Wind Industry Will Do Just Fine Regardless of U.S. Clean-Energy Subsidy

If energy independence and lowering carbon dioxide emissions are truly goals of U.S. policymakers from both political parties, the decision to maintain the wind production tax credit should be a no-brainer. It should help stocks such as SunEdison  .

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But regardless of whether the production tax credit is extended, the future looks bright for wind even though energy sector investors have been spending much of their time lately immersed in the details of the Halliburton   and Baker Hughes  merger and the Keystone XL pipeline votes.

Two recent events warrant further attention: One was an approval by Deepwater Wind, the privately held wind developer headquartered in Providence, R.I., to connect an offshore wind farm to its home state's power grid. The project, which could meet the electricity needs for over 17,000 households, is slated to begin construction next year. The other major news item that didn't get much attention was SunEdison's $2.4 billion buyout of First Wind, one of the largest wind developers in the U.S.

While both events were important, SunEdison's move could signal that the wind sector is moving closer to progressing successfully even without the production tax credit. The latter scenario, one German-based Siemens is targeting, is making renewable energy economically viable with coal and natural gas even independent of subsidies.

Speaking of being more viable, at $0.04 per kilowatt-hour, renewed optimism regarding the future of wind is being helped by the fast evolution of technology. Technological innovation, from blade design, gears, sensors and energy storage solutions are driving costs lower and helping to make wind more price competitive with fossil fuels. This may be why David Einhorn, hedge fund manager of Greenlight Capital, holds a 7.85% stake or 21 million shares in SunEdison and believes the shares are worth $32.

As for Siemens, the company has shown considerable commitment to wind energy in 2014 and it appears this power source will be an even bigger focus for the company in 2015. Siemens is the supplier of the largest onshore wind turbine deal in the world (448 turbines), an order from Warren Buffett's MidAmerican Energy to be located in Iowa. According to the company's Web site, Siemens has over 11,500 wind turbines operating globally with nearly half installed at wind farms throughout the U.S. Therefore any positive spotlight on the wind sector should benefit Siemens.

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