Solar Stocks Coming Back

Jeff Siegel

Written By Jeff Siegel

Posted March 6, 2013

modern energy report

Here’s Deutsche Bank’s latest comments on the state of the global solar market:

“We see the sector transitioning from subsidized to sustainable markets in 2014.”

That’s a bold statement, and one that’s sure to agitate solar haters.

But that’s not our concern. Our concern is simply when it will be safe to jump back into the solar game.

According to analysts at Deutsche Bank, margins will rebound and profitability will return in the second half of this year. This is something we’ve been saying, too — although I suspect it’ll be more towards the end of the second half of the year before we see enough consistency in production numbers to let the bulls back out of the pen.

In the meantime, I find Deutsche Bank’s call on subsidies quite interesting. Because quite frankly, if they’re right…

This Changes Everything

Deutsche Bank recently raised its 2013 global solar demand forecast to 30 gigawatts. This represents a year-over-year increase of 20%. Analysts say much of this will come as a result of strong demand in the United States, China, Germany, and India.

Interestingly, India’s Ministry of New & Renewable Energy recently said India increased its renewable energy capacity by 12.4 gigawatts in the past three years, taking its total up to 26 gigawatts. This puts the Asian nation just four gigawatts shy of its 2017 goal of generating 30 gigawatts of power from renewables.

Of course, this should come as no surprise, as India is desperate to integrate more non-coal-fired power generation due to pollution issues and supply shortfalls.

As I mentioned last year, it’s becoming increasingly difficult for India to secure coal supplies. The Economist actually reported that by 2017, domestic coal production in India will meet only 73% of demand. The country’s already spent $7 billion over the past six years  acquiring outside coal pits in Australia and Africa.

India is in dire need of expanding its power portfolio to include less-pollutive sources, too. Last year, India was ranked as having the world’s unhealthiest air pollution, according to a Yale study.

It’s also worth noting that in India, solar has already reached grid parity — and that’s with the high cost of capital.

That, my friends, is likely the main reason you’re going to see the Indian solar market grow significantly over the next decade.

Clearly this is enough to make the folks over at Deutsche Bank quite bullish on India solar expansion. And Deutsche Bank isn’t the only major player warming up to solar…

A Mainstream Source of Power

Earlier this year, analysts at investment bank UBS put out the following statement:

Solar has turned from a heavily-subsidized marginal technology into a mainstream source of power generation. Thanks to significant cost reductions and rising retail tariffs, households and commercial users are set to install solar systems to reduce electricity bills — without any subsidies.

UBS analysts have estimated there could be 80 gigawatts of unsubsidized solar installed in Germany alone.

Of course, Germany has been the leading catalyst for global solar growth for more than a decade now, thanks to an aggressive feed-in tariff scheme.

Today, Germans get about 25% of their power from renewables. In fact, thanks to a strong solar contribution, solar power now regularly provides significant power to meet peak demand.

Check it out:

peakchartsolar

This kind of diversification offers an enormous amount of flexibility, particularly during the summer months.

Coming Around the Bend

So, what does all this mean?

Well, for consumers it means that for the foreseeable future, the price of solar installations will continue to fall, making it more affordable for folks to generate cleaner, domestically-sourced power without relying solely on the grid.

For investors, it means we’re coming around the bend on solar’s dark days — and by the end of the year, it could be safe to jump back in these waters.

The major cell and panel manufacturers will be the most obvious route to take, but we’re also staying diversified with solar technology plays.

In fact, my colleague Nick Hodge is very bullish on one little solar tech firm that boasts a unique technology with the potential to make solar cheaper than coal — while doubling power output.

To get complete articles and information, join our daily newsletter for FREE!

Plus receive our new free report, Solar Investing 101

E-mail Address:  
We never spam! View our Privacy Policy

Energy & Capital Members Receive:

  • Daily commentary and advice from energy investment experts.
  • Access to some of the best oil, gas, and cleantech stock picks around.
  • Foresight on how the future of energy will unfold.

Although this may not be the most mainstream way to play solar, it could prove to be the smartest…

And let’s face it; that’s all that matters.

To a new way of life and a new generation of wealth…

Jeff Siegel Signature

Jeff Siegel

follow basicCheck us out on YouTube!

follow basic@JeffSiegel on Twitter

Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.

Want to hear more from Jeff? Sign up to receive emails directly from him ranging from market commentaries to opportunities that he has his eye on. 

Angel Publishing Investor Club Discord - Chat Now

Jeff Siegel Premium

Introductory

Hydrogen Fuel Cells: The Downfall of Tesla?

Lithium has been the front-runner in the battery technology market for years, but that is all coming to an end. Elon Musk is against them, but Jeff Bezos is investing heavily in them. Hydrogen Fuel Cells will turn the battery market upside down and we've discovered a tiny company that is going to make it happen...

Sign up to receive your free report. After signing up, you'll begin receiving the Energy and Capital e-letter daily.