Major Corporate Shift to Solar Energy and LEDs

There's a new standing order in corporate America and it goes almost exactly like this:

Be much more efficient in your energy usage.

A sea change is occurring in the way U.S. businesses view energy consumption, according to a March 24-28 ChangeWave survey of 1,400 respondents knowledgeable about their company's energy spending.

Nearly three-in-five respondents (57%) say their company is concerned about reducing energy usage, and these heightened concerns are leading to a transformational shift in corporate energy consumption - with an extraordinary 26% of respondents saying their company has used Less energy than normal during the past six months.

In comparison, only 16% of respondents say they've used More energy over this time period.

In a related finding, nearly one-in-four respondents (23%) report their company's spending on energy efficient products and technologies will Increase over the next six months - three-times the percentage that see a Decrease (8%).

"The perfect storm of rising energy costs and concern over global climate disruption is forcing companies to rethink the most basic ways they use energy," said ChangeWave analyst Joshua Levine. "A tremendous shift in corporate perception is occurring and it's going to impact virtually all industries and create investment opportunities in the process."

To track the corporate race towards greater energy efficiency, we asked respondents which technologies and products their company is actually using. Two technologies - solar power and LED lighting - stand out above the rest.

Alternative Technologies - Here Comes the Sun

Corporate use of "off-the-grid" energy technologies is gaining momentum, with 8% of respondents saying they currently use alternative sources to generate power. Going forward, better than one-in-five (21%) say they'll install and make use of alternative energy sources within the next five years.

The shift to alternative energy is great news for solar power, which dominates the landscape.

As the above chart shows, solar is far ahead of other alternative energy options, both in terms of current corporate usage (51%) and future planned users (72%). Wind Power is relegated to a distant second for current (24%) and future users (19%).

Solar Flares

According to the survey, an unattractive payback period (24%) still ranks as one of the big barriers to corporate use of alternative power technologies, second only to initial capital investment (39%). And when asked how long they think it will take to achieve a payback for their current solar energy investments, the consensus estimate among respondents is seven years (for future solar energy investments it's 6.4 years).

But despite this, with crude oil prices hitting new all-time highs the solar industry clearly has momentum and is helping bring about a transformational shift in corporate energy use.

"Solar's rapid expansion on the corporate energy efficiency front is good news for companies in the solar food chain," says Josh Levine. "Polysilicon producers, solar cell manufacturers and solar installation firms are all likely beneficiaries of the trend toward the sun."

Adding to solar's attraction is the near certainty of continued tax credits.

U.S. lawmakers appear likely to pass an extension of a key solar industry tax credit. The bill, if passed, would extend the 30% commercial tax credit by eight years, the residential credit by one year and would remove a $2,000 cap on residential systems. Importantly, utilities would be able to take advantage of the credit for the first time.

According to Levine, the companies best positioned to ride this solar wave are the major photovoltaics manufacturers like First Solar (FSLR), SunPower Corp. (SPWR) and Suntech Power Holdings (STP) - each of which are leading the solar energy industry ever closer to the "Holy Grail" of alternative energy economics - grid price parity.

LED Lights Up

Along with solar power, the survey shows LED lighting is another standout in the corporate race towards energy efficiency.

Overall, lighting is the single easiest area for businesses to reduce their energy usage.

It is little wonder then, that energy efficient lighting is the top product/technology companies will be purchasing over the next six months to improve energy efficiency.

And while Compact and Regular Florescent Lighting maintain the greatest market share in terms of corporate purchasing over the past six months - LED Lighting (21%; up 7-pts) is the clear momentum leader going forward.

One big obstacle to the wider adoption of LED lighting technology is cost, according to survey respondents. Nearly three-in-four respondents (74%) say their company would only consider replacing all of its lighting with LED if the cost were less than $5 per bulb. But despite pricing issues, the survey shows that LED lighting is rapidly being adopted by U.S. companies.

