Solar stocks have suffered from serious volatility since 2008, when President Obama poured money into alternative energy programs. Reports from the EIA showing less than impressive progress away from traditional fossil fuels by the year 2035 were discouraging, both for government programs and for investors. Lately though, with fuel prices higher than ever and an executive agenda to cut dependence on foreign oil by 1/3, solar energy is back on the up and up. Now, against predictions from the EIA, there seems to be a renewed interest in widespread solar.. If this is indeed the case, not just the same green buzz we’ve been hearing for years, solar stocks could be back on an upswing.
One thing that’s different about the attention being awarded to solar energy is that this time is that it’s being bankrolled by Google (NASDAQ: GOOG). Wednesday morning, news broke that Google Inc. will begin funding a major project for BrightSource Energy involving the construction of three concentrated solar power plants in the Mojave Desert. Google’s $168 million equity investment is only part of a colossal financing package that that includes $300 million from NRG Energy and an additional $1.6 billion in loans from the federal government.
In addition to the recent developments at BrightSource, General Electric (NYSE: GE) announced plans to erect the largest solar plant in the U.S last week, an investment of $600 million. GE expects to make a fast return on the investment however; targeting $1 billion in sales within 5 years of its completion. GE expects the 400 megawatt plant to reach full production capacity by 2014. The new development was prompted by 12.8% efficiency on the GE’s solar panel.
GE was among the companies working toward higher solar integration when it was initially in focus, but exited the market two years ago. They are back, but this time, rather than compete in the Chinese dominated market of polysilicon, the company is looking toward- cadmium telluride (CdTe) panels. This could be the edge American companies need to compete with China who are moving forward with solar plans at a rate that far exceeds current U.S. progress.
Recently, GE acquired PrimeStar Solar, and Converteam, which focuses on the integration of solar power onto the grid. China, for its part, recently announced intentions to double its solar capacity in the near future which would do little to benefit GE or American solar companies but would at the very least set an example for how to integrate solar into the grid on a large scale.
Investors prepared for a wild ride might want to consider solar power as an option. With nuclear l0oking less appealing and no new developments in wind, green interested investors should consider solar stocks again. Taking a long position here would be best, maybe even beginning next week once media attention surrounding recent deals die down and stock prices fall lower. The current infrastructure developments seem to indicate solar will be significantly more prevalent in the next 5 years.
Today in trading, Solar stocks including First Solar (NASDAQ: FSLR), JA Solar (NASDAQ: JASO), and Suntech Power (NYSE: STPD) all pushed sharply higher today on all the sector buzz. Other winners included GT Solar International Inc., (NASDAQ:SOLR) and Coherent Inc (NASDAQ:COHR)