Monday, December 8, 2008

Commentary: Solar Stocks Going Mainstream

About a week ago I installed the free MarketBrowser program ( that will track up to twelve major stock indexes and specific stocks of choice. Stock prices are up
dated every 20 minutes and can be viewed by list or graphically by charts. I remember in the late 70s early 80s delayed stock quotes in your desktop made a company called Quotron a lot of money. Today, with Internet access this service is free.

I selected the Dow Jones Industrial Average and the NASDAQ exchange as my overall stock barometers. Then I chose ten of the most prominent solar stocks to follow. These are Canadian Solar, Energy Conversion Devices (UniSolar), First Solar, SolarFun, Suntech, LDK Solar, JA Solar, SunPower, Renesola and Evergreen Solar. This international mix of companies are among the major players with the stay power to get them through the recession.

Just glancing over all 12 year-at-a-glance charts one can easily notice that nine of the ten solar stocks closely paralleled the DJIA and NASDAQ indexes (ECD-UniSolar the exception). Most started considerably higher in January; dipped in the spring; surged a little in the summer; and began the taper down with the banking failures starting in September. Just like DJIA and NASDAQ. Granted, solar stocks can be volatile but that's not unusual for companies in an emerging industry. If anything, solar stocks are looking more mainstream than ever before.

Solar stocks have taken a beating this year but then what stocks (beside defense or oil stocks-- one protecting the other), haven't had a bad year? Still, solar has shown a 25-40% annual growth rate since 1996 and even if there is a lull because of the credit crisis, the demand for solar power should not wane.

As I explained in my Nov. 26 post, there are many reasons the solar industry could be bullish for the economy. The Wall Street bailout included the solar investment tax credit extension through 2016. Residential solar buyers beginning Jan. 1 can claim a full 30% income tax credit on the price of a home installation, a credit that's been capped at $2000. Investor-owned utilities, formerly exempted from the tax credit, can claim it, too, beginning next year. This is particularly key for California utilities that are mandated to have 20% of there energy production from renewable sources by 2010, 30% by 2020.

The growth of solar companies will also be an answer to the dearth of jobs nationwide while it helps cut carbon emissions. If the Obama Administration institutes a formal carbon cap-and-trade program, it will be a boon to solar--and wind, geothermal--as well.

The day will come when solar units--whether for power or hot water or both--will be as ubiquitous on houses and buildings as computers are inside them. Mark my words.


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