Fed Support, Higher Gas Prices Make Alternative Energy Attractive to Investors

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"While an economic recovery is not expected until next year, alternative-energy projects are poised for a quick comeback."

Government support of a green economy and the likelihood of rising oil prices are creating investment opportunities in alternative energy, according to money managers at Calvert Asset Management Inc., a socially conscious investment firm.

But the effect of those changes will not be felt until 2010, managers from Calvert and KBC Asset Management International Ltd. of Dublin, Ireland, which sub-advises some Calvert funds, said today during a conference call.

"Investors in clean energy, water or other related infrastructure will be in for a very interesting year in 2010," said Jens Peers, lead portfolio manager and head of Eco Funds at KBC Asset Management. "The fundamental drivers will be coming together in 2010. And we expect fossil fuel prices will increase post-recession, which makes alternative-energy sources look more attractive from a cost point of view."

Earnings-growth projections for alternative energy are also higher for 2010. "This is providing significant opportunities for investors coming into the space now," he said.

While an economic recovery is not expected until next year, alternative-energy projects are poised for a quick comeback, Mr. Peers said.

And wind-power projects are in the forefront.

"Wind is the most mature alternative energy subsector and the closest to being cost-competitive without subsidies," Mr. Peers said.

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