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Warren Buffett’s MidAmerican Energy will buy a 49% stake in NRG Energy's (NRG) $1.8B Agua...

Warren Buffett’s MidAmerican Energy will buy a 49% stake in NRG Energy's (NRG) $1.8B Agua Caliente solar project, just a week after buying the entire $2B Topaz power plant in California from First Solar (FSLR). Buffett’s foray into solar shows utility-scale power plants offer good returns with little downside risk, Mizuho's Paul Clegg says, though other motivations also may be at work.
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Comments (37)
  • lawrencecostello
    , contributor
    Comments (2) | Send Message
     
    Some do insider trading,, Buffett does insider Buying, He has friend in High Places and they come to Him..with deals no one else can get,,,
    Then he tries to act humble,,, Jeckel and Hyde mixed with Jack the Ripper. "That's my Snow Ball" baby..
    16 Dec 2011, 06:07 PM Reply Like
  • Cincinnatus
    , contributor
    Comments (4142) | Send Message
     
    The details in the "other motivations" is the key. This is Buffett dipping his hand into the taxpayers and utility ratepayers wallets again via subsidies and high contracted rates.

     

    Checking my watch it appears he's about due to begin squealing again about how the "rich" don't pay enough in taxes that will end up back in his pocket.
    16 Dec 2011, 06:26 PM Reply Like
  • moreofthesame
    , contributor
    Comments (743) | Send Message
     
    The little jelous boy choir singing this christmas season it seems.
    16 Dec 2011, 06:41 PM Reply Like
  • Cincinnatus
    , contributor
    Comments (4142) | Send Message
     
    So if you and I can get in on the scam then it's not wrong? Your first name isn't Jon is it?
    16 Dec 2011, 06:52 PM Reply Like
  • moreofthesame
    , contributor
    Comments (743) | Send Message
     
    no its not. Listen, do you really think that the solar investment is more of a scam than the oil or pretty much any other energy related investment?
    May be he simply thinks that solar will be become more important in the coming years and of course lucrative, how about that?
    16 Dec 2011, 08:18 PM Reply Like
  • Ricard
    , contributor
    Comments (3829) | Send Message
     
    Buffett is a profiteer. What people need to realize is that profit-making is largely amoral. It seems however, that Buffett has indeed found the narrow path. Apparently it makes life easier when you can legally and ethically profit from someone else's misery, as opposed to being the cause of it.
    17 Dec 2011, 11:24 AM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (11552) | Send Message
     
    Once a fund is heavily embedded in insurance and banking they are never clean unless its a community bank or a local insurance company. Even then they may not be clean. Buffet is deeply dependent on both these days.
    17 Dec 2011, 01:47 PM Reply Like
  • Xvadim
    , contributor
    Comments (2) | Send Message
     
    Amen.
    17 Dec 2011, 02:15 PM Reply Like
  • blueline
    , contributor
    Comments (1591) | Send Message
     
    Profit-making or Capitalism is not amoral. That is simply Marxist propaganda. Capitalism is providing a service or product that someone will pay for. The entire modern society owes it's success to profit-making. Modern health care, food production, transportation, housing is the direct result of profit-taking.
    17 Dec 2011, 06:31 PM Reply Like
  • Ricard
    , contributor
    Comments (3829) | Send Message
     
    "Profit-making or Capitalism is not amoral. "

     

    There's a difference between amoral and immoral. Daily living is largely amoral, although at times we are confronted with decisions that force us to be either moral or immoral.
    18 Dec 2011, 02:17 AM Reply Like
  • blueline
    , contributor
    Comments (1591) | Send Message
     
    Ricard, I'm sorry to hear that you largely live your life amorally (Not admitting of moral distinctions or judgments; neither moral nor immoral.
    Lacking moral sensibility; not caring about right and wrong) but I don't. Life for most of us is a constant choice between right and wrong.
    18 Dec 2011, 08:42 AM Reply Like
  • Ricard
    , contributor
    Comments (3829) | Send Message
     
    Well, there's two ways of looking at it.

