Is Solar Too Cheap?

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Is Solar Too Cheap? By Nick Hodge | Wednesday, November 21st, 2012 We've seen what happens when crony capitalism enters the energy industry. Today if you type in the ticker symbol of multiple clean energy companies that received government funds, you'll get the same error message: TICKER NO LONGER VALID. That's because scores of them have been delisted. Bankrupt, in bankruptcy, or on the verge of it. Evergreen Solar (ESLR)... Satcon Technology (SATC)... A123 Systems (AONE)... Ener1 (HEV)... They're all gone, completely erased from stock market history or trading for pennies on Pink Sheets as former hulls of themselves. Much of this is because the government bet on friends and supporters instead of technology that can compete in the real world. The key to successful clean energy is to lower the cost, not to reinvent the wheel. But that's precisely what failed solar companies like Solyndra were trying to do... Solyndra was trying to perfect expensive copper indium gallium selenide (CIGS) solar cells. These types of cells are still just a tiny sliver of a market still dominated by silicon. Silicon solar still accounts for over 80% of the market. It will be improvements and cost reduction in this area that will lead to widespread adoption and profits. Advertisement U.S. to Export Oil? U.S. oil exports have been banned since 1975. But with oil production booming, some U.S. oil would fetch higher prices overseas. Higher prices will mean higher stock prices for these three sub-$10 Bakken oil stocks. Here's why...  Record Growth Continues As we approach 2013, we're starting to get an idea of what the year looked like for solar installations. I've told you already this year that 2011 was actually a great year for solar investments, with $91.6 billion changing hands for a 20% improvement over 2010's $71.2 billion. But this year looks like it's going to be even better... Installations in the first quarter this year were 83% higher than 2011. Installations in the second quarter were over 115% higher! The trajectory is only moving higher: So solar investment is up. Solar installations are up. And that's all great. So, then why does a chart of solar stocks look like this? If so many solar panels are being sold, why is every stock in the industry from First Solar to Sunpower to Suntech down over 80% since 2008? The answer is simple yet misunderstood. It's because prices have been falling so fast and solar panels have turned into a commodity. Think about it. If a company produces oil for $100 per barrel, it can't make a profit when oil is below $100 per barrel. Same thing in solar — but instead of a “per barrel” price, solar has “Average Selling Prices.” And they've been falling extremely fast. In the first quarter of 2011 solar panels were selling for $1.56 per watt. Today they're selling for less than $0.90 per watt. And if a company can't cut its own costs fast enough... it won't make a profit, and it will be forced to close like our friend Solyndra. Advertisement Is This Tech Firm's Rally Unstoppable? Nobody's talking about it — yet. But for the past six months, a tiny upstate New York tech firm has quietly tripled investors' money. It's all thanks to a unique breakthrough that — according to sources — is only a few months away from turning the global energy structure on its head. Before that happens, this rare video footage details what you need to do right now, before the share price triples again.  This is counterintuitive because all you hear is that solar is too expensive. As the selling price falls, demand is surging. Installations are growing faster than ever while solar companies continue to struggle. This industry isn't dead by any means. As soon as production costs fall enough to increase margins and grow profits, solar companies will be in for a major turnaround. And the solar industry is still so small it will produce huge percentage growth for years to come... The time to buy is now, while the blood is in the street. Solar investments will expand to $130.5 billion by 2021. The key to profits for you will be investing in the companies that do the most for reducing the cost of solar. It's not going to be the popular solar names you've probably already heard of. Those guys will be fighting for pennies per panel. Instead, I've found one company that has a special coating process that all other solar companies can use. It's a simple process that can double the output of current panels while cutting the cost in half. And this company will license to any solar production company. The stock is still below a dollar, but customers are lined up from North America, Europe, and Asia. It's happening very quickly. This market will take a lot of investors by storm and it will leave naysayers in the dust. Don't be one of the latter. Now is the time to invest in the solar game-changer that doesn't need government handouts. Make sure you see it here first. Call it like you see it, Nick Hodge @nickchodge on Twitter Nick is an editor of Energy & Capital and the Investment Director of the thousands-strong stock advisory, Early Advantage. Co-author of the best-selling book Investing in Renewable Energy: Making Money on Green Chip Stocks, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's page.   I liked this article | I did not like this article Follow Energy and Capital on The Bottom Line Related Articles The Solar Blood is in the Street First Solar (NASDAQ: FSLR) May Supply World's Biggest Solar Farm Solar Takes a Tumble Solar Investing Recently... 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