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Get ready: The solar “big bang” is getting underway as we speak. By all accounts, solar power is quickly becoming the fastest growing energy source in the United States, and indeed, the world. But here’s the most amazing part…
Even with a meteoric 48% annual growth - and that of a select group of solar companies - it's just getting started. The market is expected to double over the next five years, and triple in just seven.
What’s behind solar’s shine? Is this torrid growth sustainable? What opportunities are there for investment in the solar space? Let’s take a look.
A Quick Solar Panel Primer
Solar panels can be divided into several types: thermal, photovoltaic, hybrid and building integrated photovoltaics (BIPV). In a thermal collector, water or another fluid is heated by the sun’s rays, piped into a storage tank, and then used to heat either domestic hot water or as a heat source for a building.
A photovoltaic solar panel is made up of a number of individual semiconductor solar cells. Electricity is produced when protons from the sun’s rays slam into electrons in the cells, raising their energy level. A small electrical signal is the result. This signal is combined with that of other cells and panels, and the resulting power can then be stored, used directly at the generation site (someone’s home, for instance), or pumped back into the local electrical grid for use elsewhere.
Hybrid panels combine both thermal fluid heating and electrical power generation into one unit. These are relatively new, and while showing great promise, are not yet widely available.
Typical installations combine many panels together into arrays. These may be located on the ground, but typically are on residential and commercial rooftops, otherwise wasted space. A control system handles the interface and control of the panels to the existing electrical supply or hot water system.
Let’s take a closer look at photovoltaic panels, since that’s where the growth and investment opportunities lie.
Higher Efficiencies and Dropping Panel Costs
Not unlike other semiconductors, continued research and developments in the materials themselves have resulted in huge boosts in panel energy conversion efficiencies. As little as 10 years ago, 2% conversion efficiencies were the norm for polysilicon panels.
Commercial panels are now approaching 9% to 10%, and researchers have achieved nearly 20% in the laboratory.
However, new cadmium telluride thin-film technology is the industry’s current price/performance leader, and it and other derivations of thin-film will completely replace polysilicon panels in a few years.
Current panel costs are in the range of $1 to $2 per watt, however some companies have already broken the $1 per watt barrier. This trend will continue, with prices reaching $0.50 per watt and even lower in just a few short years. At the same time, panel efficiencies continue to increase, making solar installations even more financially attractive as time goes on. Have they finally become cost effective? The answer is yes and no…
Governments Around the World Gear Up
Germany and China are still the two biggest markets for solar. The German market will grow by nearly one-third this year, and that’s in the face of less than ideal economic conditions.
All indications are that global credit is beginning to loosen, particularly for solar installations in countries where governmental subsidies exist: Germany, China and now the United States.
The United States is the dark horse of solar, with some states offering as much as 35% credits on top of the 30% federal refund. It’s no wonder that the forecasts for solar installations for this year and next are double that of last year.
Here are the top five solar companies to invest in now:
First Solar (Nasdaq: FSLR) is the biggest player in thin-film solar panels, and is also the lowest cost producer. The company is a likely candidate for the S&P 500 and should experience a great second half of 2009.
Evergreen Solar (Nasdaq: ESLR) is another thin-film panel maker. This company is just beginning to ramp up its manufacturing, and that’s a good thing, since it has a backlog of over $3 billion.
Canadian Solar (Nasdaq: CSIQ) makes panels in the current polysilicon technology, but represents a great short-term (less than one-year) play in the space.
Ascent Solar (Nasdaq: ASTI) is focused on the developing BIPV market, and as such represents a great long-term play.
Energy Conversion Devices, Inc. (Nasdaq: ENER) makes, sells and installs photovoltaic panels and batteries for energy storage.
As I indicated last week, growth will likely continue to ramp up in a big way here in the United States and by 2016 our total installed base could equal that of the rest of the world. China and India are also heavily subsidizing solar installations and will drive growth even more.
Even with all this heady growth, total worldwide energy gleaned from solar will still be less than 3%. Clearly, investing in solar for the long term represents one of the greatest growth opportunities in our lifetime.
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This article has 34 comments:
OK, so how about a reasoned responce that points these "problems' out for my edification. Not just throwing rocks.