     

    When I sit at the dinner table, I do so because I am hungry. Do I think of the millions (if not billions) of starving people out there who can't do so on a regular basis? When I go to sleep, I do so because I am tired. Do I think of the masses of people who have to worry about whether or not they will wake up the following morning? Do I go on hunger strikes or deprive myself of sleep over this? Do you? Do you know anyone that does?

     

    You can live life feeling guilty about all the advantages you have, or you can live life seeking to advantage yourself to the fullest. The latter describes capitalism, seeking and advantaging yourself of opportunity, i.e. profit-making. It does not worry about how it is done, unless society imposes limits on its activity based on its moral judgement. I believe for every rule society places (and the rules are legion and voluminous), there are countless more forms of unnamed, undocumented behavior that go unnoticed, hence my line that we live life largely amorally.

     

    Here's an example (not so trivial). We have a large debate centering around the death penalty. However, it only applies to citizens. Both sides will claim the moral high ground. What about others that come within our jurisdiction? Where was the debate when Saddam was put on trial and executed? How many people against the death penalty thought that Saddam deserved it, or were too afraid to speak out against it...this in a "free", "liberal" society? There are some people who claim that Iraq was a holy war, but there are several glaring examples where Christian codes of ethics and morality were just tossed out the window, and another rulebook was put into place.
    18 Dec 2011, 01:12 PM Reply Like
  • Ricard
    , contributor
    Comments (3829) | Send Message
     
    In this sense, you can even say that Christianity is largely amoral, because in the end, it doesn't matter what you do, as long as you believe Christ is the Son of God and accept him as your Savior and Messiah.
    18 Dec 2011, 01:40 PM Reply Like
  • Spencer Knight
    , contributor
    Comments (417) | Send Message
     
    Setting aside the speculative reasons for the recent purchases; it appears Buffett is expecting a shift to solar in the long run. In fact he is placing large bets on America focusing on solar energy. Let's see if he begins lobbing to lawmakers to get some sort of incentive for consumers if he wants solar energy to expand and bring his investments serious returns...
    16 Dec 2011, 07:09 PM Reply Like
  • twice
    , contributor
    Comments (89) | Send Message
     
    i understand that the deal locked in prices for the energy (with tax credit), so it doesn't matter what lobbying he does in the future. especially consumer-side lobbying. energy is energy
    17 Dec 2011, 09:39 AM Reply Like
  • Cincinnatus
    , contributor
    Comments (4142) | Send Message
     
    There's no speculation involved here. Buffett is getting a guaranteed loan subsidized by the taxpayer and locking in high contracted rates for 25 years. It's leverage on the backs of the taxpayer and milking ratepayers on the backend.

     

    It's not a bet on solar - in fact quite the contrary. He's getting in on this because subsidized deals like this are disappearing, and straight deals on solar aren't economical. The reason Buffett bought BNSF was he knows coal is the electricity generation source for the foreseeable future.

     

    "BNSF hauls enough coal to power one out of every ten homes in America"
    http://bit.ly/tFSgot
    19 Dec 2011, 02:41 AM Reply Like
  • dividend_growth
    , contributor
    Comments (2899) | Send Message
     
    Buffett's cost for the Topaz project is roughtly $1.3 billion in the first 3-4 years, then it's annual $500 million free cash flow for the next 25 years.

     

    This deal should be similar.

