GH

Options Trader: Wednesday Outlook

When did "Mark Anthony" start writing your columns for you? Most of what you said about First Solar is false.

Gold and Oil Price Limits

Zenalgorithm: You apparently don't understand the difference between atoms and their components (quarks such as protons, neutrons, and electrons). Nanotechnology can build structures from individual atoms, but it cannot change an atom of one element into an atom of another element.

Nuclear fission and fusion can do that... but you don't want to mess with those.

Will LDK's New Company Create Competition for First Solar?

Mark,

Why do you think "competition is going to be brutal" ? In "commodity" industries, tiny advantages are the only differences and competition is fierce. However, in the solar power business, technological differences create major differences in product characteristics, and will allow many different players to prosper for the forseeable future.

OatLeaksBeans, I think your guess is correct. China is a sufficient customer to keep *any* business busy, never mind a clean energy business! And China has huge expanses of undeveloped high-insolation land: perfect for giant solar photovoltaic arrays.

New Competition in Smart Meters for Itron

Mr. Trent,

Thank you for writing an article that's positive yet skeptical. This is a standard to which all investment writers should aspire, yet few seem to even understand.

In my opinion, you should not tie yourself down in any way to the likes of SeekingAlpha, if better partners present themselves. You are better than this venue.

SunPower Heats Up Portfolios

supershort,

When you simply make up numbers, why should anyone believe anything you post?

SPWR's short interest was 15.8% of float as of 10-Apr. The trailing P/E ratio is about 300 - and anyone who knows anything knows that number is irrelevant for a growth stock, the relevant one is the PEG ratio, which is 0.99, well under 2 which is the level where growth stocks start to look over-bought.

Get a real job.

Trina Solar: Best Value in the Solar Space

Jack,

Check out
nickgogerty.typepad.co...

I believe his work supports your thesis that solar is already at grid parity.

- GH

Trina Solar: Best Value in the Solar Space

I just noticed you asked for specifics on the other companies I like.

ORA - solidly established interational leader in electricity generation from geothermal and recovered-heat sources. Dividend-paying. This is not a pre-profit company; it's much closer to what you write these articles about. Geothermal per-kw costs passed grid parity several years ago, IMO.

OPTT - best investment (IMHO) in the area of ocean-wave power generation. Well beyond the proof-of-concept stage; the technology is proven and they are deploying significant first-tier projects at this point, as well as continuing R&D to scale up to very large projects. These devices effectively tap into a similar energy stream as off-shore wind turbines but IMO this is ultimately a much lower-cost approach, since off-shore wind turbines are incredibly expensive and difficult to maintain. Also definitely better from environmental and NIMBY perspectives.

ENON - one of several I like in the area of lithium-ion batteries. The current state of the battery art is that lithium-ion are going to replace the nickel-metal-hydride batteries currently used by hybrid-electric cars, enabling plug-in hybrids and pure-electric cars. Moreover, the next step after that is these batteries may well become cost-efficient enough to provide the load-filling required by the addition to the grid of large-scale solar and wind generation. Another to watch for in this area would be an IPO by A123 Systems.

CREE - positioned to lead the inevitable transition to LED-based lighting, which with economies of scale I believe will have even cheaper lifetime costs than compact flourescent.

- GH

Trina Solar: Best Value in the Solar Space

Jack,

I think your reference to Venture Capital investing shows we're actually in complete agreement about the potential for pre-profit companies. The idea of VC, of course, is to take manageable losses on most investments but be more than compensated by the huge gains on the winners.

Besides CPTC, I like a long list but to pick one from each energy-related sub-category that I follow, I like ORA, OPTT, ENON, and CREE.

CPTC is a somewhat odd story, in that they had a solid but temporarily struggling business selling next-generation power transmission lines - which are selling like hotcakes in China and should do fantastically well in the U.S. if we ever figure out how to finance upgrading our power grid. Basically you replace old high-tension lines with these new carbon-fiber-core ones, and you get much improved current-carrying capacity as well as lower losses... on the existing towers and rights-of-way. The lower losses are like increasing generating capacity without burning any more fuel.

The cables have been established as meeting U.S. industrial specs, etc., so, that should be a great business if they're just patient and keep finding places where their cable can prove itself... but then, as that process was proceeding, CPTC's management discovered DeWind at a fire-sale price... and bought it. Various merriment, including a brush with Chapter 11, ensued... but DeWind is a compelling story. Their turbine applies torque-converter technology to eliminate the most frequent cause of wind turbine failure (gearbox problems) - as well as a significant initial and ongoing maintenance cost (inverters). They've recently passed various third-party tests, and set up an insurance deal to calm the concerns of wind farm builders who would like to see a longer track record. As a student of engineering the advantages of their turbines are obvious to me, but of course those subtleties don't make much of an impression on people who finance wind farms.

