Billion-dollar plans for California Solar

Written by Brian Hicks
Posted January 11, 2006

Dear Wealth Daily Reader,

A few weeks ago, I told Green Chip Stocks members that the California Public Utilities Commission (PUC) approved the first phase of the California Solar Initiative (CSI) which makes $300 million in funds available for 2005 and 2006 solar projects through its Self Generation Incentive Program.

This is triple the amount of funding that was originally allocated for 2006.

But compared to the funding that could be approved tomorrow, $300 million is chump change.

You see, tomorrow is the day that a larger CSI proposal will be voted upon. And this one is worth billions! That's right - Billions.

If the proposal is approved, the PUC will provide $2.5 billion in customer incentives for solar projects for public buildings, agricultural facilities, industrial facilities and existing residential buildings.

The California Energy Commission would also provide $350 million of incentives for new homes. Gradually reduced over time, the incentives would phase out by 2016.

This is big news for the solar industry.

(By the way, my favorite solar stock is right in the entire mix. Today, the company announced "it has begun the construction of a mass production system for the manufacture of the Company's proprietary thin film solar cell designs."

These "thin film solar cells" are what make up the company's "solar window". This is huge, and another milestone for the company. And the stock seems unstoppable. When I recommended originally to my readers, it was trading for $0.36. Today, it's just shy of $0.80. Get in now before it breaks above $1.

To read why I think this stock is headed to $5, see: [Endless Energy]

If the vote passes, I expect to see yet another influx of investment dollars pouring into solar…increasing the momentum in California that is already unstoppable.

In fact, just last month San Diego Gas & Electric (SDG&E) moved one step closer to achieving its goal of supplying 20 percent of its customers' needs from renewable resources by 2010 when regulators gave their approval for a power purchase agreement with Stirling Energy Systems.

Under the 20-year contract, SDG&E will purchase 300 MW from Stirling's SES Solar 2 facility (an area home to a series of solar dishes that will be developed on roughly 3 square miles in Imperial Valley, CA).

This particular project is expected to be one of the largest solar facilities in the world once it's full constructed, as well as the first commercial deployment of Stirling engine-based solar concentrators.

While we don't hear about concentrated solar as much as photovoltaics, there's approximately 354 MW of Concentrating Solar Power (CSP) capacity in the American Southwest - which, by the way, represents the majority of installed capacity in the world.

Of course, while California has clearly taken the lead in renewable initiatives (it is also the third-largest market for solar PV in the world) - there are a number of other states moving forward with their own state-based initiatives as well.

State of the Solar Nation

As you're well aware, federal tax credits for renewables kicked in on January 1, 2006. But individual states are now offering up some pretty impressive incentives as well.

Look at New Jersey for instance…

Through interconnection standards, simplified net metering and financial incentives, the state has seen a 550 percent, three-year growth in the state's solar market.

And in an effort to promote and utilize indigenous energy resources in Pennsylvania, Governor Edward Rendell signed an executive order in 2004 to revitalize the Pennsylvania Energy Development Authority (PEDA), which provides financing for a wide range of energy research and development programs.

Since then, PEDA has awarded $10 million to help finance 17 different clean energy projects in the commonwealth.

Even the Western Governors Association, which covers 18 states has committed to developing 30 GW of clean energy by 2015 in a program that could lead to a major expansion of PV in its member states.

Overall, every state in the U.S. offers some type of financial incentive for renewable energy. And this is not a trend we expect to see slowing down anytime soon either.

The fact is, between federal and state-based renewable initiatives, energy investors have never been in a better position to load up in the renewables sector.

If you haven't staked your claim yet, there are a number of opportunities for 2006. Opportunities that you can read about in my free Green Chip Review. (Click here to sign up)

Until next time...

Jeff Siegel
Editor, Green Chip Stocks

P.S. - Solar opportunities are obviously not just limited to U.S. markets.

Just yesterday it was announced that by April, South Korea will start construction on the world's largest solar power facility, capable of generating 17 megawatts of electricity per hour. And while Japan's Sharp Corp. will provide the components for the facility, U.S.-based Sunpower Corp. (SPWR.Nasdaq) will be designing and installing the facility.