This bodes well for major lighting companies like Philips Electronics (PHG) and General Electric (GE), who are the top LED manufacturers and distributors. However, Levine says it is the smaller pure-plays in LED lighting technology that are set to be the biggest winners in this market.

"Among the handful of innovators that have developed LED technologies, Cree Inc. (CREE) stands out as a likely candidate to be eventually acquired by a lighting giant," says Levine. "The light fixture market is a 2.5 billion unit market worldwide, and Cree's technologies are clearly addressing this enormous opportunity."

Back in a February ChangeWave report we named 2008 "The Year of Solar Power." The current survey shows the transformation in the way companies view energy consumption continues to represent a giant opportunity for investors, particularly within the solar and LED markets.

Jim Woods co-wrote this article.

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This article summarizes the results of a recent ChangeWave Alliance survey. The Alliance is a research network of 15,000 business, technology and medical professionals who spend their everyday lives working on the front line of technological change. For more info on ChangeWave, or to sign up for real-time alerts email on the hottest technologies and companies, click here.

Comments

[petyaczar]

Every month , the Sun pours onto the Earth more energy than mankind has used through out the history of homo sapiens. (total solar energy as measured in ERGS and watts and btu's)

IMO Global warming is a political scam, the latest Luddite tulip craze
designed to enslave us to the U.N. by transfering economic wealth and power from the U.S. to the 3rd and 4th world thru the U.N.

Food to gasohol is another luddite fallacy that - a sheer stupidity that costs more energy to make than it produces and has major impacts on all other food inputs. (ref the 2nd Law of Thermodynamics). The dumb/a politicians have been sold a bill of goods, see an opportunity for another power grab, and ALGORE is running around like a chicken with its head cut off yelling "the sky is falling" because he sees an opportunity to make lots of money! - the worst kind of charlatan.

Solar power, harnessing the Sun, along with Nuclear and geothermal and wind energy will be our technical salvation. With Solar in the pre-emininent role.

The Chinese know it = STP = a China play and a solar play.
The Germans and Spanish know it = ESLR = a major European play.
The Icelanders know it.

I've been in - and out - of Solar stocks for many years. The long term trend is now definitely Up Up and Away!!! Profitability is just around the corner, and now "social consiousness" will frost this cake and I am firmly convinced Solar is the best investment vehicle of the next 20 years.

The politicians will have to figure out how to "Tax the Sun" in order to put a stop to it. And that will take them a long time to do!!

[Daniel Kowkabany]

Solar Power is a no-brainer. It pays for itself and helps the envirment.

[solarjim]

I love how some people always feel a need to print Gore's name in all uppercase "ALGORE". Tells you everything you need to know.

[bob the bear]

You left out the most important solar energy company, ENER. Their new patent on increasing the speed of manufacture of thin film photovoltaics is the link to make sunpower competitive with fossil fuels( I sent the wrong web link last time, below is the correct one ):
appft1.uspto.gov/netac...

This is extraordinary!

[User 184319]

According to petyaczar, "IMO Global warming is a political scam, the latest Luddite tulip craze designed to enslave us to the U.N. by transfering economic wealth and power from the U.S. to the 3rd and 4th world thru the U.N."

With no reference to any resource to back up those blanket statements, and with what appears to be little understanding of the scientific basis, not to mention the economic & political implications of climate change, who is acting like the Luddite here?

[nickgogerty]

New installed PV in 07 globally was 3GW. The US has 1 TW of installed power. PV is and will be miniscule in terms of power for the next 5 years even at 50% YoY growth. Wind did represent 40% of newly installed power last year, which is more interesting.

General lighting for LEDs represents less than 10% of the LED market. Most of the growth expected in LED market is in backlighting for phones and specialty automotive applications. LEDs are getting better in terms of $/Watt/Lumen but still need another 500 days. LED for general or even specialty lighting really ins't going to grow that market from a revenue perspective more than 15% YoY for the next 3 years.

