The renewable energy sector got a little bump last week when Massachusetts approved the Cape Wind power purchase agreement, bringing the controversial project closer to construction. This may not seem like a big deal on the surface, but this is the first offshore wind project to be approved, overcoming many obstacles and opening a promising U.S. market.

It's been a tough year for wind around the world as projects come under greater scrutiny. Virginia recently nixed a wind development power purchase agreement because it would raise ratepayers bills by 0.2%. Environmentalists and renewable stock junkies may find that a small price to pay, but the reality is wind and solar projects are being viewed with a skeptical eye right now.

No doubt it's affected companies across the industry. Wind suppliers Vestas and Broadwind Energy (Nasdaq: BWEN) have both had horrific performance in 2010, so a little hope for an uptick comes at a critical time.

There was a long fight against the Cape Wind project from residents who didn't want to see the 130 turbines spinning in the distance from their Martha's Vineyard estates. Big names like the Kennedys were out front, and a group called Alliance to Protect Nantucket Sound raised millions of dollars for lobbying efforts. But now the project is near construction, and the alliance is swimming in red ink.

If a project like this can succeed against that high-powered opposition, it should be even easier in other states along the East Coast where Google (Nasdaq: GOOG) is partnering to build offshore power lines. These projects will be important as we run out of easily developed land close to transmission lines. Offshore offers not only a more consistent wind source, but also more population density, cutting down on transmission losses.

American Superconductor (Nasdaq: AMSC) is also betting big on offshore wind with SeaTitan. It thinks it can make a 10+ MW wind turbine using this technology. If true, it would be a game changer. General Electric (NYSE: GE) and Siemens (NYSE: SI) are also pushing offshore turbines. Maybe offshore wind can help turn the industry around?

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Fool contributor Travis Hoium owns shares of American Superconductor. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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