On July 17 in Washington, D.C., former Vice-President Al Gore gave a speech urging Americans to create a plan to shift America’s energy focus away from fossil fuels to other forms of energy, such as solar, wind and geothermal. He called for America to free itself completely from fossil fuels within 10 years.

In order to implement such a plan, it would mean much more investment in solar and wind technologies and major structural changes such as every American driving an electric car.

Without getting into the pros and cons of such a plan, or whether or not it is feasible in a 10-year period, as an investor, another question looms.

What if Al Gore’s Plan Comes True?

Clearly, investing in fossil fuel energy companies will no longer be the lucrative play it has been for the past 100 years. Other technologies will replace that source of energy.

Even before Mr. Gore laid out his goal, alternative energy companies were busy creating new energy sources.

Wind Power

A-Power Energy Generation Systems, Ltd. (APWR), headquartered in China, is the largest provider of distributed power generation systems, including wind systems, in China.

On July 14, the company entered into an agreement with the Bayan Nur city government in the western Inner Mongolia Autonomous Region to build a 290,000 square foot wind turbine production facility to produce 800MW of wind turbines a year.

A-Power, a Zack’s #1 Rank (Strong Buy), is already making money. In 2007, the company had earnings per share of $1.78 per share. Analysts estimate $1.15 for 2008 and $1.47 in 2009.

Learn more about A-Power in the Zacks Equity Research July 14, 2008 Snapshot.

Geothermal Power

Ormat Technologies Inc. (ORA) is the third largest geothermal power producer in the United States and has over a 10% share of the installed geothermal power capacity worldwide.

In the United States, Ormat runs 7 geothermal power plants and has additional plants in Guatemala, Kenya, and Nicaragua.

Ormat is also a Zacks #1 Rank (Strong Buy), and it too is profitable. The company made 65 cents a share in 2007. Analysts see strong future growth, calling for 2008 earnings growth of 74% to $1.13 per share and, in 2009, forecast a further 58% gain to $1.78 per share. The company currently has a forward P/E of 45.13.

Learn more about Ormat in the Zacks Equity Research July 14, 2008 Snapshot.

Solar Power

The solar “story” is no longer a secret. Investors have been pouring into the sector for the last several years.

Canadian Solar Inc. (CSIQ) is one of the many solar companies now competing in the industry. CSQI manufactures photovaoltaic cells, modules and custom-designed solar power applications for solar power generation systems. The company has three manufacturing facilities in China.

Zacks Research recently rated Canadian Solar a “Buy” in a July 15, 2008 analyst report:

“CSIQ’s recent bullishness has been boosted due to improving company fundamentals and a steep rise in the price of oil,” said Jon Kolb, Zacks Equity Analyst.

“Going forward, on the back of solar panel sales growth in various global markets, extension of product lines, material cost savings through the company’s more vertically-integrated production structure, higher captive generation of solar cells, long term supply agreements and a silicon reclamation program should, collectively, generate significant earnings growth,” he said.

Canadian Solar is a Zack’s #1 Rank (Strong Buy.) Analysts estimate 2008 earnings at $1.95 per share and project 58% year-over-year growth in 2009 to $3.09 per share. The company has a forward P/E of 16.2.

What if Al Gore’s Plan is Wrong?

Even if a bold alternative fuel energy plan isn’t enacted, these three companies, and others in the sector, show that investment and growth is already apparent in the renewable and alternative energy industry. These companies are making money and demand for alternative energy technologies should only increase in the future.

Posted in Categories: Contributor, External Research, Stocks.

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