vitamin_j

Five Top Solar Power Stocks

I would strongly second aquaculture. This article is full of flat-out wrong information.

Evergreen Solar, for example, is not a thin-film solar company. They have a "string ribbon" technology for working w silicon, but it has nothing to do w thin film deposition, nothing at all.

China is definitely not the world's second biggest market - I don't know where that comes from. Spain was probably number two last year - since the Spanish subsidy change, no one knows who's number two this year. It could be the US. But it's not China. They're just getting started with their market.

Also, anyone who knows anything about installations would mention the role an inverter plays, rather than a "control system." (Why not just say "thingamajig"?)

The conversion efficiencies described are way off too. First Solar's thin film panels regularly convert 10% today. Commercially sold silicon panels today are more like 14-15%. Top lab-tested panels are at least in the high 20s, perhaps even more. These numbers make a difference.

The list goes on...

Three Things Obama Will Do to Advance Alternative Energy

I want to see an initiative to put solar on government buildings as much as the next guy, but I think it's premature to say it's "clear" such an initiative will occur. I for one have heard nothing definite on solar from Obama. The only energy "source" he has mentioned as a specific initiative in his transition is efficiency, specifically in schools. If he's made an actual statement that he's going to do something involving solar, I'd appreciate a reference. Otherwise, nothing is "clear" when politics are involved.

"Companies who have domestic production should benefit, including FSLR, STP SPWR, ENER." - Factual error. STP does not have domestic US production (if that's what the vague phrase "domestic production" meant). They have a US sales office, and now a US based installation venture, but no production. They've talked about building a US factory, but haven't yet bc of the credit crisis.

"Wind energy has been proven cheaper than solar and has achieved grid parity to some extent." - This shows a lack of understanding of what "grid parity" means. In California, Hawaii, Italy, and other markets, the annualized cost (over 20-25 years) of installing solar on a large home and the cost of buying grid power at current rates is equivalent. Tiered rates and peak power make a big difference. In places like Alabama, where electricity retails for 7c/kwh, solar's a long way off.

So to compare wind and solar in terms of an abstract "grid parity" is really not meaningful.

Evergreen Solar: Why This Overlooked Company Is a Good Investment

In the spirit of being truly anal (while not having legal expertise):

I would say that "Evergreen is a partner IN EverQ" would probably be the most accurate statement. I would say that it's germane to this discussion because Evergreen shares in EverQ losses as well as providing it financing. Perhaps this is what Honeycutt is trying to tell me.

Under German law:

German Regulatory Authorities Approve EverQ Partnership Agreements
21/12/2006 - 22:04

Evergreen Solar, Inc. (Nasdaq: ESLR), Q-Cells AG (FSE: QCE) and Renewable Energy Corporation ASA (OSEAX: REC.OL) (REC) today announced that regulatory authorities in Germany have approved previously announced partnership agreements that make the companies equal partners in EverQ, which manufactures solar modules in Thalheim, Germany. Effective December 19, 2006, all three partners will share equally in the net income generated by EverQ.

From the June 28 10-Q:

The Company is currently a one-third owner of EverQ GmbH (“EverQ”), a joint venture with Q-Cells AG (“Q-Cells”) and Renewable Energy Corporation ASA (“REC”), and licenses to EverQ its wafer manufacturing technology used to manufacture solar panels. The Company accounts for its ownership interest in EverQ using the equity method of accounting in accordance with APB 18 “Equity Method of Accounting for Investments in Common Stock.” Under the equity method of accounting, the Company reports its one-third share of EverQ’s net income or loss as a single line item in its condensed consolidated income statement and its investment in EverQ as a single line item in its condensed consolidated balance sheet.

EverQ Debt Guarantee
On April 30, 2007, the Company, Q-Cells and REC entered into a Guarantee and Undertaking Agreement in connection with EverQ entering into a loan agreement with a syndicate of lenders led by Deutsche Bank AG (the “Guarantee”). The loan agreement provides EverQ with aggregate borrowing availability of up to 142.0 million Euros. Pursuant to the Guarantee, the Company, Q-Cells and REC each agreed to guarantee a one-third portion of the loan outstanding, up to 30.0 million Euros of EverQ’s repayment obligations under the loan agreement.

Evergreen Solar: Why This Overlooked Company Is a Good Investment

I think you miss several boats:
-EverQ is a legal, not a figurative partnership. You don't get licensing revenue from a figurative partnership. EverQ is a joint venture between Evergreen, Q-Cells, and the Norwegian company REC. There's talk of making EverQ a separate company (could be a good IPO), but it hasn't happened yet.
- You don't mention Evergreen's involvement in Lehman's collapse. Lehman had borrowed 30 million ESLR shares as part of a hedging agreement. When Lehman went BK, suddenly it became possible that these shares might be sold off, not recovered by ESLR, and dilute the price. That's why the price lost 2-3 dollars recently. Lawsuit's in progress.
- You should take a closer look at world silicon supply. The more silicon supply comes on line, the cheaper regular panels get, the closer to a commodity they become, and the less compelling the ESLR technology becomes.

3 Reasons To Be Bullish on Solar Stocks - Cowen

Well, we give the oil companies billions in direct subsidies each year, and I hear they're at least breaking even. And you don't see us spending 500 billion per year, plus 150 billion in supplementals, on a military and navy in order to secure silicon. So at least some of our huge defense spending is an indirect subsidy. You also don't see us placing any value on carbon emissions - how much do you want to bet we're going to keep that policy in place?

Right now solar is a victim of its own success. Once the industry actually has the refined silicon to supply it, not just the semiconductor industry, then grid parity's getting close. The industry talk is generally 12-18 months for the silicon, and three to five years for grid parity pricing. There's your horizon.

Is Solar Power Inherently Deflationary?

Supershort - I wouldn't read too much about the viability of solar energy into the overvaluation of one company, SPWR (which, while not the best investment right now, is still an excellent, growing company).

I also don't know where you get this "they say the costs of the systems are increasing." Who is this "they," and to what systems to they refer? Sunpower has laid out a plan to cut installed system costs in half by 2012. Suntech is going to do them one better. While a silicon shortage has kept panel prices high, silicon production will more than triple over the next two years, more panel makers are getting in the game, so panel prices have nowhere to go but down. Competition is going to become fierce and bloody, in fact. And that's just for traditional silicon based PV panels - Nanosolar is selling 3rd Gen CIGS panels that generate at the price of coal - their main question is, can they scale?

Meanwhile, Akeena has designed an EZ install panel that cuts other system costs like labor and racking.

And that ten-year payoff you describe for a system (I assume your "investment" refers to a solar system, not a solar stock)? It's well worth it for a system that is guaranteed for 25 years by panel companies (and may last even longer, given past panel performance). It also assumes that electricity rates in a place like California remain flat going forward vs going up more - not too likely, right?

Yes, I have skin in the game (long Suntech and Akeena). Yes, I believe in solar from an ecological perspective. Yes, it's not going to be a fix-everything energy solution for the next five years (more nuclear could be needed too) - still a lot of growing for the industry to do. And yes, it may change a lot from its current form. Or perhaps not change, but diversify into a wider package of solutions.

However, I think that you really can't dismiss solar at this point. The subsidies needed to get the industry to grid parity (in the 2012 to 2015 realm) are nothing compared to the money our government already gives oil companies, not to mention the billions in defense spending for maintaining security in our Middle Eastern and now African filling stations. I think, long term, it's also the best single energy solution running - think of it as the real, original nuclear power, fusion energy at last. The sun is a giant reactor; all we have to do is find the best way(s) to plug in.