While I personally think PV will beat out others in the short term, to say that PV is where the growth and investment opportunities are is either a complete guess, or just wrong. there are many thin film options for investments, and many technologies which may beat Poly PV. The efficiencies of panels are outdated as well, the real numbers are all higher by about 5% points +/- a few. They costs/watt are WAY off. No Silicon PV is at $1 per watt yet, though it is a future goal.
These are a few issues which jumped out at me, makes me nervous about the rest that I am not as sure about.
Evergreen Solar, for example, is not a thin-film solar company. They have a "string ribbon" technology for working w silicon, but it has nothing to do w thin film deposition, nothing at all.
China is definitely not the world's second biggest market - I don't know where that comes from. Spain was probably number two last year - since the Spanish subsidy change, no one knows who's number two this year. It could be the US. But it's not China. They're just getting started with their market.
Also, anyone who knows anything about installations would mention the role an inverter plays, rather than a "control system." (Why not just say "thingamajig"?)
The conversion efficiencies described are way off too. First Solar's thin film panels regularly convert 10% today. Commercially sold silicon panels today are more like 14-15%. Top lab-tested panels are at least in the high 20s, perhaps even more. These numbers make a difference.
The list goes on...
should be PHOTONS!
The idea that China is the second biggest market may be based on the current subsidy program, which is intended to expand the use of solar. As they are likely the world's #1 producer of solar panels (I haven't checked this, but so many companies there), the new subsidy program could easily make them among the top consumers as well in the next year.
I was wondering why CSIQ is "a great short-term play" but there's not really much point in asking, is there?
as has beens?
STP is moving into thin film and BIPV
What about Concentrated PV, which EMKR builds cells for? No future there?
Nanosolar and Heliovolt won't be big players? (not public yet, but should be, once the market is more hospitable to IPOs)
If the world demand is to be so high, how will thin film fill the demand by itself?
Will tellurium costs rise while the cost of silicon panels fall?
No solar thermal? (look for IPOs when market improves)
What about solar equipment makers GT Solar and Spire?
A lot more questions than answers here.
Author: you are out of your depth and in need of a few years in the industry to figure out your basic missteps.
On Apr 05 08:54 AM Mr Gadget wrote:
> aquaculture: Yes solar is a growth industry. But this article is
> full of misrepresentation, halftruths, contradictions and mistakes.
>
>
> OK, so how about a reasoned responce that points these "problems'
> out for my edification. Not just throwing rocks.
Brian Dohe of Whitman college sent suspicious handwritten note with solar electric energy scheme enclosure.
home.comcast.net/~bpayne37/whitman59/w...
All is disconnected during an electrical storm or even a threat of one.
When it is sunny they work and when it is not they don't work. Now, this sounds simplistic but, living this lifestyle is no simplistic. They don't respond to demand like the power grid. If a million homes are producing, say 6 million kilowatts and the grid only needs 5m then 1 million go to ground, wasted. Simple put, living with solar is like camping. I learned to go to bed early.
Solar will BURN you clean.
There's no way this country will go for that.
Just won't work and nobody will put up with any money.
Too risky !!
But that emperor has no clothes and some people are starting to mention that fact. The question is, how long will taxpayers put up with throwing billions of dollars at a non-existent problem--the false 'man-made global warming' hypothesis.
Here is a video on the topic [its an hour] that includes scientists that were on the infamous IPCC.
And just a couple weeks ago in NYC, the second annual conference on climate change included scientists from Harvard, MIT, etc who have dared to cry "The Emperor has no clothes!" [These are scientists who have not been bought off with millions of dollars in government grants.]
See this link for presentations by Willie Soon of Harvard, Richard Lindzen of MIT, etc.
You might want to tell YOUR Congressman to say, "No" to 'cap and trade' which was introduce in the house last week. Or else invest in printing press stock 'cause Ben will need to buy more of them.
[Cap and trade is a bigger scam than Bernie had going.]
www.heartland.org/
scroll down to 'Keynote addresses...'
video.google.fr/videop...
That meeting in NY of skeptics has about as much credibility as the meeting of flat earthers. It is not a real scientific conference. It's a propaganda event aimed at the lay audience. If they had any credibility they would have been submitting scientific papers at the meeting of the AGU in SF in December, the way real science is done and where such papers are absent.
The Heartland Institute has even less credibility. They were also in the forefront of fighting for the tobacco companies to claim that cigarettes aren't bad for your health.
