Thursday, January 22, 2009

Commentary: Invest in Solar NOW

Even the casual observer of U.S. stock markets would know there's only a minuscule amount of publicly-traded companies doing well. Even the Blue Chips--what's left of them--are down. Renewable energy stocks are taking hits, too, and such solar biggies as First Solar, SunPower and Applied Materials are not immune.

So why invest...

In Solar Stocks? Barack Obama mentioned solar power in his inaugural speech on Tuesday. He has pledged to work with Congress on pushing solar power for immediate manufacturing and installation jobs; stimulating more solar R&D; reducing dependence of coal and natural gas; and, in the process, cutting carbon emissions worldwide. No other industry today can offer so much potential for return on investment and social betterment. Besides, contrarian investors should see solar stocks as sure-fire buys. (Check Solar Stocks Update here every Saturday.)

In Solar at Home? Starting January 1, residential solar installations qualify for a 30% tax credit of the purchase price. Many states have adopted their own solar tax credits and rebates to make going solar a sweeter deal. Contrary to some thinking, solar makes sense in all 50 states. In fact, a PV system will perform slightly better on a cold clear day in Michigan than on a hot day in Arizona. Why invest now? Because several states are so cash strapped they're considering reducing or dropping solar incentives to generate income for their general funds. As we've seen over the past six months, financial benies can be fleeting. Stated simply, the best solar incentives we may see for awhile are the ones we have RIGHT NOW.

In Solar for Business? Last spring the CEO of Southern California Edison said the price of electricity from the utility would double in five years. This could change if we go into a depression but who knows for sure? State and federal government nurtures solar investments with rebates, a 30% federal tax credit, five-year accelerated depreciation and business investment tax credit. If the Obama Administration institutes a formal carbon cap-and-trade program, then solarized businesses will also be able to sell their carbon credits annually to offset pollution generated by other companies. Europe has been doing this for years. And remember, savings on electricity begins the moment a photovoltaic system is commissioned and producing energy. Systems can last 30 years or more. No other working investment offers such reliability and longevity.

We're all facing financial challenges right now. We're learning or re-learning a common sense approach to discretionary spending. Solar power's future makes sense as a stock investment. Solar power makes sense at home and at work because it mitigates future electricity costs as it cleans the air and slows global warming.


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