Penny Stock Columns on the OTCBB

Cleaning Up with the Clean Energy Tax Stimulus Act

04-15-2008

by Dan Blacharski

Tax credits generally do tend to do what they set out to do, and that is to encourage some activity or socially beneficial goal that would not otherwise take place. In the past, tax credits for alternative energy has gone a long way to encourage development of things like wind power and solar. A credit set to expire this year may get a new lease on life, with a bi-partisan bill designed to extend the business credit for another eight years. The Clean Energy Tax Stimulus Act of 2008, introduced earlier this month in the Senate, also extends the consumer tax credit of 30 percent for another year, and removes the existing $2,000 cap.

The bill was passed just today in the Senate by a vote of 88 to 8. If the legislation is signed by the President, it would mean a big shot in the arm for the alternative energy business, and ultimately, creation of some much-needed jobs. It's by no means a done deal at this point, but investors and analysts are already starting to look at clean energy stocks with renewed interest.

This renewed interest starts on the big boards, with the NASDAQ-traded JA Solar (JASO) receiving a new buy rating from Lazard and hitting its high this week in trading. The good news for over-the-counter traders is that the interest doesn't stop there; companies like NACEL Energy (OTCBB: NCEN.OB) are also getting a boost from analysts who have assigned it a new high target of $4.00. The wind energy company develops utility-class wind power, and has two new projects in Texas. The stock opened at $2.72 today, up from yesterday's close of $2.60, primarily on the good news in Washington. Volume was unusually high, and day traders that saw this one coming are going to be able to make that payment on the Mercedes after all.

This is a good time to watch this and other over-the-counter alternative energy stocks, as this bill moves on to the President's desk. Once it is signed-or if it is signed-expect some strong activity, vigorous short-term gains, and the beginning of a nice long-term uptrend for this industry.

The writer does not own shares in the above stocks.

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