But one small Canadian company, Western Wind Energy Corp., has carved out a niche in California that gives investors a chance to get in on one of the hottest U.S. energy sectors.
The TSX/Venture-traded company, based in Vancouver, has had a stellar stock market performance in the past year, with its shares more than tripling to hit $3.50, although it has fallen back to the $3 range.
The company has two wind farms in California that are already producing electricity, and a portfolio of potential projects that could provide substantial growth going forward.
One of Western Wind's two operating facilities is the Mesa project near Palm Springs, where more than 400 old turbines generate about 30 megawatts of power. The company plans to upgrade the small turbines to dramatically increase the output.
The other project in operation is the small 4 MW Windridge farm in the Tehachapi pass area about 160 kilometres northeast of Los Angeles.
Western Wind owns more land in the windy Tehachapi pass, and has a power contract there for a much bigger 120 MW project called Windstar. It hopes to get it up and running in the coming months.
Western Wind also has other potential development sites in California and in Arizona, and is considering getting into the solar power business.
The key to the company's success, said analyst Massimo Fiore of Versant Partners Inc., is that California has both relatively high electricity prices, and a policy of quickly ramping up alternative energy production, with a goal of 20 per cent renewables by 2010. At the same time, federal production tax credits provide yet another incentive.
"There are only a few places in the U.S. where you can make good money per megawatt (of wind power), and California is one of those places," Mr. Fiore said.
Still, Western Wind has not yet moved into the black. In the 11 months to December 31 (the company changed its year-end) it lost $2.6-million on revenue of $4.3-million.
The company's prospects were also clouded in the past 18 months because it was involved in a messy legal battle with one of its largest shareholders.
In 2006 Australia's Pacific Hydro Ltd. held about 25 per cent of Western Wind's shares, but at the Canadian firm's annual meeting that year shareholders restricted their voting power to 20 per cent. Pacific got miffed and threatened to seize some of the Canadian company's assets.
There was a flurry of litigation, but eventually a settlement was reached and Pacific Hydro agreed to sell its holdings. The distribution was completed in May.
Western Wind announced a private placement to raise money that will be partly used to pay off the last $12.5-million it owes Pacific Hydro.
The balance, about $5-million, will boost the company's working capital position.
Mr. Fiore, who rates the company a "strong buy" and has a one-year target of $5.10, said he is now more confident in Western Wind's long-term value after the company announced that it had turned down a $228-million offer for development rights to the Windstar site.
That sets a floor for the value of the project, and may encourage others to bid more, Mr. Fiore said. Still, he was disappointed the company didn't accept the offer, and said he expects eventually Western Wind will be acquired by a bigger player.
Robert McWhirter, president of money manager Selective Asset Management Inc., said he held Western Wind stock in one of the funds he manages, although he sold it recently when the shares appeared to stall.
The appeal, he said, was that Western Wind seemed underpriced compared with wind companies that operate in Canada. It also appeared well managed and clearly is "sitting on one of the windiest spots in California."
While Mr. McWhirter has considered jumping back into Western Wind, he's being very cautious because of concerns about a possible overall decline in equity markets.
Still, "I like the overall concept," he said.
"California is a market that is very attractive."
While the pickings for U.S. wind power investments are slim, there are several public Canadian companies with heavy exposure to wind-generated power. Among them:
Boralex Inc. a Quebec-based company that has wind, biomass and hydro-electric plants in Canada, the U.S. and France, recently won two new contracts from the Quebec government. Its stock has doubled in the past three years.
Canadian Hydro Developers Inc., based in Calgary, has wind and hydro projects in Alberta, British Columbia, Ontario and Quebec. Its stock has been flat for the past year.
Naikun Wind Energy Group Inc. is planning a huge offshore wind farm in Hecate Straight between the Queen Charlotte Islands and the mainland of B.C. Its shares have gone from pennies to almost $4 in the past three years, and now trade in the $2.40 range.
Earthfirst Canada Inc. has just started construction on its first wind project in the Peace River region in northeastern British Columbia. The company has several other wind projects planned across Canada. Its stock is very volatile and trades thinly.