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Time to Buy Solar



November 25, 2009 – Comments (2) | RELATED TICKERS: FSLR , ESLRQ.DL , CSIQ

To truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy.

Barack Obama, United States President

I’d be investing in clean, renewable energy. The big new fortunes of the future are going to be made by those who develop alternatives to burning fossil fuels.

Ted Turner, billionaire business man

November 2009 

Solar energy has been an idea that for years has been talked about as a potential source of cheap energy for the nation.  The dream is for clean energy, limitless, not owned by any corporation (except in Southpark) and with a low cost to harvest.  The problem with the dream, is that the final part has still never been realized.  Solar power, even with major breakthroughs is still not as inexpensive as natural gas or coal, and hence runs into a major constraint to implementation, that is, people's budgets.  Recently however, there have been more advances in solar energy that put us on the verge of wide-scale implementation of solar power across not only the nation, but the world. 

The Sun 

The sun produces about 1350 Watts per square meter (called the solar constant) as it hits the planet.  In one day, enough solar energy hits the planet to provide all of the energy that all the people and industry in the world need for years at current conversion rates using only rooftops to do the collection of the energy.  That's right, even at today's efficiency levels for collecting solar energy, we have the ability, simply by installing solar on rooftops, to supply all of the electricity all of humanity uses. 

Where Has Solar Power Been

Interestingly, in the United States, we have been using solar water heaters since the 1890s (no typo).  Approximately 20% of homes used solar water heaters in the desert southwest during the early 1900s.  However, in the 1920s, large deposits of oil and natural gas were found.  Mass conversion to fossil fuels then essentially killed the solar industry for forty years.

By the 1970s solar began to make a comeback as the oil shocks rocked the nation.  However, the technology was far too expensive at the time to be worthwhile, especially after United States deals with Saudi Arabia drove oil prices back down.

In the late 1990s, after two decades of renewed research and development, solar energy started becoming feasible on a mass scale.  When the cost of clean up was included in fossil fuel energy production, the cost gap between fossil fuels and solar was recognized as not being as insurmountable as fossil fuel producers would have people believe.  

Solar Power Today

Gathering momentum in the 2000s due to technological breakthroughs and venture capital, solar power started reaching the efficiency levels necessary to begin a real debate on what energy policy should look like going forward.  Today, efficiency levels for solar power in the lab are almost equal to the anticipated cost of natural gas fueled power plants and the cost of coal fired power plants when clean up costs are included for the coming decade.  We are at least several years from mass production being able to deliver those products cost efficiently, however, it is clear that fossil fuels are about to have a cost competitive limitless clean energy alternative. 

Solar For Kids

Solar Timeline

Solar Energy: New York Times reports

Solar India

Solar Power News

Solar Power International Convention 2009

Companies I like:

First Solar, FSLR: Obvious choice du to market leadership.

Evergreen Solar, ESLR: High end technology and exploiting both China and German connections.

Canadian Solar, CSIQ: North American and Chinese operations, about a break even company already.  Stock is probably overvalued for traders, but a long term average in buy.

There are plenty of others.  Du to the volatility there will be good buying opportunities over the next few years for accumulation before many turn highly profitable.   I own PBW for broad exposure, but am researching some other ETF options as picking the company winners will be tougher than knowing the sector will du well.

2 Comments – Post Your Own

#1) On November 25, 2009 at 12:19 PM, rofgile (99.60) wrote:

Cheers, good call.  Solar is heavily knocked down at the moment.  I don't know if it is a "bargain" yet, but we could be on the brink of a great buy-in time. 

Perhaps for some (FSLR) now is the right time to buy.


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#2) On November 25, 2009 at 12:37 PM, JaysRage (80.65) wrote:

Wind is just now making its move in terms of stock prices, so I'm not close to ready to make a move to solar yet.   I think there is a great deal of consolidation to occur and operational implementation of the newest technologies are still a challenge.  There is plenty of time to get into solar, and I think it might go further down before it goes up.   I still like Wind for now.   I'm beginning to look at solar, though.    In the next 12 months, I think there will be a great opportunity in solar, but I don't think the real money will come for a few years yet.   For now, I'm waiting and watching.  

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