[supershort]

The price of oil has little bearing on how much electricity costs. The majority is produced by coal an nat gas, which the US doesn't have a supply problem with. Corporate earnings are going down, and they will have little to spend on such high ticket items such as solar panels that have a 25 year payback time. Bottom line is at this point solar is a great idea, but the costs are totally out of whack. Solar is a big speculative play at this point, especially to be long after these have run up their P/E's to, well the sun.

[Clearlead]

Solar, wind and nuclear are the future...providing American's actually let the utilities build the transmission to get it delivered to end-users...so the present and near-term fuel supply of choice for generation is natural gas (up up and away). Coal (no matter how "clean" it might be) is likely to be an export to China and nations that don't care about the carbon issue.

[Solar Pays]

25 year pay-back? How about 10-12 year pay back in most cases. 25 year manufacturers warranty. If you finance a system, cash flow is positive day 1. (Cash Flow, Kiyosaki - NY Times best seller 5+ years). Finance any investment that appreciates. Pay cash for depreciating assets. Your poverty helps No One!

[petyaczar]

My response to User 184319 follows,

Dear luddite,

As a scientist with various degrees and advanced degrees from Univ. of Il., Northwestern University, and Harvard. I know that it is not necessary for me to provide references to ANY resource in an attempt to disprove a negative ie "Man made Global Warming does not exist"

Rather it is up to the proponents making the false assertion to provide clear and compelling scientific data and PROVE their assertion that "man made Global warming does exist"

To date the luddites and ALGORE's minions have failed to do so.

And User 184319 - what exactly are your Scientific credentials AND what are the sources upon which you rely for your silly assertions and false notions "National Enquirer and Time magazine"

Remember, the old conman's adage. "The mark never realizes he is the mark and being played the fool until the scam has been successfully concluded, and the foolish mark has been fleeced"

PShaw to you sir.

BTW T BOONE PICKENS has a $1MILLLION dollar offer outstanding to ALGORE. Pickens has offered to pay ALGORE $1M Bucks if ALGORE can provide ONE single solitary proof of the claims in his fictional diatribe. The proof to be accepteed and affirmed by a panel of distinguished scientists.

So far ALGORE has kept his mouth shut and not responded to the $1M offer.

Personally I think ALGORE has spent to much time sitting too close to Tipper Gore -she is HOT! - and so ALGORE came to the conclusion the Earth is warming.

Go ahead submit your scientific proof of man made global warming.- no anecdotes, no stories from National Enquirer.

[CT Programmer]

Sorry to burst your bubble "petyaczar", but even if you uploaded images of your "degrees", you are obviously not the definitive end of all scientific argument. I don't see hordes of scientists storming Washington with picket signs exclaiming "Global Warming is a Myth!" I don't see 60 Minutes exposing the "global warming fraud that has been perpetrated on America". It is amazing how in the face of overwhelming evidence, someone can actually claim that their minority scientific opinion is fact. You are not in the scientific majority. Your political leanings ("ALGORE") have obviously skewed what should be objectivity into a twisted diatribe. Tipper Gore? T Boone Pickens? How are any of these "scientific"... You are right that it is up to the proponents to prove their assertion, and they have. National Geographic. Scientific American. Popular Science. All reputable sources, and all have run multiple stories on global warming and its effects. We're not talking Dateline here. There is such overwhelming proof now that the U.S. government and governments all over the world are acknowledging the problem. My God. Even George W. has all but come out and acknowledged global warming, and that it is exacerbated by man. Are you saying that everyone else is wrong and you are right?!? Maybe you're just waiting for Rush Limbaugh before you throw in the towel.


