U.S. vote seen as one-way bet for solar, wind power

By Braden Reddall and Nichola Groom - Analysis

SAN FRANCISCO/LOS ANGELES (Reuters) - An anticipated Democratic U.S. election sweep is thrilling solar and wind power investors because that outcome is seen as a big step toward establishing federal requirements for alternative power generation.

Analysts said a national mandate for generating renewable power would be a relatively easy first step in any "green" agenda because dozens of states already have such policies, and the cost to a cash-strapped government would be negligible.

U.S. voters were casting their ballots on Tuesday, and Democrat Barack Obama held a decisive lead over Republican John McCain in national opinion polls, and Democrats are expected to win more seats in Congress.

"A Democratic Congress and Democratic president: I think almost certainly there will be a federal renewable portfolio standard," David Crane, chief executive of power company NRG Energy Inc, told Reuters.

That sentiment is shared by many in the energy sector who see an increase in government support coming as way to help jump start the economy and stimulate job growth. Natural gas and nuclear-fired power utilities, hybrid car technology and power grid improvement should also get a boost.

"A national renewable portfolio standard would be a big, big shift in policy, and that doesn't inherently have any cost to the federal government," Raymond James analyst Pavel Molchanov said.

Shares of solar companies, beaten down by credit worries and the drop in crude oil prices, have surged in response. Suntech Power Holdings Co Ltd, JA Solar Holdings Co Ltd, First Solar Inc and SunPower Corp are all up by more than 50 percent in the past week.

Shares of Denmark's Vestas, the world's No. 1 wind turbine maker, are up by nearly two-thirds in that time.

But any costly green initiatives may now come in for greater scrutiny with the price of crude oil trading at half its $147-a-barrel record in July, and the outlook for the economy -- and thus tax receipts -- growing so much darker.

"It's certainly not just a function of the presidency obviously," Molchanov said. "It also matters what is going to be the political dynamics in Congress and what the fiscal situation looks like.

"In other words, not everything is going to be politically doable because of budgetary constraints."

Crane, who gave money to both presidential candidates' campaigns, said he expected any new fiscal stimulus package from Congress would include infrastructure spending, and much of that could go toward power generation.

Barbara Boxer, a California Democrat who chairs the Senate Environment and Public Works Committee, told a recent news conference in San Francisco that infrastructure is a priority.

CARBON WINDFALL

Obama plans to fund federal clean energy support by selling carbon-emission permits to be traded, another area the markets will watch with the Democrats in control of Washington.