Not Just Fueled By Hot Air
Diane is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
The rushed and abbreviated fiscal cliff deal, approved just under the wire on New Year’s Day, included a $12 billion extension of a wind-power tax credit and other additional support for renewable energy. The measure blew through despite a less than sunny response from opposing Republicans who maintained that is just the kind of runaway government spending they want slashed.
The fresh package of tax provisions provides relief to renewable energy companies, like General Electric (NYSE:GE).
Yes, GE is a renewable energy company.
While best known perhaps as the energy company behind the iconic GE branded light bulbs and the accompanying slogan “We bring good things to life,” GE is a truly diversified technology and financial services company. Its products and services run the gamut from aircraft engines to water processing to household appliances to business and consumer financing to power generation.
Providing a strong wind beneath the sails of its profitable power generation division is its wind energy arm.
The company continues to improve its wind turbine series product lines by increasing capacity, performance, reliability, and efficiency. Thus, GE says, it is creating more value for winded customers.
GE is aiming to breathe some new life into its wind turbines, currently the world's most widely deployed turbines, by making them more affordable.
By switching from the stiff fiberglass blades it currently uses for its turbines blades to new ones made from a select cloth fabric, GE says it can lower wind blade turbine costs by a whopping 40%.
The new blades would offset the cost of its proposed larger turbines, which also reduce the cost of wind power by providing more oomph. But since larger turbines mean larger blades, by changing the way the blades are made, GE could ultimately bring down wind turbine costs by as much as 10%.
The world is taking notice of GE's prowess in the wind arena.
In December, GE made news when it reported it would supply 134 wind turbines to a Kansas City Wind Farm.
More recently, GE signed a nearly $11.4 million five-year wind turbine agreement with Taiwan Power. The company also inked a deal to provide 43 wind turbines to a Turkish developer for four new projects in Turkey. Plus, GE recently announced a deal to buy 32 operating wind farms in France with MEAG, the asset management arm of Munich Re.
Furthermore, GE said it is scoping out Europe for other opportunities and regions where it can expand its renewable energy presence.
Competitors in the wind industry include utility giant Exelon (NYSE: EXC). But in a rare and eyebrow raising move, Exelon turned its back on fellow wind promoters when it lobbied not to have the alternative energy credit extended. Execlon claimed the subsidy distorted electricity prices. The company apparently was more focused on restoring one of its nuclear power plants in Pennsylvania that had been shut down for routine maintenance.
French state controlled power group Electricite de Frace Sa disposed of its 1.6% in Exelon in late 2012.
Scores of investors buy utilities like Exelon for no other reason than a healthy and growing dividend. Yet Exelon has never been too clear of its dividend policy, turning plenty of investors off.
But wind power is attracting new investors for its growth potential and "greenness."
The future for wind energy is bright and promising. The technology keeps growing, and more and more areas continue to seek alternative and more efficient energy means.
GE is stirring the air when it comes to wind energy. Now, if it could only change a breezes’ direction.
DianeAlter has no position in any stocks mentioned. The Motley Fool recommends Exelon. The Motley Fool owns shares of General Electric Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!