This technology is essential to BIG oil. And we have strong reason to believe this tiny stock could get a takeover offer from a major oil company tomorrow. Check out this briefing ahead of a coming offer.
Solar Power: The Fastest Growing Energy Source In The World
by David Fessler, Advisory Panelist
Friday, April 3, 2009: Issue #971
Get ready: The solar power “big bang” is getting underway as we speak. By all accounts, solar power is quickly becoming the fastest growing energy source in the United States, and indeed, the world.
But here’s the most amazing part…
Even with a meteoric 48% annual growth – and that of a select group of solar companies – its just getting started. The market is expected to double over the next five years, and triple in just seven.
What’s behind solar’s shine? Is this torrid growth sustainable? What opportunities are there for investment in the solar space? Let’s take a look.
Solar Power: Several Types of Solar Panels
Solar panels can be divided into several types: thermal, photovoltaic, hybrid and building integrated photovoltaics (BIPV).
- In a thermal collector, water or another fluid is heated by the sun’s rays, piped into a storage tank, and then used to heat either domestic hot water or as a heat source for a building.
- A photovoltaic solar panel is made up of a number of individual semiconductor solar cells. Electricity is produced when protons from the sun’s rays slam into electrons in the cells, raising their energy level. A small electrical signal is the result. This signal is combined with that of other cells and panels, and the resulting power can then be stored, used directly at the generation site (someone’s home, for instance), or pumped back into the local electrical grid for use elsewhere.
- A hybrid panel combines both thermal fluid heating and electrical power generation into one unit. These are relatively new, and while showing great promise, are not yet widely available. Typical installations combine many panels together into arrays. These may be located on the ground, but typically are on residential and commercial rooftops, otherwise wasted space. A control system handles the interface and control of the panels to the existing electrical supply or hot water system.
Solar Power Investment Opportunities: Photovoltaic Solar Panels
Let’s take a closer look at photovoltaic panels, since that’s where the growth and investment opportunities lie in solar power.
Not unlike other semiconductors, continued research and developments in the materials themselves have resulted in huge boosts in panel energy conversion efficiencies. As little as 10 years ago, 2% conversion efficiencies were the norm for polysilicon panels.
Commercial solar panels are now approaching 9% to 10%, and researchers have achieved nearly 20% in the laboratory.
However, new cadmium telluride thin-film technology is the industry’s current price/performance leader, and it and other derivations of thin-film will completely replace polysilicon panels in a few years.
Current panel costs are in the range of $1 to $2 per watt, however some companies have already broken the $1 per watt barrier. This trend will continue, with prices reaching $0.50 per watt and even lower in just a few short years.
At the same time, panel efficiencies continue to increase, making solar installations even more financially attractive as time goes on. Have they finally become cost effective? The answer is yes and no…
The 2 Biggest Markets For Solar Power
Germany and China are still the two biggest markets for solar power. The German market will grow by nearly one-third this year, and that’s in the face of less than ideal economic conditions.
All indications are that global credit is beginning to loosen, particularly for solar installations in countries where governmental subsidies exist: Germany, China and now the United States.
The United States is the dark horse of solar, with some states offering as much as 35% credits on top of the 30% federal refund. It’s no wonder that the forecasts for solar installations for this year and next are double that of last year.
The Top 5 Solar Power Companies to Invest In
Here are the top five solar companies to invest in now…
- First Solar (Nasdaq: FSLR) is the biggest player in thin-film solar panels, and is also the lowest cost producer. The company is a likely candidate for the S&P 500 and should experience a great second half of 2009.
- Evergreen Solar (Nasdaq: ESLR) is another thin-film panel maker. This company is just beginning to ramp up its manufacturing, and that’s a good thing, since it has a backlog of over $3 billion.
- Canadian Solar (Nasdaq: CSIQ) makes panels in the current polysilicon technology, but represents a great short-term (less than one-year) play in the space.
- Ascent Solar (Nasdaq: ASTI) is focused on the developing BIPV market, and as such represents a great long-term play.
- Energy Conversion Devices, Inc. (Nasdaq: ENER) makes, sells and installs photovoltaic panels and batteries for energy storage.
