Survey Says Alt Energy to Outperform Market, Storage Stocks to Lead 14 comments
Charles Morand
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The public relations firm Waggener Edstrom released a survey of investors and analysts seeking opinions on what was in store for alternative energy for 2009 (link to the survey at the end of this article). Of the 81 respondents, 47 were institutional investors, 26 were brokerage analysts, five were from independent research firms and three were classified as "Other industry participants". Overall, 58% of respondents were from the buy side, 32% from the sell side and the remainder from "Other". Here are a few tidbits that caught my attention.
Storage: The Next Boom?
Overall, 50% of respondents expect alternative energy stocks to outperform the market in 2009 because of Obama's policies. Survey respondents are most bullish on energy storage stocks (including battery stocks) and wind stocks, with 43% believing that they will perform above or far above average (other categories include: biofuels, hydrogen & fuel cells and solar). Energy storage edges out wind in terms of bullishness with 15% of respondents believing storage stocks will perform far above average in 2009 (vs. 8% for wind).
This is an interesting development in my view and probably borne out of the recognition that, without significant technological improvements and cost decreases in storage technologies of all scales, alternative energy deployment will eventually plateau.
Unsurprisingly, biofuels receive the most bearish assessment with nearly a quarter of respondents believing the sector will perform far below average this year.
It's The Policies, Stupid!
When asked: "How do you think the following factors / variables will affect the performance of alternative energy stocks in 2009?", 38% of respondents say the Obama administration will have a very positive effect on the sector (1st overall choice), while 33% say government incentives in the U.S. will also have a very positive effect (2nd overall).
Access to capital is viewed as having the most negative effect (33%) on alternative energy stocks, followed by oil and gas prices (14%). When asked: "Generally speaking, public interest and commercial investment in alternative energy will (continue to) diminish whenever oil and gas prices decline", 53% of respondents either agreed or strongly agreed vs. 38% who disagreed or strongly disagreed.
This appears to indicate that while financing is the single largest risk to sector growth, investors are concerned about low energy prices lessening the case for alternative energy. Nevertheless, policy and regulatory developments are top-of-mind for investors. Apparently, several respondents (although the number isn't stated) revealed that their alternative energy investment theses rested on government incentives.
Journalists Have Some Homework To Do
Overall, respondents feel that both the mainstream and business press do a poor job of covering the alternative energy sector, with the former often being overoptimistic and the latter being too skeptical.
Only 24% of respondents agree that "generally, the media cover the industry fully and fairly", with the balance (76%) believing that "journalists and other media often overlook or are under informed about important aspects of the industry".
Stars & Dogs For 2009
An investor survey wouldn't be the same without stock picks. Without further ado, here are respondents' views regarding the best and worst performing alternative energy stocks for 2009.
| Best & Worst Performing Alternative Energy Stocks for 2009 | ||||
| Rank | Top picks | Top Dogs | ||
| # | Company Name | Ticker | Company Name | Ticker |
| 1 | First Solar | FSLR | Solaria Energia | SEYMF.PK |
| 2 | Vestas | VWSYF.PK | Suntech Power | STP |
| 3 | Sunpower | SPWRA | Theolia | THIXF.PK |
| 4 | Iberdrola Renovables | IRVSF.PK | Vestas | VWSYF.PK |
| 5 | Covanta Holding | CVA | Aventine Renewable | AVR |
Interestingly, the top picks don't include any storage or battery stocks while only one of the dogs is a biofuel stock (Aventine (AVR)).
Either respondents don't want to reveal what they're buying or they won't put their money where their mouth is. I find it a little difficult to believe that respondents truly view storage as THE alternative energy sub-sector to be in for 2009 but can't identify a single storage stock they collectively like.
The Survey
Access the survey of alternative energy investors and analysts.
DISCLOSURE: Charles Morand does not have a position in any of the securities discussed above.
