Editor's Note: This article originally ran in Energy & Capital, but given the relevance of the topic and the current volatility of the market, I wanted to alert the Green Chip community to its message. Enjoy.
Over the past few months, and particularly over the past few days, solar stocks have been beaten down to previously unseen levels.
One look at the share prices of solar energy stalwarts is enough to leave anyone who's been paying attention absolutely awestruck.
And it's not that hard to figure out what's been going on.
Earlier this year, solar stocks began selling off along with the broader market as a result of Wall Street deregulation and greed that led to a mortgage mess, kicking off a credit crisis that has led to the collapse of numerous storied financial institutions.
All that has been drilled into our heads for months.
The solar sector was certainly not impervious, and fell victim to rampant selling, as did most sectors of the market.
Here's a six-month chart of some solar juggernauts:
Pay close attention to the widespread selling in October and again in November. For me, this is the most startling part of the graph because, no matter how you look at the numbers, there is no way these companies lost more than half their inherent value in two short months.
Sure, market conditions are bad. But sales forecasts surely haven't been slashed more than 50%. Neither have profit forecasts.
Though some solar companies have moderately trimmed their outlook for late 2008 and early 2009, it certainly wasn't enough to justify these egregiously low share prices.
So what we have is a particularly acute oversold situation, and a few well-positioned companies are begging to be bought and held onto for major profits.
Solar Forecasts Remain Strong
Given the rosy growth forecasts for the future of the solar industry, the recent sell-off is both illogical and irrational.
Just consider the following raw data offered by Forbes in a recent feature article:
- the crystalline silicon-based solar market will grow from a 3.5 gigawatt market today to a 13.8 gigawatt market, a growth of 294% in the next four years
- the amorphous silicon market will grow from 550 MW today to 2.8 GW in 2013, a growth of 409% in the next four years
- the cadmium telluride (CdTe) market will grow from 480 MW today to 2.4 GW in 2013, a growth of 400% in the next four years
- the thin film market based on CIGS and CIS, copper indium gallium selenide and copper indium diselenide, respectively, will grow from a 41.3 MW market today to 1.2 GW in 2013, a growth of 2,806% in the next four years
To be clear, each of the main four solar sectors are predicted to grow at least 294% over the next four years. The fastest growing sector, CIGS and CIS, will grow an astounding 2,806%.
Traditional energy sectors look like children's playthings when considering this type of growth.
Per the IEA's recent World Energy Outlook, oil demand will grow to 106 million bpd up from 85 million bpd this year.
That's a 25% increase over the next 22 years. Solar is offering no less than 294% and as much as 2,806% in the next FOUR!
Where do you want your money?
What's more, that 25% increase in oil demand won't even be able to be met with traditional black gold. We'll be well past the peak by then. So a portion of oil's future demand growth will have shifted onto renewables.
Even better, the IEA report also said that "Renewable energy... such as solar... will overtake (natural) gas to become the second largest source of electricity behind coal by 2015."
The situation couldn't be any more clear.
The time is now to invest - and invest heavily - in renewable energy technologies. They're certain to be the companies powering the globe for many decades to come.
Solar Stocks: Time to Buy
That's why, late last week, I sent a special alert to the readers of my Alternative Energy Speculator, telling them I'd compiled a report on the five solar stocks that will not only survive these troubled times, but that will go on to provide bountiful returns.
This group of solid solar stocks has it all, including thin film solar manufacturers, raw materials providers, and silicon ingot and cell producers.
By the end of the week, each of the five stocks were up. Four were up in double-digit territory.
And this is at a time when the market is as shaky as an old rope bridge and solar stocks are getting bashed left and right.
Yesterday? Each of the five stocks ended the day higher than my recommendation price again.
That's exactly why I chose these stocks. I knew that given their already oversold state and the high growth estimates for the next couple of years, smart investors would have to start buying them.
You absolutely need to be buying them as well.
Given the grim situation painted by the IEA's report and the forecast for some sectors of the solar industry to climb nearly 3,000% in the next four short years, there is simply too much upside not to be a part of it.
All you have to do is join the ranks of other investors who read the Alternative Energy Speculator.
When you do, you'll receive the detailed report, Five Solar Stocks for Turbulent Market Times. It contains everything you need to know to start profiting from these carefully selected and researched solar investments.
You'll also get access to numerous other reports about how to profit from other sectors of the alternative energy markets.
And we'll ship you a FREE copy of the book, Investing in Renewable Energy: Making Money on Green Chip Stocks, which I co-wrote with Jeff Siegel and Chris Nelder.
Call it like you see it,
PS. I'm in New York this week taking in all the data and investment analysis being presented at the first annual Greentech Innovations conference and symposium. It's only been a day, and I'll have a full write-up for you upon my return. But a few new facts are just too good to wait for, such as:
- Renewable energy has accounted for 23% of new global power capacity since 2005.
- Grid-connected solar grew over 60% on average every year from 2002-2006.
- Thin film solar will be manufactured for less than $1.00 per watt in 2009.
- Geothermal sources will be producing over 171,000 GWh (That's GIGAwatt hours!) by 2020.
There are plenty more, and I'll get to them all next week. Ultimately, I'll be turning what I learned at the conference into renewable energy gains for my readers. And believe me, I already have a number of new plays in mind.
In the meantime, be sure to become one of the investors who gets these kinds of tips and data... week in and week out, not to mention the five stock solar report and the free book, by joining the Alternative Energy Speculator today.