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Will Some Solar Companies Face a Cash Crunch?

The Chinese solar firms are growing 300% a year! That is an amazing growth rate. So of course they are using lots of cash. They realize that if the grow slowly they will not survive as firms. It is a race for market share and toward efficiencies of scale and cost reductions. If they don't find their price reductions they will also need to worry more about competing solar electric technologies.

So as investors we want them to grow as quickly as possible. But of course it is a tightrope.

My sense is that the Chinese government is very supportive of growth and gaining scale needed to dominate the world market.

Am I wrong in saying that the Chinese government will provide resources to companies that start falling off the tightrope?

Relax... seems like this may be a good period to buy solar stocks.

Further Musings on Solar Stocks

I recently ran some numbers on Biofuels vs Solar powered electric cars for the Midwest. The future of travel is renewable electric!

Good agricultural land produces 5 dry tons of biomass an acre per year, each dry ton can produce roughly 100 gallons of fuel per ton and if we assume cars can get 50 miles per gallon, than each acre of land could produce enough fuel to drive a car 25,000 miles per year.

About 250 kilowatts (kW) of solar electric modules would fill that same acre of land. In Wisconsin that 250 kW system would generate 300,000 kWh per year. An electric car will go at least 3 miles per kWh. An acre of solar modules could drive electric vehicles 900,000 miles per year.

Solar power is 36 times more efficient than biofuels at powering vehicles (even given Wisconsin solar resource). If we move to cellulosic ethanol from switchgrass solar power is 12 times better.

Solar power has other benefits, such as: solar power does not require land – roof tops are fine, solar module conversion efficiencies are being raised significantly (so less area would be needed per unit of energy produced), and electric cars and their batteries are in their infancy with efficiency gains remaining.

Meanwhile, biofuel crops must be harvested, transported and processed into the biofuel and sold to customers at biofuel stations. While solar power can go directly into a car’s battery with no moving parts.

Agriculture also means fertilization, tilling, soil loss, and irrigation. While solar power systems require very little maintenance and have a 30 to 40 year expected life.

Why the heck are we even pursuing biofuels???

Further Musings on Solar Stocks

Great insight on FSLR. What are you thoughts on LDK?