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This article has 14 comments:
I do not find that hard to believe at all. I think you will find that most prudent investors will not divulge what stocks they are taking a position in until after they have fully reached the position they wish to acquire, or of course are required by law to make a statement to that effect, which ever comes first. After all, if I am attempting to accumulate as much XYZ stock as possible, the last thing I would want to do is announce it to the world, with my reasons for doing so. Prematurely announcing my intent would accomplish nothing except substantially increase my acquisition costs, especially if I had sufficient data and credibility to support my choice.
I never said cost decreases would plateau - I said that without storage technologies deployment of renewables would plateau.
This plateauing has nothing to do with the cost of renewables but rather with grid management. Storage would allow renewable power to be almost dispachable. As it stands, wind and solar energy must be used as they are produced, which severely limits how much can be added to the grid (this is somewhat less true for solar since it can be deployed through the building stock as load-abatement/distrib... generation).
Perhaps before directing me to "do my research" you should take the time to read and understand what it is I'm saying.
On Feb 03 09:02 AM gebby wrote:
> no such thing as cost decreases plateauing. solar will be less than
> coal in 5 years. coal is dead and solar is ascendent. do your
> research.
>
I just noticed that Seeking Alpha wrecked the stock picks table when they took it from AltEnergyStocks.com . If you want to view it in its original format check out: www.altenergystocks.co...
Storage will certainly be a big player as we move forward. At this point Alti's large battery is the only one that has been tested and evaluated by KEMA. The storage players are keeping quite because they are getting their foothold on this explosive market.
I don't think others need me to point out how absurd your statement is. You just go on believing that solar and wind are just pie and the sky while the world leaves you behind.
Wind power in the U.S. grew by 8 GW last year with 4 GW just in the last three months.
U.S. wind power capacity grew to over 25 GW last year for a 50% growth rate. Wind can now power over 7 million homes.
Wind now employs 85,000 people with year over year growth of 70%. These rates of growth will accelerate in the coming years.
I think the media underplays renewable energy and repeats half truths that are fed to it by the massive propaganda campaign funded by the fossil fuel and nuclear industries.
They continually repeat statements like that renewable energy needs subsidies to compete, or that it's too intermittent, forgettting or not knowing that fossil fuels are more heavily subsidized.
You're right, they look for stories, stories of controversy, whether such controversy is real or not, like over global warming science.
Charles
Yes we need the technology to balance the grid but we have a ways to go before that's a big problem. According to John Peterson, who writes about energy storage here, Denmark is now having an issue with this, but they have 20% wind power. We only have 2% of capacity.
It is much less an issue with solar, since solar naturally puts out the most energy when demand it highest. And solar thermal with heat storage doesn't have any issue with energy storage as it has it's own storage and its much much cheaper to store heat than electricity.
Ferdinand
Coal is dead. Gebby is right. So called "clean coal" will be too expensive to compete with solar and wind. And the technology is at least a decade away. In ten years or less, solar thermal will be providing base load power at 5-8 cents/kWh. Coal with CCS technology will be at least 15 cents/kWh.
Wind is already much cheaper than that.
Recently, that has shifted, but with a recession and gas prices so low, it makes sense that Alt Stocks are a strong choice, yet questionable.
Plus, one must consider, which management team will be able to take advantage of any Alt Energy opportunities in marketplace first. That will be the prize to pick.
May we see greener pastures ahead. Pun intended.
It's so quiet, so clean, and so cost effective, after 8 to 10 years, which goes by very quickly. Essentially free electricity after that; I challenge you to beat that with petrol. And solar production can/will become so very much less expensive, given the new administrations incentives. No more dependence on energy imports from questionably friendly nations required. What else do you need to know?
Just try this..power up your house/business with solar panels, or pour a gallon of gasoline all over your hands. Feel which one you like the best! You will soon see what I'm talking about.
As for the battery storage...very important aspect. Lithium ion is the state of the art, and Panasonic buying out Sanyo,,very intelligent move.
Hats off to Obama's vision for the future. Brilliant...no pun.