     

    Berkshire Hathaway's free cash flow is $1.1 billion a month.
    17 Dec 2011, 12:43 AM Reply Like
  • blueline
    , contributor
    Comments (1591) | Send Message
     
    Buffett is gambling on the direction the country is going to be forced to go for energy. If the anti-fossil fuel gang get their way he wins. America will be forced to use solar and wind for electricity and he can charge what ever he wants.
    17 Dec 2011, 08:00 AM Reply Like
  • Efrain Rojas
    , contributor
    Comments (208) | Send Message
     
    Anti-fossil fuel? How 'bout we coin another phrase, anti-semiconductor. Sounds silly doesn't it? Fundamentally, solar technology is derivative of the same technologies enabling that gosh darn smart phone you carry with you everywhere. Take off your ideologue goggles and start thinking like a true capitalist. When, not if, solar generation crosses the parity threshold it will be the 21st century equivalent of an industrial revolution.
    17 Dec 2011, 02:13 PM Reply Like
  • Xvadim
    , contributor
    Comments (2) | Send Message
     
    Now blueline... "charge whatever he wants" -- that's just dumb. Did you check what you're paying for a barrel of oil recently, or in this case coal? How much price control do we have there? I'd rather give my money to Buffett than to backward oil producers in the middle east or coal producers that create hazards for miners by cost cutting on safety. At least Buffett recirculates his investments back here in America. He's a profiteer, but he's our profiteer.
    17 Dec 2011, 02:19 PM Reply Like
  • blueline
    , contributor
    Comments (1591) | Send Message
     
    Once we start drilling and mining again for our massive domestic reserves, solar will not be able to compete economically. The only way he wins is if we are forced to buy from the foreign energy mafia. I believe solar has a place in the energy picture but it can't compete in a level play field, at least not with the current technology.
    17 Dec 2011, 06:17 PM Reply Like
  • Efrain Rojas
    , contributor
    Comments (208) | Send Message
     
    The operative word is "current" technology. Photovoltaic technology is semiconductor technology--You know, like Moore's Law. But solar doesn't have to be twice as good every 2 years. It only needs to be half as expensive in two years in order to initiate a massive displacement of conventional power.
    17 Dec 2011, 07:49 PM Reply Like
  • 1980XLS-2.0
    , contributor
    Comments (525) | Send Message
     
    Really?

     

    Don't know about you, but I need my lights in the Nightime.

     

    Keep Dreaming. The charts are on my side.

     

    Electricity for 4 hours from 11:00 am 'till 3:00 pm while I am at work is useless.

     

    Soon that peak demand will be filled. And then what?
    17 Dec 2011, 08:12 PM Reply Like
  • Efrain Rojas
    , contributor
    Comments (208) | Send Message
     
    In the meantime there will be much bloodletting. But the survivors will upset many apple carts when they materialize, just like every major new technology-There's no Packard Motors for example, but there is a Ford. Even a marginal piece of the energy market is big enough to mint many new millionaires. Keep in mind that a cost effective local or distributed battery storage system would amplify the reach of this technology by an order of magnitude and might possibly be applicable to vehicles as well.
    18 Dec 2011, 02:41 AM Reply Like
  • Cincinnatus
    , contributor
    Comments (4142) | Send Message
     
    blueline, you're correct. Buffett has bet on the direction the country is going to be forced to go for energy, and he bet on coal (see the BNSF link above). This solar deal is a one-time deal for Buffett that's purely about guaranteed cash flow and tax credits (and undoubtedly it's good PR for him to counter his coal bets).
    19 Dec 2011, 02:50 AM Reply Like
  • Cincinnatus
    , contributor
    Comments (4142) | Send Message
     
    "Even a marginal piece of the energy market is big enough to mint many new millionaires."

     

    Indeed, as the execs at Solyndra and AONE can attest.
    19 Dec 2011, 02:56 AM Reply Like
  • Jonathan A Parker
    , contributor
    Comments (7) | Send Message
     
    The solar space is dead in the short term due to increased oil production out of the middle east. Also the United States should look at the option of Natural Gas. I know Obama is in bed with coal, but really, he shuns Nat Gas but invest our money in solar and $TSLA...what a joke....
    17 Dec 2011, 01:40 PM Reply Like
  • Efrain Rojas
    , contributor
    Comments (208) | Send Message
     