Pure plays in transmission-line infrastructure improvement and wind-turbine production are extremely hard to find in the U.S. - and CPTC is both. I can't figure out whether CPTC's management are whackos or geniuses... but they're certainly interesting!

Green Energy Prospecting: Eye on Ocean Power Technologies

Stan,

Good to see someone noticing OPT. I can't quite praise your article as strongly as others have - frankly I think you need some help with your editing/proofreading process - but it inspired a response from "Alt Energy Analyst" that was outstanding in its accuracy and scope, IMHO. Also, NickGogerty's response led me to his blog, which is the first place I've seen a decent comparison of true costs of energy generation. We constantly hear "wind costs 6 cents/kwh, coal costs 4 cents", etc. - and this sort of information, while it is constantly repeated in the mass media, is a great example of lying by omission. Without a stated payback period, a given energy generation cost is utterly meaningless. For example, in the second year of operation, a coal plant's operating cost is almost entirely fuel cost. By that standard, wind, solar, geothermal, and ocean wave cost absolutely nothing. It is only by specifying a period over which construction costs are amortized, that a cost per kilowatt hour can be calculated.

So, thank you Stan for taking a first shot at analyzing OPT, and AltEnergyAnalyst and NickGogerty for extremely valuable responses.

Major Corporate Shift to Solar Energy and LEDs

Petya,

You have some of your "facts" utterly wrong:

ANWR is far from barren. It is a wildlife preserve, filled with birds, fish, and animals of all descriptions.

3 mile Island *did* release radioactivity into the atmosphere. Not large amounts, but significant enough to measure downwind. Moreover, the failed generator has yet to be repaired or remediated, due I believe to the level of radioactivity within the containment vessel.

Bulbs,
The problem is not the lighting level; they're plenty bright enough for large-scale outdoor lighting! The problem is simply up-front cost; people are used to paying for lighting slowly, a little up front and the rest over the (short, inefficient) life of the bulb. Typical total expenditure for a 75-watt bulb and power to light it is on the order of $100 for the 2 years it lasts in typical residential usage. It can be replaced by an LED-based bulb that costs $50 and lasts 30 years... but so far few except accountants and CFOs can get their heads around "spending $50 for a light bulb".

Trina Solar: Best Value in the Solar Space

Jack,

I posted a response a month or so ago when you stated that there were no pure U.S. wind plays. The closest is CPTC, which had as its primary business carbon-fiber-based high-performance power transmission cables. They purchased DeWind (a wind-turbine manufacturer) some time ago at a fire-sale price.

No, they're not currently profitable... but neither was FSLR when I bought it in November 06. In my opinion your insistence on use of P-E based criteria, which forces you to exclude not-yet-profitable companies, will prevent you from tapping into the best parts of the growth curves in the alternative energy sector.

In other words: right sector, but inappropriate trading criteria.

Ormat Should Benefit from the Ethanol Backlash

"As global warming alarmists convinced legislators and the media that we need to pour money into ethanol in order to solve the global warming “crisis,” and use it as an alternative to crude oil."

There are several errors backing up the innuendo in your statement quoted above. No knowledgeable environmentalist supports ethanol made from substances usable as food. It was yet another blunder from the Bush administration pandering to midwestern factory farmers.

Your writing is a waste of your time and ours. Go get an honest job.

Hansen's Natural: Curious Check Scam Announcement

Herb,

That announcement has been there for months.

SunPower Chairman Doesn't Talk Green

Fred,

Sadly, you're wrong. Environmental concerns drive some end users, but not enough to keep the industry going. The only green in which Wall Street is interested is on their watchlists (they don't use cash). Politicians, for the most part, also don't care what happens to the world beyond the next election. The only green they care about is in the suitcases full of campaign contribution cash they get from lobbiests.

What is driving the solar industry is that Wall Street and Washington have recognized that it is The Next Big Thing. To them it's just another bandwagon to hop on for a free ride. If it happens to save the world, that's nice, and they'll be happy to take credit for it.

Invest with your eyes open, friend.

An Energy Policy that Makes Cents (and Sense)

I'm with you philosophically, but you have a lot of obvious misperceptions here.

- Just taking coal out of the ground ruins the environment; no need to burn it.
- Just like coal, nuclear doesn't make sense unless you ignore the pollution it generates and the lost real estate and water. In 50 years of trying the waste issue hasn't been solved; stop throwing money at lost causes.
- Additional coastal exploration for fossil fuels damages a key ecosystem from which we're getting food.

I could go on. My only point is: go back to the books, you have a lot more to learn.