Guinness Asset Management, which launched an alternative energy fund in January, says the renewable energy manifesto of US president-elect, Barack Obama, will allow the industry to flourish, provided the policies are implemented fully.

Mr Obama unveiled the plan a month before the September chaos in the markets. It could now prove to be a part of his manifesto that will take more than one term to complete as the economy dominates the political agenda.

But if he sees through ideas like increased investment in “green” private efforts, tax credits for hybrid cars and a 25 per cent target for US electricity from renewable sources, Guinness expects a positive impact on profits as well as on the planet.

“Such policies could provide a long-term framework from within which an industry that can survive without subsidies can emerge,” said Ed Guinness, the firm’s co-manager.

Looking at individual policies, Mr Guinness welcomed the planned $15 billion a year for private efforts to build a clean energy future.

“To put this number in perspective, the Bush administration had invested $10 billion into alternative fuels from 2001 to January 2006,” said Mr Guinness.

He highlighted the boost this will most likely give to the wind, solar, hydro and geothermal sectors for electricity generation. The firm also expects the development of infrastructure for natural gas vehicles.

Crucially, according to Mr Guinness, president-elect Obama recognises the need for huge investment in the electricity grid. This will enable the increased use of intermittent electricity generation, like wind and solar.

But, he warns, the administration will be cautious on biofuels, given the recent realisation that they have contributed to rising food prices.

The firm expects natural gas to become a lucrative investment option, as the conversion of vehicles to the source is likely to be another important part of US oil substitution.

 The 25 per cent target for renewable electricity reliance by 2025 creates great opportunity for investors, according to Mr Guinness. He says it will be important to keep track of what policies are implemented in the first term to enable the US to reach this target.