Will THIS Kill the Solar Industry?

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Berkshire Hathaway Beat-Down Would you rather invest $1,000 and have it turn into: $500,000 in 3 months? $400,000 in 34 years? Full disclosure: These are real trades — and obviously there's a clear winner. But here's what's nuts... That winning trade was delivered by the most elite investment collective you've never heard of, while the example it trounced was none other than Warren Buffett's Berkshire Hathaway. Will THIS Kill the Solar Industry? By Jeff Siegel | Friday, September 18th, 2015 I’m quite certain the rapidly depleting legions of solar naysayers are licking their chops... Despite continued and rapid growth in the sector, solar investors are starting to get a bit nervous. Why? Because one of the greatest facilitators of growth for the solar industry is at risk of disappearing. My Prediction In 2006, the solar industry was gifted the solar investment tax credit (ITC). The ITC is a 30% tax credit for solar power systems on both residential and commercial properties. The ITC is set to expire at the end of 2016. Although the solar industry is a fully functional, multibillion-dollar industry today, the ITC is still a vital component of the industry’s growth. In the presence of the ITC, the road to grid parity is a pretty smooth one — at least in comparison to how it would be in the absence of the ITC. That doesn’t mean the solar industry will crash and burn if the ITC expires. But it does mean there will be more risk for investors. Scaling will slow considerably, jobs will be lost, and, rest assured, the bears will come out swinging. Advertisement Weird satellite image reveals hidden $1.2 billion windfall This photo of the Bakken oilfield shows something very peculiar... It's a strange, never-before-seen phenomenon this energy boom is causing... something that's never happened in America before. But it's created the opportunity for ordinary investors to pocket millions — regardless of what happens to oil prices. Click here to see this photo — and this unusual story — right now. So here’s my prediction... The solar industry is going to fight as hard as it can to ensure at least a five-year extension of the ITC. And if Obama wants little resistance to the implementation of this Clean Power Plan, he is likely to really get behind this thing. That being said, if an extension is offered, I’m not convinced it’ll be for five years. If Congress treats the solar industry the same way it’s treated the wind industry, it’ll get a one- to two-year extension with promises of “more to come.” “More to come” all depends upon who’s in Congress and who’s in the White House. Another reason I absolutely hate the fact that the government is involved in the energy space. Regardless, the extension of the ITC really hinges on whether or not it can be included in a larger bill. As a standalone, I can’t image it’ll get much love. But if it’s bundled, a one- to two-year extension is entirely possible. Of course, the real question here is when will the solar industry finally be able to compete without the ITC? The answer: It could do it right now if it wasn’t competing against heavily subsidized fossil fuel and nuclear industries. But I don’t have a dog in that fight. It’s a losing proposition... always has been. So instead of harping on the unfairness of an energy economy dictated by a bunch of bureaucrats, I’ll focus on the reality of it all: In a real free market, solar is already competitive. But since there is no real free market in the energy game, we must invest accordingly. Advertisement Write down this date: November 3, 2015 Why? Because that’s when Uber’s pre-IPO event will go live. The company could IPO any time, and few people realize the time to make the big money is BEFORE that happens. Recent pre-IPO events have already brought investors gains of 227% and 259%. Here’s why Uber’s could be three times as profitable if you know how to play it. The Pre-ITC Rush The rush to install as much solar as possible before the expiration of the ITC is going to give the industry a huge boost in 2016. So regardless of what may or may not happen with the ITC, in the near term, you should continue to have some exposure to the solar space. Some of the key players set to benefit the most from a pre-ITC expiration rush include: SunEdison (NYSE: SUNE) SolarEdge (NASDAQ: SEDG) SunPower (NASDAQ: SPWR) SolarCity (NASDAQ: SCTY) First Solar (NASDAQ: FSLR) As more develops with the ITC, we’ll keep you posted. To a new way of life and a new generation of wealth... Jeff Siegel @JeffSiegel on Twitter Jeff is the managing editor of Energy and Capital and contributing analyst for the Energy Investor, an independent investment research service focusing primarily on stocks in the oil & gas, modern energy and infrastructure markets.  He has been a featured guest on Fox, CNBC, and Bloomberg Asia, and is the author of the best-selling book, Investing in Renewable Energy: Making Money on Green Chip Stocks. For more on Jeff, go to his editor's page. I liked this article | I did not like this article Follow Energy and Capital on The Bottom Line Related Articles Jim Chanos Got it Wrong on SolarCity (NASDAQ: SCTY) Investing in the Future of Solar Investing in an Energy Audit Recently... Capitalizing on this "Connected Enterprise" Innovation and Energy Production Make Solar a Hit Why You Shouldn't Just Think "Tesla" with Lithium Batteries Time to Buy the Bakken The Safest Energy Investment You Can Make

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