Obama Touts Solar, Geothermal

Originally published on author's site on May 27, 2009.

Prez Obama spoke at Nellis Air Force base today discussing the importance of renewable energy and announcing funding efforts for solar and geothermal. Nellis Air Force base is home to the largest solar installation in the Western hemisphere and provides 25% of the electricity for the 12000 who live and work at the base, saving the military about $1 million a year.

Here are some highlights of the speech..

“America produces less than 3 percent of our electricity through renewable sources of energy like wind and solar — less than 3 percent. In contrast, Denmark produces 20 percent of their electricity through wind. We pioneered solar technology, but we’ve fallen behind countries like Germany and Japan in generating it, even though they get less sun than we do. They certainly get less sun than Nevada.”

Obama announced the availability of funding for two Recovery Act programs to spur the growth of solar and geothermal energy.

“I’m announcing the availability of funding for two Recovery Act programs that will help us reach that goal.

The first is a solar energy technologies program that will help replicate the success of the Nellis project in cities and states across America — because in this case, what happens in Vegas should not stay in Vegas. (Laughter and applause.) We want everybody to know what we’re doing here in Vegas. (Applause.) We’ll invest in the development and deployment of solar technology wherever it can thrive and we’ll find the best ways to integrate solar power into our electric grid.

The second program I’m announcing will help develop the use of geothermal energy in America. As many of you in Nevada know, geothermal energy is literally defined as “heat from the earth.” This heat can then be harnessed as a clean, affordable, and reliable source of energy. And already, Nevada has 17 industrial scale geothermal plants, and your capacity to generate this type of power is expected to increase in the next few years. The program we’re announcing will help accelerate this process — here, and across America. So this is something that we expect will — (applause.) — this will create more jobs, it will create more businesses, and more affordable electricity for the American people.”

The full text of the speech is here. For those more visually inclined, the video is below:

There are many ways to play solar on the US exchanges with the Claymore Solar ETF (TAN) and the Market Vectors Solar Energy ETF (KWT) offering diversified ways to play the sector. Fewer investors are aware of the ways to play geothermal, so I thought I’d discuss a few ways to play it with individual stocks. Please note these are not buy recommendations! Due your own due diligence before making trade decisions (links for the free analysis below may help you).

Geothermal Stocks:

• Ormat (ORA) is the big 800 lb gorilla in the space and probably the safest bet
• Calpine (CPN) is an electric utility with significant geothermal exposure
• Raser Technologies (RZ) will begin booking revenue for its first geothermal plant next year
• US Geothermal (HTM) is expected to begin producing geothermal energy at its Neal Springs plant in about 2 years

Comments

[Chad Workman:]

What about Nevada Geothermal Power (NGLPF)? Their first power plant Faulkner 1 is due to be online and creating power by the end of August 2009. Not down the road like some of the other companies listed.

Jun 02 12:54 PM

[icebear:]

I was about to almost the same comment as chad. Nevada Geothermal has been conservative in their forecasts, and Faulkner 1 is ahead of schedule, and the wells have come in on the high end of their forecasts. Also they their Pumpernickel project could move forward quickly as there is a nearby market for the electricity and may benefit from the same loan program that US Geothermal has already benefited from.

Jun 02 02:54 PM

[icebear:]

Full disclosure: I have all the geothermal stocks mentioned in the article plus Nevada Geothermal in my portfolio.

Jun 02 02:57 PM

[epeon:]

Here is my problem with solar and geothermal, when all is said and done what is the cost on a kwhr basis? Everything I read said that solar is on the order of $.35/kwhr and geothermal is around $.25/kwhr. If true, this is far greater then the $.03 to $.05/kwhr that you can do coal with. So, does this mean that solar will always be dependent upon government largesse?

Jun 02 07:06 PM

[Fred W:]

The "price" or cost of producing solar kWhs varies greatly across regions of the U.S.
In appropriate areas for GT and solar PV, actual production costs are more in line with $0.06-0.08/kWh for GT and $0.09-0.14/kWh for PV--assuming or utility scale projects (greater than 2MW).
The assumptions of facility life and O&M are fairly straightforward for PV but can vary greatly depending on the particular site conditions and design choices for GT.


On Jun 02 07:06 PM epeon wrote:

> Here is my problem with solar and geothermal, when all is said and
> done what is the cost on a kwhr basis? Everything I read said that
> solar is on the order of $.35/kwhr and geothermal is around $.25/kwhr.
> If true, this is far greater then the $.03 to $.05/kwhr that you
> can do coal with. So, does this mean that solar will always be dependent
> upon government largesse?

Jun 03 10:53 AM

[wind4me:]

with Nevada Geothermal getting ready to bring 49MW's online and the 12% haircut today, one can still get in on Nevada Geothermal
Disclosure ::: LONG NGLPF.ob

Jun 03 07:19 PM

[wind4me:]

US geothermal is two years from producing power
Razer just diluted their own shareholders to the core and is down 40%

U are missing the boat with NOT loading on the Nevada Geothermal fast lane to power ahead of schedule

Jul 02 07:20 AM

[Chad Brown:]

Geothermal cost is about 8.8 cents in California for Southern California Edison. Look is up in their financial factbook. they are paying 16 cents for solar.


On Jun 02 07:06 PM epeon wrote:

> Here is my problem with solar and geothermal, when all is said and
> done what is the cost on a kwhr basis? Everything I read said that
> solar is on the order of $.35/kwhr and geothermal is around $.25/kwhr.
> If true, this is far greater then the $.03 to $.05/kwhr that you
> can do coal with. So, does this mean that solar will always be dependent
> upon government largesse?

Jul 11 12:37 PM