The other day, my dad asked me, is there a way I could invest in the wind farms that are sprouting up all over rural Minnesota? I went to my local library to borrow a book called The Clean Tech Revolution by Ron Pernick and Clint Wilder. By the time I had finished chapter three, I had two stock ideas for him: Florida Power & Light and General Electric.

The concept of clean technology is not exactly a household term so let me explain. Clean technology refers to any products or services such as solar power systems, biodiesel fuels, desalination systems or hybrid electric vehicles that:

1. Harness renewable materials or reduce the use of natural resources

2. Reduce or eliminate pollution or toxic waste

3. Deliver superior performance compared with conventional offerings

4. Provide investors, companies, and customers with increased returns, reduced costs, and lower prices.

The revolution is being driven by six major factors described as costs, capital, competition, China, consumers and climate. Clean tech is about scaling up manufacturing and driving down costs. As the costs of fossil fuels keep skyrocketing, the costs of clean technology are coming down. The greatest cost of solar power is the photovoltaic panel; the greatest cost of wind power is the windmill.

Venture capitalist, Kleiner, Perkins, Caufield & Byers, is emerging as a strong advocate of clean technology with its $200 million Greentech investment fund. There are many index and exchange traded funds that have come public in the last two years.

China has a huge pollution problem created by a bloating population. The country is being forced to develop new water and energy infrastructure projects to sustain its population.

In India, over half of the nation's rural residents lack reliable access to electricity. The government has imposed a mandate of 2012 whereby all residents will have electricity, with half of this electricity being generated from renewable sources such as wind, solar, and biogas.

Sheryl Sostarich

"China has a huge pollution problem created by a bloating population. The country is being forced to develop new water and energy infrastructure projects to sustain its population."

I heard on the radio today that China's main source of energy is coal.  Soon, China will be using half of all of the coal used in energy production.  Add to that the fact that Chinese electrical plants aren't modern, and pollute like crazy.  If there's going to be progress in reducing greenhouse emissions, that place to concentrate effort is in China.  I've no idea how (or if) that's got a chance of happening ...

Every morning, I receive an update in my inbox from Money and Markets. I was drawn to an article published on March 18, 2008 by Tony Sagami titled "This Company Is Cleaning Up in China." Sagami writes, "while there are several culprits behind the pollution, including cars and factories, the biggest source of pollution [as Joe Craig also mentioned] is coal-fired power plants. I encourage you to read the article to learn more about Sagami's stock pick.

Sheryl Sostarich

Solar power is not for all regions but it does make sense in regions that have high utility costs, that offer solar subsidies, or that are situated where the sun does shine.

The total annual manufacturing output of all solar companies has grown from 300-MW in 2000 to more than 2,000-MW in 2006. That is enough generating capacity to serve two cities the size of Atlanta for an entire year.

Because of the nature of the solar business, investors should focus on the electronics giants namely, Sharp, Sanyo, or Cypress Semiconductor rather than the oil behemoths like Shell or British Petroleum. It is the companies that design integrated circuit, flat-panel and disk-drive technologies that will likely invent the next generation solar systems.

Capacity is not unlimited due to the tight supply of PV-grade silicon. Hemlock Semiconductor and Solar Grade Silicon have been boosting their capacity to try to keep up with the demand for the raw material.

Companies like Solaria in Fremont, California are working to drive down costs by replacing silicon with a cheaper concentrating layer. Solaria's products require no moving parts and have a form factor almost identical to today's flat solar panels.

Roofers and homebuilders in California are taking advantage of the state's Million Solar Roofs incentives as well as foreign tax credits. Entire housing projects are being built with PV-solar panels.

Enter companies like First Solar (NASDAQ: FSLR) that are developing alternative technologies to silicon. First Solar produces panels that use a thin layer of cadmium telluride to convert sunlight into electricity.

And don't count out the Chinese manufacturers that have listings on the New York Stock Exchange -- Suntech Power, Solarfun, LDK Solar, Trina Solar, and Yingli Green Energy.

Sheryl Sostarich 

Wind power is no longer an environmentalist's pipe dream. The global wind power industry has grown from $12 billion in 2005 to $18 billion in 2006 and is projected to grow to $61 billion by 2016.

It was November 2005 and it was the first time in the United States when more than 33,000 retail customers paid $10 a month less for electricity generated by wind than customers who bought conventional power. Xcel Energy sold out its Windsource program as soon as it announced a fuel surcharge for conventional customers.

Europe accounts for three-fourths of the world's installed wind energy capacity with 40-GW. Germany produces 18-GW of wind energy, which is 33% more than the United States. Texas has surpassed California as the North American state with the most wind generation. Texas earned the top spot after FPL Energy's 735-MW Horse Hollow wind turbines began twirling in 2006.

The wind is blowing strong in Canada where the Prince Wind Energy Project of Sault Ste. Marie, Ontario operates 126 turbines. The demand of over 400,000 Canadian homes is met by wind generation. Although there is stiff opposition from wildlife activists and local residents who do not want windmills in their backyards, the wind power industry continues to make advances.

Large turbines are way more expensive to build. It takes a lot of steel to build a 200-foot tower and steel isn't a cheap raw material. Large turbines also pose a challenge in isolated areas and in developing countries -- they are too large to transport. As a consequence, mid-sized turbines (660-kW models) made by Denmark-based Vestas Wind Systems are in high demand.

The demand for component parts such as blades, gearboxes and generators has raised the enterprise value of blade manufacturers like Denmark-based LM GlasFiber. Turbine maker Suzlon Energy paid almost $600 million to acquire Hansen Transmissions so it would have a steady supply of gearboxes.

