1. Offshore wind leases are well under way.
If you didn't know the U.S. government included a "Bureau of Energy Management," you wouldn't be the only one. But this entity has been leasing off our ocean since 2009. The auction-based bidding system ensures low prices for a rather risky investment, paving the way for offshore wind possibilities where they otherwise might not exist. Dominion Resources (NYSE:D) has been an especially active bidder, and it just received $47 million in government funding to pilot a 12 MW offshore wind project.
2. Location, location, location
While putting our power production out to sea may seem like a silly idea, it's actually one of the best spots around. Any wind blowing faster than 7 meters per second is ripe for generation, making almost all the United States' coastline capable of production. And with more than 70% of our nation's electricity consumption coming from our 28 coastal states, energy generation can be close to the action.
3. Uncle Sam wants to cut costs
In the last 20 years, wind energy costs have plummeted 85%. But that's still not enough to make it competitive with most other energies. There's a reason Dominion Resources isn't investing in wind on its own, and the U.S. government knows this energy needs more support to grow.
While the Natural Resources Defense Council notes that, as of 2010, "top performing wind farms in areas with excellent wind resources, making wind the cost competitive source of non-hydroelectric renewable electricity," the U.S. Department of Energy wants to cut offshore wind costs an additional 63% by 2020. If they're successful, wind might be able to win on its own.
4. Europe is winning on offshore wind
While the states are still sizing up offshore opportunity, Europe embraced this renewable energy sources years ago. The European Commission's 2008 "Communication on Offshore Wind Energy" noted that "offshore wind can and must make a substantial contribution to meeting the EU's energy policy objectives."
According to the European Wind Energy Association, the continent had already installed 5,000 MW of offshore wind, accounting for 10% of its total wind installations, and estimates put total offshore wind capacity at seven times Europe's total electricity demand.
Looking ahead, the E.U. isn't slowing down. It's set a goal of installing 40,000 MW of offshore wind power by 2020, and a massive 150,000 MW just 10 years later.
5. India's in on it, too
Offshore wind isn't just for developed countries. As one of the fastest growing economies in the world, India knows its energy demands require a multi-faceted approach.
The national government is putting power behind offshore wind opportunities and has already identified a section of coastline with 1,000 MW of potential. The country is considering a 10-year "tax holiday" to get offshore wind on its feet, with additional tax breaks for studies and equipment imports.
The tipping point
Offshore wind is well off the radar of most energy investors, but there are plenty of stable companies making a pre-emptive push. Grabbing a dividend stock like Dominion Resources can award you earnings today with major growth potential tomorrow.
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Justin Loiseau has no position in any stocks mentioned. The Motley Fool recommends Dominion Resources. 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.