermal heat pumps which operate day and night, wether the wind blows or not, and which provide a constant 54 degree temperature summer and winter. This geothermal energy is available almost everywhere. Recirulating water from plastic pipes in wells or trenches (about eight feet deep)capture this energy. Heating it about 20 degrees provides summer cooling and winter warmth. Seems a shame we cannot support a renewable resource that is literally right under our feet.