CT Programmer

Catching the Next Bubble

Has User 154263 actually priced a solar system for his house? First of all, I have, and you typically don't have enough roof space to generate 100% of your electricity needs. Covering about 3/4 of my south-side facing roof would generate maybe a third to half of my electricity usage (and that's just the electricity --- doesn't do anything for my home heating which generally costs me 2-3x what my electricity costs are). Yes, the technology will get better, but not until a viable silicon alternative is mainstream. And it won't be a "breakthrough". It will be gradual increases in efficiency and output over time. Also, right now in CT for a solar system you're looking at about 15 years to the break-even point where you've paid it off and are actually profiting from it. And that's with HUGE federal and state subsidies that essentially pay for half of the hardware. Good investment, but its a long-term investment and you'd end up replacing it at the 15-year mark anyway because it would be antiquated. User 154263's vision of "100% solar energy" is a long way off. The last few years have had a glut of Chinese aluminum siding companies switch over to solar cell manufacturers. They are highly inefficient and the raw materials are expensive and their management is lousy. The bubble on those has popped already. TSL was trading as high as $70 and is now at $40 (PE 26). STP was as high as $85 and is now $44 (PE of 43). FSLR started at $60 and is currently $273, but its PE is 133 (can you say "Pop"?)!!! FSLR is 3.44% of PBW. When that one gets chopped in 1/2 or 2/3 that is at least 1-2% off the top of PBW, probably more due to shock value because it will take the others down with it. Of course, that might be a good buy-in time.

If you read General Cable's (BGC) annual report, they are banking a lot on off-shore wind farms and running the cables out to them. Also, if you follow a company like Maxwell (MXWL), which still isn't profitable, they are pushing the envelope on super-capacitor batteries for applications like electric cars.

There are a lot of technologies out there, and the idea that there will be one "Google" solution isn't realistic. Look at home heating. Some areas use oil, some gas, some electric. It's a mix. And you have tons of companies involved. I don't see a "bubble" per se as opposed to a gradual shift from conventional energy technology to "alternative" energy technology as those scale up and drive the prices gradually down (and as oil and gas prices go up).

I am long on PBW as well, but I'm also long on CHK, SLB, EEP and OKS.