They are a right wing propaganda mill that has nothing to do with science, and everything to do with advancing conservative agendas.
The way these conferences are run make real scientists laugh. Expenses paid, offers of $1,000 for any speech refuting the AGW theory, and $10,000 for papers, which typically aren't peer reviewed. This year, they didn't invite denier mouthpiece Tim Ball because they knew he was too discredited even for their dog and pony show. Especially after the world found out he's a complete fraud, faked credentials and all. The rest of them aren't much better.
Here's what real scientists think of the kind of sources you rely on.
"The decline of Tim Ball: Denier champion reduced to railing at real scientists"
www.desmogblog.com/dec...
"The Washington Post, abandoning any journalistic standards, lets George Will publish a third time global warming lies debunked on its own pages"
April 2nd, 2009
climateprogress.org/20.../
The Heartland Institute's Skeptic Handbook - Get Out the Shovel.
30 March 09
www.desmogblog.com/hea...
"Of course a real scientist making such baseless arguments among their peers would be laughed out of the room. That is why you will never ever see climate deniers make their claims in the scientific literature – only in the mainstream media. Meanwhile the voting public remains dangerously confused by this garbage. As they say, tick tock goes the clock."
www.desmogblog.com/lor...
solveclimate.com/blog/...
"In Congressional Hearings, Amateurs Invited to Confuse Climate Science"
"Cato Institute
a key study Cato uses to argue we may see much less warming than the models predict comes to exactly the opposite conclusion."
climateprogress.org/20.../
"NY Times blows it again, printing more rubbish by a non climate scientist, Freeman Dyson."
climateprogress.org/20...
climateprogress.org/20.../
George F. Will
www.washingtonpost.com...
Rebuttal by Chris Mooney of Will's blatantly unscientific op-ed piece in the Washington Post
another rebuttal of same
Letter to editor by Michael Jarraud
Secretary General - World Meteorological Organization, Geneva
www.washingtonpost.com...
Investment U recommends ASTI, a company whose insiders are selling at new lows (just to get whatever they can). But with an operating margin of -949.07%, what else can they do?
The other three recommendations have issues, as well.
Perhaps I should be thanking Investment U, since I sold FSLR last year for a ridiculous price while the pumpers were in a frenzy.
But *buyers* should beware of the industry expert who does not know the industry...
ESLR was a dollar a share not long ago.
What future you are talking about ?
Anything that has to depend on the gov won't have a future.
Period.
"All is disconnected during an electrical storm or even a threat of one."
Our inverter is tied to battery storage, we run our pump and frig and most lights off the pv battery storage when the grid is interrupted.
The planet is either melting or freezing, depending on what you want to see. Thin film flat panels are either the cat's meow, or doomed to failure, depending on what you want to see. The government is either going to eliminate our use of oil, or default on debt such that the dollar- and our government's ability to collect and/or print them- will become worthless, depending on what you want to see.
The reality will take awhile to present itself, but the latest data seems clear- the answers will be somewhat in the middle. There may be a threat of global warming, but universities are presenting current data showing global cooling, and the Harvard, MIT PhDs. presenting data showing correlation to solar activity are gaining credibility (and Prof. Ball has published 31 articles on climate change, not 5- there was a retraction printed). But the concerns associated with foreign oil and dirty coal, irregardless of climate change, are not going away.
Thin film is lower cost and more effective in diffuse light, but CPV in the Southwest (or maybe Mexico...) combines 40% efficiency with maximum sunpower (3-4X New York) and lower cost materials so should be cost king, especially IF big storage is solved (the electric distribution companies could invest heaviliy in this with companies like Riverbank Power). Thermal solar (or a hybrid) is currently the lowest cost technology- and they will probably all survive and grow over time because oil prices WILL go up again to a point where having an alternative energy source at a small price penalty will make strategic sense, and there will be lots of people in places like the Northeast that will want to have their own generation ability so CPV won't work for them.
And the dollar and the US government will survive, although the dollar will weaken. Inflation was moderate when there was $20 Trillion in additional credit floating around, so the Fed's $12 Trillion isn't going to cause an inflationary firestorm, even if the Chinese and Arabs start moving a couple extra trillion back into the US.
