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Al Gore Walks Away From Green Energy

This is "urgent action on climate"? If you say so, Mr. Gore.

If Generation Investment is a bit gun-shy on alternative energy, perhaps it is because of its catastrophic brush with First Solar.

Data from Best Stocks Now app

Three years ago, First Solar seemed on its way: Interest in solar was at an all-time-high -- as were subsidies for making, installing and using it. So America's largest manufacturer of solar equipment seemed ready to cash in.

So did Generation Investment. According to SEC filings, Gore's company bought 440,000 shares in late 2010 at about $130. By the first quarter of 2012, the value of First Solar -- and just about every other solar manufacturer in America -- had plummeted.

Generation Investment rode it all the way down, buying more and more shares as the price went lower and lower until finally it reached $25 in the first quarter of 2012. Generation Investment was holding 1.1 million shares worth about $28 million.

All this despite $3 billion in loan guarantees that kept many analysts talking about its great future. But the stock was always more popular with true believers in solar energy than with people who want to make money.

In the second quarter of this year, Gore et al. finally figured out what I have been saying to my clients, my listeners and my readers for two years: Alternative energy is a terrible investment and "sell everything under the sun." That's why I started shorting First Solar at $121 and kept shorting it all the way down to $33.

You can read about it in my SeekingAlpha article "How Does First Solar Survive?"

Filings for the next period show First Solar had disappeared from its portfolio -- with Generation Investment selling its shares for somewhere between $12 and $25.

Not all of Generation Investment's portfolio is listed with the SEC. The company also invests with the KPCB Green Growth Fund and the Eco products fund, which also invest in public and private companies.

The "Client Update" is very cagey about how much and where Generation Investment puts its money. But it did list several firms as part of its portfolio that do not show up in SEC filings. Including:

  • Germany's largest solar company, SMA Solar. It, too, was part of a multimillion-dollar loan guarantee, this one from the Export-Import Bank, a federal agency. SMA has gone down 57% over the last year.
  • Over in China, SunTech Solar is the world's largest maker of solar panels. Gore likes it enough to list it in his "Client Update," even if the company is falling out of favor with its Chinese masters who have made solar the most heavily subsidized industry in the world.
    SunTech has lost 82% of its value over the last year. Others in the Chinese solar panel business are not faring much better.
  • Meyer Burger, a German solar company, lost 49.6% of its value over the last year.
  • EcoSynthetix transforms "renewable resources into high performance biomaterials that replace petroleum based chemicals." What it does not do is convert investors into winners. Its stock has fallen about 60% since its initial public offering last summer.
  • Landi Renzo helps convert cars from gasoline to natural gas. Its stock is down 25% over its one-year high.

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