Regarding all the comments on solar... yes, it is an exciting technology with great potential. So are a lot of things. Look at the energy landscape right now. You have oil, coal, gas, geothermal, wind, the list goes on. If we have all these technologies in place currently, why would we abandon all of them for a single technology? We won't. The future, both near and far, will be a combination of technologies, just as it is today. Hydrogen, solar, wind, sea waves, atomic, who knows what else lays ahead. But as "promising" as solar is, that does not mean that today's solar companies are a good value. First Solar is currently a PE of 143! Think about that. For them to come down to an average PE of 15, they would have to multiply their earnings by nearly 10 times. 10 times!!! And who's to say that in that time 100 other solar manufacturers won't spring up? Think about the PC field. Yes, there was a PC boom, and those first companies that really pushed it mainstream made a lot of bucks. But then came the commoditization of PC's, with a ton of PC manufacturers and declining margins. Solar is beyond that initial first stages of the boom. The technology is already there. It's just being made cheaper. You have companies in China like Trina Solar that used to do aluminum siding now in the solar business. As the technology becomes cheaper, more will flood the market. While that's great for you and me wanting to put solar panels on our roofs, its not really so great for the guy that bought the solar stocks at a PE of 143!


And "Solar Pays"... do you seriously believe all that garbage that Kiyosaki spews out? He is the biggest charlatan around. Rich dad, poor dad, my butt. "Pay cash for depreciating assets"? I guess that means if I want a solar system, which will depreciate in value over time, that I should pay cash and not finance? That kind of simplistic advice is hogwash. The guy's entire resume is made up. A good resource for info on Kiyosaki and his bull is at www.johntreed.com/Kiyo....

[actuallyreads]

Mr. petyaczar I invite you to pick up nearly any peer review journal wrt the evidence about global warming. The lower atmosphere is clearly warming while the upper does not. This means it is not the sun causing it. CO2 has increased dramatically. The carbon isotopes match exactly the ones produced from fossil fuel burning. There is no doubt (from anyone who can see the ice core records that the planet is clearly warming). Put this together. The planet is warming. It is caused by CO2. The CO2 was produced by us. It is very simple and available to read if you care to do so. And I do doubt the accuracy of your assertion regarding your degrees. Please be more careful when making broad unsubstantiated claims for all to read.

[jajagabor]

CT Programmer said: "Hydrogen, solar, wind, sea waves, atomic, who knows what else lays ahead."

Insofar as atomic, I don't like the idea of the radioactive isotope, technetium, being dumped into the English Channel, as the French are doing:

www.motherjones.com/ne...

brief excerpt from the above link:

{
But its reprocessing operations, as with Britain's notoriously leaky site at Sellafield, have racked up such a roster of problems that in the United States they'd be shut down as gross violators of the Clean Water Act. Every year Areva, the French conglomerate that handles reprocessing, dumps so much radioactive liquid into the Channel that, says Lochbaum of the Union of Concerned Scientists, "there are certain beaches where the effluent pipe is where you can get a suntan at night.

"I'm not going to say the French are 'no blood, no foul,'" Lochbaum told me, "but they're not quite as concerned about effluents as we are. They tend to believe more in 'the solution to pollution is dilution.'" They are, however, in violation of European Union pollution regulations—largely because the waste contains the dangerous isotope technetium, which so far no one has found a way to remove.
}

Of course, my dislike of technetium and other nuclear waste doesn't mean it will be phased out, or that the nuclear power industry will disappear -- only that it should.

[CT Programmer]

I hear you jajagabor. I never said I liked nuclear... just that it was likely to be in the future mix. People forget 3-mile Island very quickly. Chernobyl too (hope I spelled that right). You have an oil spill, even the size of the Exxon Valdez, and within half a decade everything is cleaned up. Nuclear accidents aren't so forgiving. Chernobyl is still no man's land decades later.

[glr n KY]

I hope everyone does their homework prior to investing heavily in the solar energy industry, other than for short-term trading. Theoretical solar energy per unit area is very limited and to date, very expensive per watt produced. I suspect as well that solar arrays will be troublesome to maintain in the long run and may have short life spans (say, less than 10-yrs.) when exposed to nature.

Personally, I'm looking for investments in companies that help increase the efficiency and reduce the waste of existing energy consumers. Our homes, vehicles, offices and factories not only use energy inefficiently but also waste phenomenal amounts of energy, most of which is lost to the environment as waste heat. Lighting usage is important and needs improvements in efficiency but is a relatively small portion of the sum.

