Rafael Coven, managing director of the Cleantech Group and manager of The Cleantech Index, thinks at least one of President Obama's energy initiatives is a waste of money.

The $787 billion stimulus package extends the 30% federal tax credit for installing solar electric systems in existing homes, and that provision is the one that Coven thinks is wasteful.

"In the U.S., subsidizing residential solar electric is wasteful compared to many other less sexy renewable-energy and energy-efficiency solutions, such as solar hot water, passive solar heating, ground-source heat pumps, roof coatings, day-lighting, building controls, etc. Capital is very scarce and therefore it 's essential that it's spent where the economic and environmental returns are greatest," Coven says.

The payback on solar electric systems, which can cost as much as $60,000, can be as long as 15 to 20 years, but the payback can be six months to five years for energy-efficiency options. The American Recovery and Reinvestment Act of 2009 that Obama signed February 17, among many other provisions, does include a 30% credit, up to $1,500, for many home energy-efficiency improvements, such as high-efficiency windows, water heaters, air conditioning and insulation.

Overall, Coven thinks it's extremely important that the U.S. government, as well as businesses, invest in clean technologies. For example, energy storage needs massive amounts for research and development and is strategically important, Coven says. At off-peak hours utilities shoot extra electricity into the ground, but if that could be stored they wouldn't need to generate so much between the peak demand hours of 2 p.m. to 8 p.m., he says. Such technology eventually could reduce the United States' reliance on fossil fuels for energy needs, he adds.

Meanwhile, he says, a carbon tax would be a very efficient way of moving us away from fossil fuels, which are too cheap because they don't reflect the costs of the environmental and public health damage they do or federal subsidies they get. These "external" costs are being shifted to taxpayers, he adds. "It's clear in my mind that energy is cheap and absolutely the best way to encourage people to conserve is to make it more expensive," he says.  

Also, regulation is needed to make companies more efficient with energy usage, Coven adds. Most company facilities could save 20% to 30% on energy costs but they are hugely wasteful and don't have incentive structures to be efficient with energy or water, he says.

He acknowledges that the "global economic typhoon" is hampering many projects, including those involving clean tech. In fact, he thinks overall economic growth will be slower for five to 15 years because of the crisis. He expects many weaker players to die (and a few good ones, too), not only in the automotive and finance sectors, but also in solar, biofuels, real estate, publishing, retail and more.

Says Coven: "We have a sustainability crisis-the world cannot go on degrading the environment and consuming scarce resources at this rate if we are to survive. The problem is only accelerated by the 2.8 billion people coming to the planet by 2050 and rising personal consumption, global warming, etc. Government policies and regulations are a part of the answer, but we need big breakthroughs and widespread adoption of clean technology solutions if the planet is to survive and prosper. Therein lies the opportunity: The sustainability crisis is a vastly larger long-term problem than the current financial meltdown and therefore provides bigger opportunities for those offering clean tech solutions, from energy to agriculture and from water to manufacturing, transportation and new materials."

In fact, we are already seeing an enormous amount of venture capital going to clean tech projects, he says. Public companies are using clean tech solutions to reduce costs as well as to grow, he adds. For example, he says, IBM, GE and Honeywell all are positioning themselves to participate in improving the U.S. power grid, and that will be a massive business opportunity.

Coven's Cleantech Index (CTIUS) is the basis of PowerShares Cleantech ETF (PZD). The index includes 76 companies and is more diversified than those that focus solely on alternative energy because it includes businesses in other sectors, such as water, agriculture and nutrition, transportation technology and new materials. You can check out the performance of the ETF and the index here.

Dorothy Hinchcliff is editor of FA online and FA green, as well as managing editor of Financial Advisor magazine. She has spent more than 15 years as an editor and reporter covering personal finance and other business issues.