Solar panel stocks are at a major crossing point.
In 2008, record oil prices caused a big push for clean energy. Demand for polysilicon drove prices up and producers' share prices went along with them. Those who controlled the bulk of the supply chain and buffered themselves against price spikes were able to make the most out of the panel-price runup.
Then oil and the global economy fell off a cliff.
Now, solar panels are down from $4.20 per watt to just over $3... a 30% drop.
The Silicon Key for Solar Market Success
Computer sales are abysmal and could get weaker deep in the worldwide recession, and the virtual halt in microchip production means silicon is far into oversupply.
The gears of consolidation are turning, though, with the recession putting semiconductor manufacturers out of business and leaving industrial-grade silicon in the hands of fewer and fewer firms.
"When this recession ends," The New York Times's Bits blog forecasts, "the chip industry that emerges on the other side will look rather different than it did heading into this thing."
We don't have to wait for the recession to end for that transformation...
The government of Taiwan just announced on March 5 that it will set up an island-wide Taiwan Memory Company, which will crank out DRAM chips for phones and household gadgets, under the auspices of the country's economic ministry.
If Taiwan Memory Company can kickstart global semiconductor production (as the nation is disproportionately powerful on the international semi scene), which will then flow into a stimulated computer market, silicon prices could go back up quickly.
In that scenario, companies that used their vertical integration strategies to pick up lower-priced silicon will watch their competitors get squeezed in the spot market.
Oil prices are creeping back up, and major government incentives mean that solar panels are doubly attractive—costing a third less and heavily subsidized as part of various countries' stimulus packages.
We may be near a bottom in polysilicon and oil at the same time, and solar panel prices are set to recover fast.
$1.76 Million Per Megawatt
That's the going rate for wind energy.
And in the next 10 years. . . over 446,000 megawatts will be installed.
That presents a market worth $785 billion.
Click here to learn about 3 stocks that will easily double as that happens.
The 20 Year Solar Panel Market Guarantee
Expectations have been tempered across the global equity market, with earnings and forecasts settling deeper into a prolonged funk. Caution is the key for both lenders and project heads.
Yet we're hearing about credit loosening up for renewable energy projects in Europe, where the state development bank of Germany, KfW, is stimulating solar production through '09.
The only catch is, the solar panels used to reach Germany's expected 2+ GW of installed capacity in 2009 will have to last 20 years or more...
Fine by us! Top producers like Q-Cells issue standard warranties of 20 years or more, with panels operating at greater than 3/4 capacity throughout that time.
Tight lending has forced Q-Cells and other producers to get their industrial bona fides in order. The ones who can't prove their cost advantage and come up with solid payback plans simply won't get loans, and their blueprints will get snapped up by the survivors... if those plans are deemed worthy of continuation by the remaining larger, more creditworthy firms.
At its root, a warranty is a pledge from producer to consumer.
In 2009, though, a warranty as much a handshake between creditor and debtor as it is anything... think of all the fright surrounding Detroit automakers and whether the Pontiac you buy today will be free to fix if GM goes under. GM can't sell cars because it can't stand behind them, and lending to GM is too speculative if new sales aren't picking up.
It's not a vicious circle—it's a vortex. And it's sucking in company after company, in nearly every industry.
No one wants a shoddy solar panel either... Not utilities like Germany's E.ON, who want to buy excess capacity from companies and households with installations, and certainly not the home and business owners who are tapping investment tax credits and want energy savings to put them at parity with coal or gas-generated electricity.
For us investors, though, it's even more important to know there's a two-decade time horizon for quality clean energy stocks.
That's the warranty you need, even if you don't think a single solar panel will ever sit on your rooftop.
And if you're looking for solar stocks that pass the 20-year test, take a look at some of the Green Chip International portfolio stocks we've picked precisely because they've got the goods to make it through this recession and beyond.
http://www.angelnexus.com/o/web/11161
Regards,
Sam Hopkins
International Editor
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Our hedonist energy waste is culturally pervasive, and abominable !
(1) 100's of millions of lights burn unnecessary during the day and night.
(2) We over heat and over cool our homes, businesses, offices,
schools, churches, etc... (government buildings waste the most).
(3) Recycling is inadequate. Our landfills are busier than ever.
Over packaging is the norm. (Plastics are the ultimate polluter).
(4) Most Americans do not minimize their driving. Road congestion is horrendous.
(5) America's obsession with road construction is the ultimate contradiction.
The only way to eliminate over demand and energy waste is by using the
economic impact of taxing energy. Crude oil needs to be taxed at $200
per barrel(55 gal) and 'offset' by making Federal Income Tax begin at $60k.
Only with a substantial and tangible dollar reward/consequence, will
Americans care to conserve. Until the price of gas is $7 to $8 per gallon,
Americans will not reduce their over consumption and energy waste.
In the mean time, the USA continues its hedonist energy waste and gives away
its economic and political wealth to the Islamic Middle East via OPEC.
Know that the Islamic dominated OPEC cartel is glad to allow
supply and demand market forces to drive energy prices to $8/gallon.
China, India, and other 'developing countries' have just begun to
compete for the world's remaining fossil fuel. If global demand for
energy is not dramatically reduced, World war is inevitable
( geopolitical unrest is directly related to global competition for
energy and natural resources ).
Ford and General Motors are headed for bankruptcy, which will leave
100,000,000 Americans unemployed, ruin our economy, and lead to
anarchy. America can no longer continue to 'do business as usual'.
Ford and GM must quickly transition to the lucrative business of
building solar and wind 'energy producers' for the world's 6.7 BILLION
people reason$. The world cannot continue to support all the
automakers. We are running out of petroleum !
Mass transit must become FREE, SAFE, CLEAN, and CONVENIENT,
thereby rewarding those who reduce their driving.
Global warming continues to increases with our persistent waste and
overuse of fossil fuels.
The incentives necessary to create sustainable and renewable energy supplies
can ONLY occur when we implement the economics of TAXING ENERGY.
Michael Knight, PhD Energy Conservation Policy
solar PV this year. We have it, it works and I am forecasting a result that will change how we think about solar and other forms of energy production for the next 2-3 decades, maybe longer.
Don't count your wind farms or your
profits before you their built.
You heard it here first.
Green Earl, Founder
American Energy Conservation Group
yeswecansolvit