Energy Stock Bull

On the Bright Side
Low stock values for solar companies may prove to be a good investment opportunity in the long run as renewable energy sources are likely to have an increased demand in the future.

The United States solar market is expected to have more government support under the Obama administration compared to the Bush administration. Mr. Obama has set a goal to generate 25% of the United States energy from renewable sources by 2025. This is a big goal considering that currently less than 10% is from renewable sources, including hydroelectric power. If this goal is realized, renewable energy sales will soar. To further boost the industry, the renewable energy tax credits that were set to expire at the end of this year were extended and in some cases expanded.

On the Downside
Solar development that depends on financing may see hurdles under the current credit crunch, temporarily slowing the rapid growth the industry has experienced. Because the price of certain fossil fuels such as oil and natural gas have recently declined, it is more difficult to obtain financing in the short-term. Hopefully, price drops won’t take attention off of the finite quantity of fossil fuels that is dwindling at this very moment.

Wind energy might be the simplest renewable energy to understand. Yet there are misconceptions about what makes the wind industry turn.

The United States now has nearly 17,000 megawatts of wind power installed, which can supply about 1.2 percent of the nation’s demand for electricity, according to a recent report from the Department of Energy (DOE).

With these numbers projected to grow in the coming years, it might be good to be aware of a few myths that are blowing in the wind.

1. Wind is cheap

No one owns the wind, so it might seem like wind energy should cost less than other technologies that require costly fuel, such as coal or natural gas, to operate.

However, the initial investment for wind energy is high. Large scale wind turbines cost a few million dollars per megawatt to put up, which at face value appears competitive with new coal-fired power plants, but the wind doesn’t always blow. In effect, wind turbines typically only produce electricity about 30 percent of the time, so it takes longer to pay back the building costs.

Taken together with government incentives and maintenance costs over a turbine’s 20-year lifetime, wind energy ends up costing about 4 cents per kilowatt-hour, according to DOE estimates. That’s slightly more than coal, but the two are getting closer all the time.

Read the rest

Solar panels have been in short supply since 2005 because silicon, a key component of photovoltaic solar panels commonly installed in homes and businesses, was limited.

With the federal alternative-energy investment tax credits set to expire Dec. 31, installers and manufacturers have reported a spike in demand for solar panels this year.

“It’s almost a man-made shortage because everyone is scurrying around to get their jobs done before the tax credits expire,” said Ron Kenedi, vice president of Solar Energy Solutions Group for Sharp Electronics Corp., the largest maker of solar panels. Read the rest

My friend over at Bullringer.com posted this chart on LDK; looks like a solid breakout on heavy volume. I may buy some and let it run, depending on the price action over the next couple of days.

Eponymous big-box colossus IKEA has shown some great green developments lately, from flat-pack bike trailers to eco-friendly lines of housewares. Now the patent purveyor of all things flat-pack has announced plans to invest $77 million into its GreenTech energy fund with the goal of eventually producing solar panels, efficiency meters, and energy efficient lighting. Granted its massive distribution network, IKEA’s uptake of green tech could pose a monumental shift in the accessibility and affordability of these technologies.

As far as big-box retailers go, it’s hard to dispute the sphere of influence that IKEA casts over the world market. Striking a golden balance between quality and affordability has allowed the furniture giant to build an extensive network of 270 stores in 35 countries, attracting half a billion customers every year. IKEA’s recent investment is exciting because it stands to mobilize these massive distribution channels towards the proliferation of green technology.

IKEA’s GreenTech fund was established eight months ago and is looking to invest in up to ten startups over the next five years. These investments will focus in five key areas: solar panels, alternative light sources, product materials, energy efficiency, and water saving and purification. IKEA hopes to bring its first wave of green tech products to market within three to four years.

Via CleanTech Group and environmentalleader.com

Photo Credit: VeryBigJen

First Solar, Inc. is holding up despite the horrible recent market conditions. It’s held recent gains and closed above the 50 DMA for about a week straight. Any close above the upper resistance could trigger a buy and an upward breakout. Definitely keep this one on your watchlists.

Came across this article on triplepundit.com regarding some future Japanese initiatives to help boost solar consumption in their country. Tax credits and subsidies = wider adoption = more consumption; always a good thing for green investors.

The Japanese government will introduce tax credits and subsidies to encourage household use of solar energy starting next year. The details will be determined in August when the budget is created. The incentive will decrease the cost of a solar photovoltaic system by an estimated 50% within 3 to 5 years.

Japan & Energy
The country imports a majority of its energy. Japan has virtually no oil or natural gas reserves within its borders and is the 2nd largest importer of crude oil. All of the coal used within Japan’s borders is imported. With 55 nuclear reactors, Japan has the 3rd largest generating capacity behind the US and France.

A mere 9% of Japan’s electricity is generated from hydroelectric power and a majority of the sites with good generating capacity have been exhausted. Although this is the main source of self-sufficient electricity, significantly expanding production is not an option.

Japan’s Climate Change Initiatives
Prime Minister Yasuo Fukuda has shown interest in combating climate change and will be the host of the G-8 summit in August. Japan set a long-term goal of reducing carbon emissions by 60%-80% by 2050. Although the public supports reducing greenhouse gas emissions, Japan is currently not on target to meet the goals created in the Kyoto Protocol. Solar energy can help reduce the production of electricity from fossil fuels, thus reducing emissions.

(via triplepundit.com)

First Solar (FSLR) broke through support at the 50 DMA, but looks like it might be ready for a recovery:

Canadian Solar, Inc. (CSIQ) recently saw a huge jump up following a great earnings report. After filling the gap, it looks like the stock is reading to continue heading higher:

For those of you who are looking to buy into the solar market but don’t know which stock to pick, TAN is an ETF I came across recently that will help diversify and limit your exposure to individual companies.

From Yahoo Finance:

The investment seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the MAC Global Solar Energy index. The fund normally invests at least 90% of total assets in common stock, ADRs and GDRs that comprise the index.