Clean technology stocks represent a variety of companies whose missions include environmentally conscious equipment, products, services and energy resources. Some energy producers are also clean technology companies because they utilize renewable resources and technology that makes possible the production of this energy.

Other clean tech companies include technological firms that manufacture tools and equipment that are energy efficient and 'environmentally friendly.' Examples of clean tech stocks include hybrid automobile manufacturers, and energy efficient appliance, electronic and industrial equipment producers.

Cree Inc. (CREE): This company produces increased energy efficient lighting, component and electronics products for automobiles, wireless communication devices and other lighting apparatus from building to small electronics. The company is considered a clean tech company due to the high efficiency ratings of its products.

Fuel Cell Energy Inc. (FCEL): This is a company that specializes in the manufacture and distribution of fuel conversion technology that utilizes renewable resources such as bio-energy. This company operates in several countries around the World and serves a number of industries.

First Solar, Inc. (FSLR): First Solar, Inc. is a company engaged in the production and distribution of component parts and equipment used in the generation of solar electricity. It is a large solar company that was founded in 1999 and has experienced strong revenue increases in the last few years.

There are several unique benefits that have the potential to positively influence investments in clean technology stocks and clean energy manufacturers. A few of those benefits are as listed.

• Federal Tax relief: Companies that utilize environmentally safe operations may benefit from Federally administered subsides and tax breaks.
• Legislation may spur demand for renewable technologies.
• High Oil Prices: The high cost of oil can trigger investment in new sources of energy such as solar, wind, geo-thermal and other alternative sources of energy.
• Growing Industry: Environmentally conscious companies are a relatively new breed and as awareness of global warming and environmental problems associated with less environmentally friendly industries emerge, these companies may benefit from both the awareness and need for Earth sustainable solutions.

• Overhead costs: The cost of managing an environmentally friendly business can be higher due to increased research and development costs and higher costs of materials and component parts. This is so as traditional companies may benefit from products produced in economies of scale which lowers materials prices. As a result profit margins may be smaller than competing traditional companies.
• Smaller Capitalization: Due to the relative newness of demand for cleaner, more environmentally conscious technology, many of clean tech stocks are smaller in capitalization. This can be a contributing factor to competing well against large, well established companies that are also able to allocate investments into energy efficient and environmentally conscious equipment and products. Many large automobile manufacturers are doing just that.

Since clean technology and clean energy companies may run the risk of higher operating costs, it may be a good idea to consider their debt management when assessing the stocks of these companies. Two such debt metrics are the following.

• Times interest earned (TIE): Times interest earned is a debt management ratio that measures how much interest a company pays in relation to financing of revenue before taxes and interest. It is calculated by dividing earnings before interest and taxes (EBIT) by interest charges to the company.

• Debt to Asset Ratio: This ratio is a good measurement of how much debt leveraging a company uses to maintain its operations. While many companies utilize debt for the benefits expanded operations yield, a debt to asset ratio that is too high can be an indicator of financial weakness for a company.