Green Energy Could Put Green in Your Wallet - Barron's (CSCO, ABB, GOOG, MSFT, More...)

The U.S. electric-power grid was designed over a century ago, and is in need of an update to meet the needs of America's changing power needs, which makes investment in 'green' companies a sure-fire way to capture the movement, according to a Barron's article today.

One of the larger bets is Cisco (NYSE: CSCO). The CEO made headlines last year when he said that power networks would eclipse the internet as the go-to business opportunity for the Web pioneer.

Barclays believes that spending on green upgrades could top $40 billion by 2015, and $100 billion by 2030, up significantly from less than $10 billion today. The upgrades can range from metering and monitoring devices, to technologies that will help utilities to communicate with each other.

Other big names looking to benefit include favorites such as Google (NASDAQ: GOOG), Microsoft (NASDAQ: MSFT), Duke Energy (NYSE: DUK), IBM (NYSE: IBM), and FPL Group (NYSE: FPL).

Other smaller companies to note are ABB (NYSE: ABB), EnerNOC (NASDAQ: ENOC), and Itron (ITRI).

Electric Power Research Institute believes that energy initiatives could cut energy growth in the U.S. by 22% to 0.83% per year, or about 236 billion KWh/year. That's equivalent to 14 NYC's per year.

Though the Obama administration has called for $3.4 billion in stimulus for smart-grid initiatives, regulatory restraints, given cost, and technology will prevent the sector from becoming a gold mine for investors in the ultra near-term. Barclays recommends to gradually add smart-grid players to your portfolio.

An analyst from Canaccord Adams says that smart-grid companies make sense to invest in, as they are the precursor to solar and wind energy projects. Without a better delivery system, the projects would be in vain.

Itron is a major producer and server of meters and two-way communications systems. There's plenty of room to grow there, as Barclays estimates that only 8% of buildings have smart electric meters. The company sees annual revenues of about $1.7 billion, and has a market cap of $2.7 billion. It ended 2009 with a $1.5 billion backlog, from $1.3 billion in 2008, a 15% increase.

The company is expected to report a FY10 EPS of $3.74 on $2.09 billion in revs.

Eneroc is a leader in demand response and energy management. It saw revs of $190 million in 2009, and could quintuple that in 10 years, according to Barron's. The company pays customers to cut consumption during peak hours, and receives revenues from taking a portion of savings from its utility clients.

Shares are rather volatile though, with a beta of 1.69. Shares surged to 50 in 2007, before reeling back to single-digits during the financial crisis, and rebounding 129% since lows in March 2009. Some analysts call for the stock to hit 40 before another pull-back, a 42% premium to today's price of $28.03.

The ETF First Trust Nasdaq Clean Edge Smart Grid Infrastructure Index (NASDAQ: GRID) is a way to capture many in the sector without commuting to just one.

Finally, for more immediate gratification, utility companies are a quick way to get some exposure to smart-grid upgrading. The names include FPL Group, Duke Energy, and Exelon (NYSE: EXC). Many of these providers will be updating their utility networks and make multiple improvement in electricity management.

Check out some of these companies to add a little electricity to your portfolio.

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