    Solar energy generation is fundamentally a semiconductor technology. Only a fool would invoke an ideologically misguided bias against it. There will be plenty of losers, just like there were losers in the dot.com shakeout, the early PC shakeout, and every preceding technology (ever heard of Packard?). The survivors simply went on to dominate and mold the world we inhabit.
    17 Dec 2011, 02:28 PM Reply Like
  • Valley Boy
    , contributor
    Comments (2211) | Send Message
     
    There should be more solar investment choices as time goes by. Smarter technologies and cost effective solutions will eventually come to fruition sooner or later if one has any faith in the intelligence of the business sector. I'm reading more good news about solar than bad news so I'll guess most of the bad news is in the past.
    http://1.usa.gov/sG2gs4
    17 Dec 2011, 09:26 PM Reply Like
  • 1980XLS-2.0
    , contributor
    Comments (525) | Send Message
     
    Valley,

     

    You're still buying that? The same people that have destroyed more wealth in history than anyone?

     

    Consider the source. Thankfully there are always some to short sell this junk to.

     

    Some sheeple enjoy being fleeced I guess..
    17 Dec 2011, 09:43 PM Reply Like
  • Valley Boy
    , contributor
    Comments (2211) | Send Message
     
    I'm leery of buying any particular investment that appears not being ready for prime time, 1980. But at the same time, I sure wouldn't discount the ability and ingenuity of business to come up with the energy we demand. Sometimes you have trust your own judgment.
    17 Dec 2011, 09:49 PM Reply Like
  • 1980XLS-2.0
    , contributor
    Comments (525) | Send Message
     
    Solar Energy is a scam. Buffett knows it. That won't stop him from making money off of it however.

     

    The fools that misread his intentions a bought FSLR on news of his involvement, got burned again.

     

    http://bit.ly/vZWKg8

     

    Soon, there will be so much overcapacity in solar, the utilities won't be able to offer you anything for the suplus power, for even the 3-4 hours a day that it is needed.

     

    Until a storage breakthrough is achieved, it is a Pipe dream, nothing more.

     

    Don't believe me? Just do a one year chart on either AONE or FSLR. Charts don't lie, politicians do.

     

    http://bit.ly/jcCEpA

     

    Both FSLR and AONE are down more than 80% since I have recommended them as a short, almost daily, on SA for over a year.
    17 Dec 2011, 04:21 PM Reply Like
  • Efrain Rojas
    , contributor
    Comments (208) | Send Message
     
    Solar is such a perilous investment because a black swan can come in any time and upset the apple cart for existing solar companies. Long term, the consumer will be the winner--along with the companies that buy up the right IP at a discount.
    17 Dec 2011, 05:43 PM Reply Like
  • dividend_growth
    , contributor
    Comments (2899) | Send Message
     
    You clearly failed to understand the difference between solar panel makers and solar plants.

     

    The worse things are for panel makers, the better it is for the plants. Buffett is buying the plant, not the panel maker.

     

    At First Solar's price, it's already competitive against coal in Southern California.
    17 Dec 2011, 09:20 PM Reply Like
  • Efrain Rojas
    , contributor
    Comments (208) | Send Message
     
    The panel makers are experiencing the sting of creative destruction. Every business becomes a high volume, low margin business when it matures. Rest assured there will be sturdy offspring when the weak are shaken out. That is the miracle of capitalism.
    18 Dec 2011, 02:46 AM Reply Like
  • Cincinnatus
    , contributor
    Comments (4142) | Send Message
     
    Solar is dead. Governments are bankrupt and can't afford to keep throwing money at solar industry insiders. Obama was in the right place at the right time to stuff the Stimulus bill with this pork and receive the resultant campaign kickbacks, but that time has passed.
    19 Dec 2011, 03:08 AM Reply Like
  • 1980XLS-2.0
    , contributor
    Comments (525) | Send Message
     
    Rojas,

     

    You mean like with Airlines?

     

    Not gonna happen.

     

    Weak get shaken out, and remaining ones get weaker too.

     

    Take the Gov't subsidies and/or incentives away, and it gets even worse.
    18 Dec 2011, 01:51 PM Reply Like
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