The bulk of our energy usage goes to HVAC, industrial process heating/cooling/pumpin... home and office water heating, and transportation. Those companies which can make boilers, furnaces, turbines, generators, motors or engines more efficient are the true stars in this investment segment.

[petyaczar]

To CT PRogrammer: Apparently some people -you perhaps? - never knew what happened at 3 mile Island. - too young perhaps?

FYI: The facts of the matter are that ALL 3 mile Island safety Systems worked and functioned exactly as they were designed to function. The net result was that the reactor shut down (technically standby mode), there was NO RELEASE of ANY radiation of any kind in the 3 Mile Island shut down. No one was killed, maimed or otherwise injured. And Nuclear power continues it safety record = 100% = no release of radiation or deaths through out the Western World.

Chernobyl was/is of a Soviet design, and of course the U.S.S.R. was/is not included in the Western World.

Those are the facts.

Meantime look up how many people (workers) are killed,injured each year in the mining of coal, production of gas and oil. Look it up, you will perhaps be amazed.

At this time (2008) The U.S. should be producing 40% of its electrical needs thru Nuclear power, France is, we are not.
Because the environmental no nothing luddites who rely on the popular press (ie Time and Newsweek and National Enquirer, sic) for their so called Science (sic) cried and moaned and groaned their way into this current energy crisis by forcing the U.S. to decide Nuclear power was politically an unacceptable solution.

So read up on 3 mile island, call a spade a spade. You can still be against nuclear power, but don't use a falsity in support of your argument. It merely diminshes the credibility of the argument you wish to make.

IMO Solar is by far a superior solution, and eventually it will be mandated for residential and commercial roofing (tiles) as well as water heating, This will go a long way to reducing the amount of oil,coal and natural gas we use/need for residential heating.

Had the U.S. drilled in ANWR 10 years ago, we'd have that on stream today and this marginal problem would not exist. Remeber another word for "pristine" is "barren" and that part of the world is indeed barren.

good luck to you

[light bulbs]

LED's have a way to go before they can develop the light level required for a workplace enviroment. Right now the best place for LED bulbs are sign lighting

[GH]

Petya,

You have some of your "facts" utterly wrong:

ANWR is far from barren. It is a wildlife preserve, filled with birds, fish, and animals of all descriptions.

3 mile Island *did* release radioactivity into the atmosphere. Not large amounts, but significant enough to measure downwind. Moreover, the failed generator has yet to be repaired or remediated, due I believe to the level of radioactivity within the containment vessel.

Bulbs,
The problem is not the lighting level; they're plenty bright enough for large-scale outdoor lighting! The problem is simply up-front cost; people are used to paying for lighting slowly, a little up front and the rest over the (short, inefficient) life of the bulb. Typical total expenditure for a 75-watt bulb and power to light it is on the order of $100 for the 2 years it lasts in typical residential usage. It can be replaced by an LED-based bulb that costs $50 and lasts 30 years... but so far few except accountants and CFOs can get their heads around "spending $50 for a light bulb".

[petyaczar]

GH,, Pls don't be intentionally obtuse

My facts are all dicumented, not in dispute, and materially correct

1)Its a wildlife preserve by declaration only, ie one could declare a Bar in Gary Indiana a wildlife preserve, and while the declaration would exist, it has NO meaning in nature.
2)Barren = NO PEOPLE , no one ever goes there either. How many people do you know that have actually been up in ANWR? Better to drill there in the middle of nowhere than to attempt to drill in Gary
Indiana.
3)No MATERIAL radiation release by 3 mile island, no deaths, no injuries. 3 Mile Island produced less atmospheric radiation than one would get by hanging out in direct sunlight for 8 hours.

Those are facts jack!

GD tree huggers, turn off your lights, stop heating your houses, stop cooling your houses, stop driving cars,flying in airplanes, eating delivered food. Stop complaining about the price of petroleum products. THEN come tell me about GD ANWR