I'm not investing, or invested, in solar over the next month or two because this earnings season is going to be brutal and create a downdraft in about everything, but I think most of the solar companies will survive and create value long term. I particularly like EMKR, BA, and FSLR because they are producing what will become the bullets in the solar wars. And even if solar only produces 30% of our power in 100 years when a major increase in energy for 9-10 billion people relying on desalinization, networked media, and electric transportation that will eat electricity- that's a LOT of modules.
I understand what you are saying, but it sounds like you are talking about living off the grid entirely. Grid tied solar has none of the problems you refer to.
PeteK
Nobody will put money into solar? Tell that to the venture capitalists who are putting more money into green tech than anywhere else.
you say- "Anything that has to depend on the gov won't have a future. Period"
You mean like the railroads, biotech, the internet, nuclear energy, oil coal, natural gas......?
Oil has been subsidized since 1918. Continuously.
Dirk
The correlation of the sun with warming is not disputed. In fact, it's what proves it can't be the cause over the last 50 years or so,
Tim Ball spent most of his career as a geographer, not a climate scientist.
1) Evergreen does have $3 Billion/ 1GW in Backlog contracts.
Devens had to double its capacity to 160MW to keep
up. Devens is ramped up and the rest will be history.
2) First Solar did recently achieve $1 per watt.... supposedly.
Its all over the net....... look it up.
3) Governments around the world are pouring Billions into
solar....... and it will explode......... THIS year.
For these reasons, i am heavily invested in ESLR because
i believe in them and what they are trying to do. I believe
they will be successful and i feel good about investing in
a company that will help us ween off of fossil fuels. Its the
right thing to do and im 100% behind it with my mouth AND
my money.
I hope you all get in on this before the big bang...... cuz it is
certainly coming....... don't let anyone fool you.
Solar power IS the new King.
And Wind isnt far behind.
I am planning to build a house in 2 yrs...... and i will have
Evergreen panels on my roof and a sign in the front yard
that reads "Powered By Evergreen, USA " :)
On Apr 06 11:17 AM sdcougar wrote:
> I believe solar has a good future, but BEWARE. Much of the bullishness
> of the solar sector is based on the global warming scare.
> But that emperor has no clothes and some people are starting to mention
> that fact. The question is, how long will taxpayers put up with
> throwing billions of dollars at a non-existent problem--the false
> 'man-made global warming' hypothesis.
>
> Here is a video on the topic [its an hour] that includes scientists
> that were on the infamous IPCC.
>
> And just a couple weeks ago in NYC, the second annual conference
> on climate change included scientists from Harvard, MIT, etc who
> have dared to cry "The Emperor has no clothes!" [These are scientists
> who have not been bought off with millions of dollars in government
> grants.]
>
> See this link for presentations by Willie Soon of Harvard, Richard
> Lindzen of MIT, etc.
>
> You might want to tell YOUR Congressman to say, "No" to 'cap and
> trade' which was introduce in the house last week. Or else invest
> in printing press stock 'cause Ben will need to buy more of them.
>
>
> [Cap and trade is a bigger scam than Bernie had going.]
But even if CO2 were not storing increased solar heat, it is certainly acidifying the oceans, and the consequences of that may kill the oceans--then which right-wing- flapper will fan up the missing oxygen once produced by phytoplankton?
The fact that there are still adult American doubters of global warming is an indictment of the science departments in America's public education system.
I am interested, but a big "what-if" comes forth- as to climate- what if you live in an area which has a low percentage of available sunshine- that is, what if you live in Seattle, with about 20% of available sunshine, or large mass of clouds coming up from the Guylf of Mexico?
Is solar energy then a good investment- would you install it? Or would you invest in the industry?
Hillbillyharry
> " The fact that there are still adult American doubters of global warming is an indictment of the science departments in America's public education system. "
Dedicated Science teachers and motivated and inspired students do the best they can to discover and excel despite the obstacles.
Science is in crisis!
Big Government is at fault for not funding Science Education enough.
Big Government is at fault for making sure Science News is squelched through the corrupt Media system.
Why does Big Government care to annihilate Science?
Because it interferes with Big Business [which Big Government prospers from]!
For example, Environmental Scientists find that a migratory Caribou path will be decimated by Oil exploration and pipelines in the Alaskan wilderness.
A Big Government official under the Bush administration declares: "I will pick people over animals every time!" and works covertly to override the will of the protesters.
To the greedy establishment, Money comes first!!!
Let's hope Obama is more progressive.