Sheryl Sostarich

If the biofuels industry grows as expected, it will balloon from $20.5 billion in 2006 to $81 billion in 2016.

Biodiesel even has its own celebrity spokesman, Willie Nelson, whose BioWillie brand is the fuel of choice of America's long-haul truckers. The Indy Racing League made the switch to all-ethanol fuel in 2007 and it hasn't slowed the lap speed of its open-wheel racecars.

In Brazil, over 70% of new cars are flex-fuel vehicles. A reported 40% of the country's automobile fuels come from ethanol. The primary feedstock for ethanol in Brazil is sugar cane. Cosan Limited (NYSE: CZZ), which came public in September 2007, is one of the largest producers of sugar cane in Brazil.

Archer Daniels Midland is building a sizable commercial business in bio-fuels. ADM produced 1 billion gallons of corn-based ethanol in 2005, representing 25% of the total ethanol production in the United States and 11% of the world's total production.

Many small independent companies are experimenting with ways to make ethanol from non-food crops such as corn stover and rice straw. Switchgrass and miscanthus are equally good feedstocks for ethanol.

DuPont is spending ten percent of its $1.3 billion research budget to develop technologies that turn carbohydrates into plastics.

China is being forced to develop clean burning fuels. Gushan Environmental Energy (NYSE: GU), wich came public in December 2007, is the largest biodiesel producer in China. It produces biodiesel from a variety of feedstocks including vegetable oil, animal fat, and recycled cooking oil.

One bushel of corn yields 18 pounds of distiller's grain and 2.7 gallons of ethanol. VeraSun Energy (NYSE: VSE) of Brookings, South Dakota has developed a process by which it can turn distiller's grain into biodiesel.

Henry Ford and Rudolf Diesel were thinking of using vegetable oils for engine fuels back when they designed the first cars and engines. Rudolf Diesel's first engine, which was unveiled at World Expo 1900, was designed to run on peanut oil. Henry Ford told a New York Times reporter in 1925 that "the fuel of the future would likely come from fruits, weeds, or sawdust."

Sheryl Sostarich

If you're going to own a building for a long time, it's not all true that building green costs more. Santa Monica, California housing administrator Susan Munves insists that they'll be a lot more net-zero energy homes once buildings are forced to measure their carbon emissions.

New York Times correspondent Thomas Friedman told his readers "Green cars, homes, offices, appliances, designs, and renewable energies will be the biggest growth industry of the 21st century. And if America doesn't dominate that industry, China, India, Japan or Europe surely will."

There's a whole list of initiatives that earn platinum-grade, green-building certification including LED light fixtures, maximum daylight, thermal storage that produces ice overnight, and floor by floor heating, ventilation, and air conditioning.

Wal-Mart (NYSE: WMT) has embraced energy efficiency in a big way by setting the goal of doubling the fuel efficiency of its truck fleet and cutting store energy use by 30% over the next ten years.

Clarum Homes Vista Montana is the ultra modern green home community. Clarum's Enviro-Homes meet the highest standards of energy and water efficiency. Enviro-Homes use a technology born in Europe called the tankless hot water heater. Instead of a 40-gallon tank, each housing unit is equipped with a wall-mounted gas-fired heat exchanger that heats the water only on demand. Of course, it's up to the consumer to speed up those shower times.

Other products installed by Clarum include a solar radiant barrier. It's an aluminum sheath below the roof that blocks summer heat to save 8 to 12% on air conditioning. The Clarum complex also comes with a T-MASS wall made by Dow Chemical. The T-MASS wall is a Styrofoam layer between concrete that doubles a wall's insulation value.

Cree Company (NASDAQ: CREE) of Durham, North Carolina is holding its own against global behemoths General Electric and Philips with breakthroughs in LED technologies. LEDs aren't cheap compared with the up-front costs of fluorescent or traditional incandescent bulbs, but that could change.

Sheryl Sostarich

Water is the lifeblood of civilization. Though the world has plenty of water, it doesn't have a ready supply of clean, fresh water. China has 7% of the world's fresh water but 21% of the global population. Veolia Environnement (NYSE: VE) establisted a foothold in China when it purchased a couple of Chinese utilities that provide water and sewer services to 110 million people.

Major wars have been fought over scarce resources, usually crude oil. If water shortages become a severe problem, some fear that water could trigger the next resource war. There are several technologies that deal with the water supply issue; namely, desalination, ultrafiltration, reverse osmosis, and biomimicry, but these technologies are still in the infancy stages of development.

Desalination, a process of converting seawater into freshwater, is used extensively in Saudi Arabia. General Electric paid more than $1 billion to acquire Ionics of Waterown, Massachusetts in 2005. Ionics is a leading supplier of membrane-based desalination systems.

Zenon Environmental, a wholly owned subsidiary of GE, ha been a pioneer of ultrafiltration. This is a process of filtering water using micro-porous membranes to trap algae, bacteria, pesticides and salts.

Hyflux of Singapore has developed a water recovery technology called NEWater that converts wastewater into drinking water. Singapore will be converting up to 2.5% of its wastewater into municipal drinking water by 2011.

Siemens (NYSE: SI) has partnered with Mekerot, Israel's largest water utility, to develop technologies that reuse scarce water. Ultimately, some of that reclaimed water might be sold to China.

You might think it's a new technology but NASA astronauts have been using a nanofiber water filtration system developed by Argonide Corporation for several years. We take it for granted that we can turn on the tap and get fresh water but will it last forever?

Sheryl Sostarich