Global Warming Examiner

Solar Breaks Oil Price Dependence

The price of oil should not directly affect the demand for solar cells. Solar creates electricity while oil is used for transportation. Solar will be more affected by the ability of utilities to burn more coal, cost of natural gas (alternative to solar assuming you can't burn coal), price and availability of wind power.
Tax credits for solar power are currently the biggest factor in demand. Due to governments indecisive nature on future credits, solar stocks can have very large price swings as expectations change with political fortune. US government will be deciding on extending credits that expire the end of this year.

Solar Shorts Keep On Rising Even As Oil Surprises

When you compare the cost of solar to other energy sources, solar used to be compared to the cost of coal. Since it will be very difficult to build a new coal-fired power plant now due to global warming considerations, the cost of solar should now be compared to the cost of natural gas. Maybe this is why solar seems to track with oil prices. New solar electric production will displace natural gas electric production. The cost of natural gas is rising while the cost of solar is dropping.

There are also new applications for solar that could add to demand over the years. Toyota is planning to put solar panels on its Prius in 2010. This could be a developing trend with all electric and hybrid electric cars. As I discussed on my website, solar on a car is cost effective. The solar energy is displacing more expensive gasoline so the electricity produced on a car is worth 31.5 cents per Kwh based on $4.00 gasoline. At $5.00 gasoline the electricity produced is worth 40 cents per Kwh.

The 'Problem' With Solar Companies is Not Really a Problem

Solar still requires subsidies as the cost is higher than comparable fossil fuel power. The cost of fossil fuel is going up and the cost of solar is going down. Some solar uses are cost effective now. I would expect that solar subsidies will drop per unit, but not be eliminated. Even will Spain cutting back subsidies, they are not the only country. There should still be enough demand for the industry to grow rapidly for the next several years.

Which Are the Bargains In Solar Stocks?

Update on SOLF - The Earnings projection for SOLF in my chart is apparently incorrect. Newstar - appreciate your pointing it out. I posted the projected 2009 earnings number after checking with a couple of sources. Today one of my sources has reduced the number to $1.34. Newstar got a $1.16 number. At $1.34 the 2009 P/E would be 15. Remember these are estimates. I don't trust the 5 year growth estimate for SOLF, but the PEG would be higher than the 1.03 number listed in the chart. SOLF is a stock that doesn't have as good a visibility as the other solar stocks and as such I consider it to be very high risk. Sorry for the incorrect data.

Solar Power Will Be Transformational in the Next Decade

I am long on CSIQ and TSL because I believe the industry is currently capacity constrained. The shortage of polysilicone is abating and these companies could grow production volume at some very impressive rates for several years. All of the solar producers can make money, I just favor the ones with the lower P/E ratios.

Solar Power Will Be Transformational in the Next Decade

I looked at a 2KW installation for my home and the price, after rebates and credits was about $17,000. The full price was closer to $30,000 without incentives. Assuming 6 hours of full, direct, sunlight per day producing at full power and cost of $0.125 per KWh is $1.50 per day. That's $548 per year (assuming no cloudy days). That is a rate of return on investment of 3.2% per year or a payback time of 31 years.

It is getting closer to being a reasonable investment after credits and rebates. Things that would make the equation more favorable: If power companies would switch to time of day pricing, they would buy peak power for a higher price. Establish low cost loan programs with government guarantees to reduce the cost of borrowing. Raise the price of coal and other fossil fuels. Reduce the cost of solar panels and inverters.

Bottom Line: the subsidies that the solar energy is currently enjoying is creating artificial demand. This demand is important to drive the price of solar systems down so that eventually we will reach the price where solar power is economical on its own merits.

Solar Stocks: Nine That Will Shine in a Bull Market

Amazing set of comments - most about nuclear.

The most expensive cost of nuclear - the one that makes it prohibitive - is the cost of the lawsuits. Go read Public Citizen.

Without the lawsuits it is as cheap or cheaper than coal plants.

Good point that coal has uranium in it and does release a very small amount of radioactivity. (GEE! We are all going to die from years of radioactive exposure from coal plants! lmao!) The other pollutants form coal, like mercury, are much more dangerous.

Have a problem with water? Why not put the plant near the ocean, which is also where most of the population lives and where most of electricity is consumed.