As CNBC's special energy correspondent a few years back, I was one of those pundits who got caught up in the hype over alternative energy stocks. I didn't listen to older-but-smarter (well, at least smarter) analysts who warned me that alternative energy stocks have a nasty habit of never delivering on their potential.
Cut to today: The recent run-up in oil prices and growing concern over global warming are encouraging investors to think -- once again -- that the time is right for alternative energy stocks.
I wouldn't bet on it. The energy bill that's supposed to pump life into solar, wind, fuel cell, and other clean technologies remains completely stalled in Congress. A consulting firm predicts that the U.S. market for green power will hit $10 billion by 2013, compared with a few hundred million today, but that still will be a miniscule percentage of traditionally generated electricity.
Still, there is an important difference between today and a few years ago: Namely, there are now a handful of companies actually making money from alternative energy technologies. Not surprisingly, they are two of the least exotic ones: hybrid car engines and wind power.
A hybrid car engine can run on either gasoline or electricity. It's seen as a "bridge" between today's oil-gulping, pollution-belching car engines and tomorrow's clean-as-a-whistle fuel cell engines. But with all the technical problems that still must be worked out with fuel cell engines -- not to mention the enormous problem of trying to construct a hydrogen delivery system so that motorists will still be able to fill 'er-up -- it's a good bet hybrids will be around for a long time. Moreover, experts say, the recent surge in oil prices has clearly moved hybrids out of the niche category and into the mainstream.
The two car manufacturers that clearly are best positioned to take advantage of hybrid technology are Honda
Meanwhile, environmental dilettantes in the U.S. battle over conducting wind power projects in places such as Martha's Vineyard because they wouldn't be pretty to look at, while wind power is revving up in other countries. Besides global warming concerns, wind power is getting a big boost from cost-lowering technological advances. With Congress recently renewing the industry's tax credits, U.S. development should soon pick up, too.
While General Electric
Fool contributor Bill Paul is a former Wall Street Journal and CNBC energy/environment reporter. He also publishes an environmental newspaper for schoolchildren. He doesn't own any stock in the companies mentioned.