Citigroup Wind-ing up Profits

If you deem cash-for-clunkers a success, and you profited nicely from the automakers' stock increases, you better check this out.  Citigroup Inc. (NYSE:C) is investing $120M into wind farms.  Why you ask?  Welcome to the Green Campaign of 2009… 

The government has a new program that gives big cash grants to renewable energy projects, where the government is offering to pay 30% of the cost to build a renewable-energy facility and allows more depreciation deductions to help with year-end balance sheets.  Enter the wind farm.

But it gets better...  Several US states have mandated that a certain percentage of power usage comes from renewable resources, often in the 10% - 15% range and it is anticipated that number will only escalate in years to come.  Well, the wind farms kind of have the corner of the market on this required renewable energy source and can easily charge fat premiums.  Sure, regulation will probably catch up with them someday, but in the mean time they are likely going to be cash cows for the wind farm companies.  Citigroup is smart to invest now.

It is reported that the government expects to spend $3 billion in renewable energy projects grants through next year.  In the first few weeks of the program, they have already received $800M in grant requests.  And now there are rumored talks of the government assigning more money to the fund.

The AES Corporation (NYSE:AES) is the company that Citigroup has invested in, and they are developing a massive Pennsylvania wind farm.