As I indicated earlier this week in an article about First Solar, growth will likely continue to ramp up in a big way here in the United States and by 2016 our total installed base could equal that of the rest of the world. China and India are also heavily subsidizing solar installations and will drive growth even more.
Even with all this heady growth, total worldwide energy gleaned from solar will still be less than 3%. Clearly, investing in solar power for the long term represents one of the greatest growth opportunities in our lifetime.
Just remember you heard it here first….
Good investing,
David Fessler
Today’s Investment U Crib Sheet
David Fessler has been “ringing the bell” for Energy and Infrastructure for quite some time now, and he’s been giving investors ideas across a wide range in these topics.
For example, a few weeks ago he discussed plug-in hybrid vehicles (PHEVs) in:
- AutoMakers & PHEVs: Between “Barack” and a Hard Place
A third article in it’s series:
- Is General Motors the Buy of the Decade? PHEVs Part Two
- And Plug-in Hybrid Electric Vehicles: The Only Roadblock to PHEVs.
But that doesn’t mean he hasn’t had time to defend green energy and alternative investing. Louis Basenese warned readers that too many “green” energy. investments were becoming, the largest speculative bubble we’ve ever seen. He encourages readers to look at profitable as opposed to probable companies.
David penned his response in Alternative Energy: Why You Can’t Ignore “Green” Investing.
To find out what David believes is the “cure for the U.S. economy,” read his full article on Energy & Infrastructure.
- Solar Energy: A Bright Spot In The Alternative Energy Sector
- First Solar (Nasdaq: FSLR): Stock of the Day
- Solar Energy Stocks: Experts Say This Sector Is Headed Down, Here’s Why You Shouldn’t Listen
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18 Responses to “Solar Power: The Fastest Growing Energy Source In The World”
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David Fessler is an Advisory Panelist for Investment U and The Oxford Club, one of the world’s most exclusive and prestigious networks of private investors.
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April 3rd, 2009 at 12:44 pm
Is there an EFT that has the above mentioned stocks in it?
Thanks
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Donald Ballard Reply:
August 2nd, 2009 at 12:32 pm
Here are two ETF’s for solar stocks, TAN and KWT, but check this out:
http://www.smartmoney.com/investing/etfs/solar-etf-posts-big-weekly-gains-23097/
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April 3rd, 2009 at 12:59 pm
My stock holdings include Florida Power, which is a pioneer in solar energy to feed the electrical needs of US.
Since we have owned this company of almost two decades it amuses me to see all the late comers act as if they are pioneers.
I count wind as one of the major factors in conversion of kinetic energy to electrical output. Without the sun heating air it would stagnate and be useless for generation.
Solar cells and sun heated water also play a part in this equation.
Obviously water is moved to fill damed water that feeds generation is also part of solar energy capture.
duke
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April 3rd, 2009 at 2:14 pm
What is your take on Sterling Solar?
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April 3rd, 2009 at 2:53 pm
Solar type systems are just so easy to build & install yourself, that the costs would have to go down considerably, while the efficiency increased drastically. Before commercially produced systems become really profitable,
Dr. J. D. Hooker
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April 3rd, 2009 at 3:38 pm
This is what we all need — actual information, rather than the interminable “teasers” that most financial sites use to get us to read all the way to the bottom of the file, only to see that to get the information we want, a subscription is necessary. And what better subject for actual information than solar energy, a growth industry. Thanks for a good, thought-provoking read, ending with a real list of companies to put on our watch lists. No wonder you folks are growing by leaps and bounds…
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April 3rd, 2009 at 3:45 pm
HI! VERY GOOD ARTICLE KEEP THEM COMING ITS’ AN EXCITING FIELD. ONE QUESTION,WOULD YOU RECOMMEND BUYING ALL FIVE SAY AS A BASKET PORTFOLIO OF SOLAR STOCKS.THANK YOU
RON S
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April 3rd, 2009 at 4:16 pm
Why waste time with solar. Geothermal power is just as clean and is more reliable than solar , as it is not dependant on the sun shining and the use of batteries to store power. The technology has been proven by ORMAT and other companies. Since most of the vast geothermal sites are in the western US, it would require building out a grid system for power distribution, Building the grid would put thousands back to work, so it is a winning venture all the way.
