This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

The Solar Bears Are Wrong

NEW YORK (TheStreet) -- Right now, some 2,400 solar installations with 43 gigawatts of power are at some stage of the building process. They will make the U.S. the world's third-largest solar market.

Yet, there is an immense bearish pressure being applied to solar energy these days:

  • Arizona has imposed a fee of roughly $5/month on all solar panels, for connecting to the grid. Such taxes tend to increase with time.
  • New Mexico has cut solar's share in its renewable energy mix, reducing the value of solar energy credits and increasing the value of those devoted to geothermal energy.
  • In Europe, which has 76% of the world's solar panel energy (Germany alone has 30% of the total), subsidies have been cut back repeatedly in recent years.

Renewable energy "skepticism" has replaced pure denialism, but its policy choices are the same. Bjorn Lomborg, an adjunct professor in Copenhagen who got his degree at the University of Georgia, is the cover boy for the new movement. In books like Cool It he calls renewable energy subsidies inefficient.

But there are some much better reasons to ignore the solar bears and look favorably on stocks like First Solar  (FSLR), up 89% this year; SolarCity  (SCTY), which has nearly tripled in 2013 and SunPower  (SPWR), up a whopping 431% for 2013 alone.

There have also been gains in the previously beaten-down Chinese solar sector. Industry leader Yingli Green  (YGE) is up almost 128%, Hanwha Solarone  (HSOL) is up 256%, and Jinko Solar Holding  (JKE) has quadrupled in value this year.

The economics of solar have changed.

The Institute for Global Self Reliance offers a "solar parity map" that shows that, by next year, 18 states will have solar costs in line with those of other grid energy -- without subsidies of any kind.

Add in the 30% federal tax credit due to expire at the end of 2016 and nearly the whole country has already reached parity. When it falls to 10%, only nine states will find solar power uneconomic on those terms.

The solar industry has also learned to tap the capital markets. It started a few years ago, with First Solar finding it could develop large projects for utilities and then sell them on to companies like Mid-American Energy, a unit of Berkshire-Hathaway  (BRK.A).

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs