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What is the next hottest government program now that "cash for clunkers" is over? Yup, you guessed it. It's wind farms.
According to the Wall Street Journal (subscription required), the government is starting a new program to subsidize the production of wind farms all over the country. Under the program, the government will rebate 30% of the cost of building a renewable energy facility, awarded 60 days after the application is approved. The Energy and Treasury Departments expect to spend $3 billion initially. Some people believe, however, that applications could grow to $10 billion. This new program started July 31.
Unlike the old program that gave 10-year tax credits for profitable operations, this program is a direct, upfront payment. Previous programs fell apart when the financial meltdown occurred last year. Profits turned to losses and stocks tumbled.
Who are the big players in this new game? Morgan Stanley (NYSE: MS) and Citigroup Inc. (NYSE: C) are each investing $100 million to finance separate wind farm projects. General Electric Co. (NYSE: GE) has been a player in the past and will continue to finance wind farm projects.
The program should jump start manufacturers also. Those who would benefit include Vestas Wind Systems (OTC: VWSYF) and First Solar Inc. (NASDAQ: FSLR).
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