Geothermal Power Expands in the U.S., Says Industry Report

Geothermal Power Expands in the U.S., Says Industry Report

(OTCBB: NGLPF, TSX.V NGP)

Ormat Technologies Inc. (NYSE: ORA), U.S. Geothermal Inc. (AMEX: HTM), Nevada Geothermal Power, Inc. (OTCBB: NGLPF, TSX.V NGP) and other geothermal providers continue to expand in the U.S., despite uncertainty surrounding government policies, according to the Annual U.S. Geothermal Power Production and Development Report.

Geothermal’s Enormous Potential

Geothermal power may not have the same clout as solar power among regulators, but there’s little doubt that it’s among the most promising forms of alternative energy. With practically limitless energy reserves, the problem to date has always been finding a way to efficiently harvest it, and take advantage of the enormous supply beneath the earth’s crust.

SMU and Google documented the significant geothermal resources across the United States capable of producing more than three million megawatts of green power, which is 10 times the installed capacity of coal power plants today. New techniques may soon enable companies to produce electricity at much lower temperatures than occur in a traditional geyser field.

Geothermal Continues to Steadily Grow

The U.S. geothermal industry continues to steadily grow and take advantage of these very positive trends. The industry added 91MW of newly installed capacity over the past year, according to the annual update on the geothermal industry from the Geothermal Energy Association (GEA), with current capacity of 3,187MW in the U.S. (outpacing all other countries).

Perhaps most tellingly, this growth comes in spite of potential cuts in government support. Federal tax credits supporting geothermal development expire at the end of 2013, and it’s uncertain whether or not regulators will renew the credits. Most plants require between four and eight years of lead time before a geothermal resource is effectively tapped.

Moving forward, GEA Executive Director Karl Gawell expects another 100MW of capacity to come online in 2012, representing nearly $1 billion of investment in the clean energy economy. Currently, eight U.S. states have geothermal power generation and an additional seven states have geothermal capacity under development.

A Great Investment Opportunity

Investors with a long-term time horizon should consider investing in companies like Ormat Technologies Inc. (NYSE: ORA), U.S. Geothermal Inc. (AMEX: HTM), and Nevada Geothermal Power, Inc. (OTCBB: NGLPF, TSX.V NGP). Over the long-term, the favorable economics of geothermal power could convert these companies into very efficient alternative energy stocks.

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