Monday, July 21, 2008

Solar: "Forecast: Clouds With Sunshine"

From Barron's via MarketWatch:
SO HERE'S THE DILEMMA about solar stocks.

For a host of reasons, the industry is going mainstream. Sunshine is free and nearly limitless. It creates no greenhouse gases. And there is no solar equivalent of Hugo Chavez or Mahmoud Ahmadinejad. You'd have to be a Saudi sheikh not to be rooting for solar to boot fossil fuels from the playing field. And some day, that might actually happen, which explains the explosion in the number of publicly traded solar stocks. (See the table " Solar-Heated Prices ".) Optimists think the U.S. could be generating 10% of its electricity from solar 10 or 15 years out. Or think bigger: Scientific American published a scheme late last year for producing 69% of U.S. electricity from solar by 2050.
But investors aren't placing bets on 2050; they're worrying about the September quarter, or for the forward-looking members of the crowd, 2009. And for the near-term, the sector faces a tricky landscape -- in particular, shifting attitudes on government subsidies in some key markets, and an imminent price drop for polysilicon, the raw material from which most solar cells are made. If you stay focused on the long-term, and place the right bets, you could make a fortune. But things could be dicey along the way....MUCH MORE