Solar Millennium: A Rare Opportunity

This is the third in a series of entries on opportunities in solar stocks, based on a panel at Solar 2009. The the first article introduced the panelists, and took a look at the solar sector as a whole. The second was about First Solar.

Allen Goodman on Solar Millennium (SMLNF.PK)

"Project developers [such as Solar Millennium] stand out because of their ability to have a relationship with the customer."

Peter Lynch on Solar Millennium (SMLNF.PK)

"I liked Solar Millennium before it ran up to $90 last year, I liked it at $90, and I like it today at $16."

Investment Action

Solar Millennium closed on May 15 at $17.75. That's over $16, but a lot lower than $90. If you're looking to buy a solar stock despite the scary market conditions I discussed in the first part of this series, Solar Millennium should be at the top of your list. Since it's a Concentrating Solar Thermal Power (CSP) developer, an exciting technology I recently highlighted for its ability to produce dispatchable power, it's one of the rare developers that has shown it can build real plants (that differentiating factor Allen Goodman spoke of.)

DISCLOSURE: None.

Comments

[pftittl:]

So, you don't own it?

May 26 08:22 AM

[Wisdom vs. ...:]

concentrating power has proven to be uneconomical so far; i will leave the engineering explanations to the experts, but water is a huge problem. simply, a technological breakthrough is necessary; this company is very risky long term

May 26 12:25 PM

[Danny Newton:]

The Spanish version of power tower, with about 37 acres of solar panels, is producing 20 megawatts. They don't say if that is peak, average or what kind of watts but it works out to about 0.537 megawatts per acre of reflectors.

537 kilowatt hours is worth, in my part of the country, about $612.18 per day. This works out to an annual income of $223,598.75 . At 5%, this income would support a 40 year investment of $3.8 million dollars per ace.

This is a way better investment than paying $40 million for 2.2 acres of solar cells. The state of Tennessee claims that they will get a million dollars a year from the $40 million dollar investment.

One good midwest hail storm would wreck either project.

May 26 08:57 PM

[Tom Konrad:]

I generally don't buy solar stocks... I think that investors get too excited about solar, and prefer to concentrate my investmetns in more boring sectors such as energy efficiency and transmission.


On May 26 08:22 AM pftittl wrote:

> So, you don't own it?

May 28 02:08 AM

[Tom Konrad:]

Water is a problem for trough technology, but power towers can use air cooling with a much smaller hit to efficiency.


On May 26 12:25 PM Wisdom vs. Information wrote:

> concentrating power has proven to be uneconomical so far; i will
> leave the engineering explanations to the experts, but water is a
> huge problem. simply, a technological breakthrough is necessary;
> this company is very risky long term

May 28 02:11 AM