IU.com: What about solar power?

Pernick: Considering that solar costs are positioned to drop dramatically in the next several years, we could easily get to a point where solar might represent 10% of the country's electricity generation by 2025. But that can only happen with utilities actively involved in the process. Other industries also must take the right steps in terms of gaining proper access and receiving enough incentives to fully take advantage of new solar technologies. It's important to note that in the past five years, the most activity we've seen in the U.S. in terms of solar adoption has been from commercial and industrial buildings putting systems on roof tops.

IU.com: How is new legislation impacting new projects?

Pernick: The last two quarters of 2008 and the first quarter of 2009 were pretty dismal. The decimated credit markets didn't help alternative energy sectors. But we're starting to see the impact of stimulus dollars and more liquidity in credit markets show up in a number of different ways. For example, the stimulus package includes over $9.3 billion to improve high-speed rail. To build a smarter grid system, another $11 billion is targeted in the stimulus bill. In total, we've identified more than $70 billion from this stimulus package for clean energy projects alone. If you add clean water spending into the mix, that goes up to close to $90 billion.

We also should see some stimulus coming as the result of an eight-year extension for solar tax credits. The most we've seen in terms of extensions in the past have been two years. And it often takes a long time to actually receive an extension. So this eight-year period should provide a lot more clarity in lowering costs for people to install solar power.

But we don't expect any of these drivers to make a big impact on clean energy industries until early 2010. So while we're starting to see some increased activity, it's going to take some time to recover from the ravages of the recent bear market.  

IU.com: What is the most attractive subsegment of renewable energy market?

Pernick: Some other areas of interest are conservation and efficiency. By deploying these measures, you reduce the amount of electricity needed. Weatherizing a house, for example, is a great idea. How many people use a digital thermostat to automatically turn off their heat when they don't need it? And there are a lot of new energy efficient technologies coming down the road—including windows that can reduce cold or heat outflows by three-to-five times. Retrofits are great and a lot of programs are being developed to help people fund these types of projects.

But the really dramatic changes are coming in the green building arena with brand new structures. Anything embedding more intelligent and efficient systems in our power grid is going to make a huge difference. When there's a power outage today, utilities find out today by phone calls. In the future, utilities are going to use technologies that talk to each other. It's the next big networking project in high-tech.

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