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April 3rd, 2009 at 4:54 pm
i dont know who does your research but some of your facts are just plain WRONG. evergreen does not make thin film panels. makes me wonder you your outfit is not some type of ponzi scheme.
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April 3rd, 2009 at 8:25 pm
What about XSUNX? I beleive that it was very well thought of a year or two ago
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April 4th, 2009 at 5:55 am
SOLAR ENERGY IS OUR PLANET FUTURE ENERGY, DESPITE THE FACT THAT OIL PRICES WENT LOWER THAN THE LEVEL OF 100 USD /BARREL BUT STILL THE FUTURE WILL BE FOR SOLAR ENERGY , IF WE CONSIDER THE LARGE DESERT OF AFRICA (MILLIONS OF SQUARE MILES) HAVING ENOUGH SOLAR RADIATION CAN GIVE MILLIONS OF MEGGAWATT TO SUPPLY EUROPE WITH CLEAN ENERGY BUT THIS REQUIRE A MULTINATIONAL INVESTMENTS OF BILLIONS OF DOLLARS.
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April 4th, 2009 at 12:48 pm
Evergreen Solar is NOT a thin-film solar company. They use crystalline solar grown with their “string-ribbon” tehcnology which makes them very thin but still crystalline. They aren’t sputtered like thin-film technologies.
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April 4th, 2009 at 4:23 pm
You are absolutley right! We are currently involved in installing 10 new solar farms, however getting thru the power puchase agrreements
with the local power companies need to move a lot faster in order for all of this to be meaningfull!! Especially in Markets like the Northeast! I will keep you updated as how slow it really moves!
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April 6th, 2009 at 7:05 pm
There may be a huge problem with FSLR beyond short term upward momentum of their stock. Their primary (only?) product appears to be thin film PV panels of CdTe (cadmium telluride). Cadmium is on the “highly toxic” lists of most countries and the European Union has listed it as among the most dangerous and thus most highly controlled, with a 100 PPM limit which corresponds to one part Cd in 10,000 total parts. FSLR’s panels have 47% cadmium, which corresponds to 4,700 parts in 10,000 total parts. Tellurium is also toxic. Additionally, tellurium appears to be in very short supply worldwide, thus bringing into question the ability of FSLR or any other company to produce products based on it. Unless FLSR succeeds in obtaining an examption from the EU toxicity standards (RoHS directive), FLSR could find itself unable to market its product.
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April 7th, 2009 at 3:14 am
I am a financial advisor in China. Currently, China is the one of the biggest country involve the solar industry. At the moment, the environment protection is a big problem because of the solar facilities producing. What I have heard from the Chinese government is to develop more Wind Energy rather than Solar. Since this year, all the new investmenet for the projects which needs to consume more power has to achive the Wind Energy Power Plant. Personally, I do not see Solar Energy could has a bright future. It just a principle for the stock market.
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April 11th, 2009 at 11:14 am
OK, we have solar power opportunity. That’s great on a nice sunny day, most likely in the spring and summer. And for sure you can store some of the electricity generated, possibly for a few hours. However, the capital expenditure for gas fired electrical generation currently in place requires X amount of capital which has or will be put in place. That capital cost has been amortized over a 24/7 timeline 365 days a year. For sure there is up and down demand, but those numbers are built into the business model and formalized over a twelve month period. When those power generation businesses are called upon for only say 10 hours of operation production daily, what happens to the cost of that power when considering the repayment of their capital for the initial production? When factoring in the government rebates etc. for solar, or other alternative energy, no one mentions that the overall cost to the consumer is probably going to double over the next five years to accomodate these new technologies. So, every household, even those with incomes of only $20,000 per year will be adding at least $100 per months to their expenses. Where does that money come from?
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April 29th, 2009 at 9:09 am
I am convinced by this important message but I need funding and technology resources to start the programe.There is enough sunshine in Uganda but it needs investment.
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December 11th, 2009 at 7:12 pm
excellent information please send solar energy
information many thanks
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