Welcome to the Energy and Capital Weekend Edition — our insights from the week in investing and links to our most-read Energy and Capital and sister publication articles.
Despite getting caught up in this week’s turbulence, solar stocks have been on a tear lately:
Several stars are aligning for the industry, and I’d like to highlight those before moving on to the relevant news.
For starters, the solar market has now recovered from the oversupply that was 2008. The solar ramp-up commenced just as the recession began, causing inventory to pile up… but that has now been worked through and the supply/demand balance, restored.
Prices have also been falling, thanks to stiff competition from the Chinese. According to Sharp Solar VP Ron Kenedi, the cost of a solar system has dropped 35%-40% in the past 14 months.
The market has also taken root — as most do — because of incentives. Widespread feed-in tariffs in Europe and a 30% Treasury Grant Program in the U.S. have done well to foster solar demand.
It’s all led to robust growth for the sector, driven by the solar thirst of homeowners, businesses and utilities. There were 33,000 residential solar installations in 2009 — a 40% increase over the previous year — And utility-scale projects grew 267% in the same time.
Falling prices and incentives have sparked global demand for solar… and are leading to record profits for solar companies and their investors.
Solar projects are reaching a point where a chain reaction is inevitable.
Hardly a day goes by that a utility — even conservative, coal-centric utilities — doesn’t announce a new solar project.
From the just-announced 20 MW traditional PV plant in Pilesgrove, NJ…
To the 370 MW solar thermal plant being built by BrightSource in the Mojave Desert (pictured)…
A conga line of solar projects are being planned and constructed — each one bigger and more advanced than the last.
It’s why the solar market is expected to grow tenfold by 2014.
Selected solar news
Earnings season is here and most solar companies are anticipating good reports.
A number of banks and analysts have upgraded solar stocks in the past few days, and it’s probably worth picking up some shares before the companies report in early November.
Some companies, like LDK Solar (NYSE: LDK), are saying outright just how good the market is right now. It’s already raised its outlook for third quarter revenue and wafer shipments, and said this week it expects a strong order book for 2011.
According to chairman, CEO, and one of the world’s youngest billionaires Peng Xiaofeng, “In 2011 the market is very bullish and we have received a lot of orders especially in the first half of the year. Demand is very strong across the world.”
Remember, this is still an infant market… The electricity market is still dominated by coal and natural gas, which means there is plenty of market share to steal — and plenty of profits to be made.
And that’ll be much easier as the technology improves. We’re already seeing it evolve at breakneck pace.
Traditional panels are constantly increasing in efficiency; thin film is allowing us to build solar right into building materials or roll it out on flat roofs; and solar thermal and concentrating photovoltaic (CPV) are allowing utilities to generate more and more electricity in less and less space.
The next-generation will be even better…
MIT just unveiled paper-thin solar cells — literally.
The MIT lab, run by Karen Gleason, deposits five layers of nanomaterials on paper to make a solar cell that generates power. Gleason anticipates solar lampshades, window blinds and drapes, and flexible solar strips for DIY home projects.
When asked when the technology will be commercial, she said, “I think five years is not unreasonable.”
But you can invest in the technology now. Through a partnership with MIT, it’s owned by Italian utility Eni (NYSE: E).
You can catch up on the rest of this week’s investment ideas below.
Call it like you see it,
Urgent Alert: Learn about this Game-changing Energy Play Before the Rest of the World Does
Alternative energy guru Nick Hodge has already been right about this company twice in the past… And as this game-changing nuclear outfit gets ready to change the world of energy, you don’t want to miss out on this opportunity.
Friedman Was Right; The World Really is Flat: Creating Jobs in a Global Economy
Editor Steve Christ takes a look at the global economy and how to create jobs here at home.
I Think I’m Turning Japanese: When Ninjas Riot
Editor Christian DeHaemer tells readers why the Japanese yen is overvalued, the Bank of Japan is set to destroy it, and how you can make money as a result.
Banana Republic Chronicles – Mozilo Gets a Slap on the Wrist: Crime Pays if You’re in this Club
Editor Steve Christ looks at the state of the banana republic as folks like Angelo Mozilo laugh all the way to the bank.
Avoid Banks Like the Plague, Buy Tech: Mystery Meat Balance Sheets Cloud Banks’ Future
Analyst Adam Sharp is steering clear of financial stocks, and sticking with solid tech and commodity plays.
China’s Rare Earth Lie will Cost You: China‘s Horns of a Dilemma… and You
Editor Ian Cooper argues China’s startling rare earth claims in the latest Bloomberg report.
Behind the Battery Stocks: The Only Thing Hotter than China
Editor Nick Hodge discusses the battery market and the effect rare earths will have on battery technology and investments.
Solar Market Developments: How to Land Big Gains in Solar Stocks
Editor Jeff Siegel discusses new developments in the solar market.
Five Trends for Q4: Climb the Wall of Worry
Editor Christian DeHaemer gives readers five trends for Q4 this year and tells investors how to profit from the Wall of Worry.
A Cold War Blunder: How to Bank 180 Times Your Money
This Mongolian oil stock has been flying ever since we recommended it. This is just the beginning of what could turn out to be a HUGE run. We’re talking thousands of percent gains here. Read the full report now, before this outfit’s share price hits the ceiling.
The Definitive Guide to Gold Dividend Stocks: Top 3 Highest-Yield Gold Dividend Stocks on the Market Today
Analyst Luke Burgess gives investors a current perspective of gold dividend stocks and reveals the top three highest-yield gold dividend stocks on the market today.