An investment in solar power is one way to get into the energy market. A number of analysts feel that because of the gas and oil revolution brought on by fracking alternative energy no longer is a viable investment. It is still feasible if one invests in a company that is well managed and has good products for the consumer market.
It is true that solar power in North America will make less sense with the abundant supplies of natural gas at affordable prices. However, there will still be a need for alternative energy especially in places there that have the climate suited to this kind of technology like the Southwest part of the United States.
In California alone the year 2013 saw the installation of 30 years worth of solar units.
The relatively lower price in fossil fuels will actually foster new technologies that will force the lowering of the price for the production of solar power. The problem with alternative energy has not been lack of interest or promotion it has been cost to the consumer.
There are three main ways at present to harness the power of the sun. One is passive solar energy. This is just a modification in architectural design. The way the building is constructed by the placement of windows, doors and rooms that allow heating and cooling to take place more efficiently.
The most common utilization is solar photovoltaic power. This is where the rays of the sun is converted into electricity through the use of solar panels. However, the solar power generated is dependent on the amount of sun the area receives.
The other method is solar thermal energy. It uses solar thermal collectors to collect heat energy and disperse it through water to the heating and plumbing systems. This form is the cheapest way to utilize the power of the sun at present.
In North America it is true that the solar power industry will need to ween itself off of government support and subsidy as the politics there is likely to change. Again this might be a good thing in forcing companies that do not have a good business model out of the competition in the industry.
It is important to note that there are a number of countries that will continue to have to import high cost fossil fuels so they will continue to invest and expand the market for solar energy.
One only need to look at what is happening in the energy industry in Europe and East Asia to see that solar power will definitely have a future. The question is how fast will the conversion from fossil to alternative energy take place. It comes down to price and the willingness of the governments there to support the change in the infrastructure. Power grids need to be modified to allow the full utilization of alternative energies.
In some countries the switch to solar power is not surprising given the climate in existence there. Australia for example celebrated two milestones recently. In January of 2014 it was announced that there were now 2 million small scale solar installations in the country. The figure included 1.1 million rooftop solar systems and about 842,000 solar hot water systems.
What is amazing was the speed between the first and second announcement. Eight months earlier the Australians had announced the reaching of the first million installations.
Two explanations can be presented how this happened. First is the falling solar panels prices and second is the financial incentives put in place by the government. Australia has announced the goal that 20% of the nation’s energy needs will be from renewable sources by 2020.
Also in January of this year the United Kingdom announced that 500,000 homes are now solar powered half way to the goal of 1 million homes by 2015.
In the United Kingdom the conversion has picked up speed since homeowners are guaranteed a set price for every watt of clean electricity they send to the power grid.
The most remarkable story for the industry though is the case in Germany. It is already the world’s largest producer of solar energy. By the end of January of this year the Germans became the world’s top photovoltaic (PV) installer in the world with a capacity of 35.886 gigawatts (GW). The rate of conversion is doubling every 1.5 years.
In 2011 Germany got 3% of its total electrical needs from solar power by 2050 is to reach 25%. The goal of German government at this time is to produce 35% of its electrical needs from renewables by 2020 and 100% by 2050. In 2014 renewables are already generating 22% of power needs with solar providing close to a quarter of that.
The southern German state of Bavaria alone has more installed solar capacity than the entire United States. This was achieved despite having a climate not exactly conducive to the production of solar energy.
What makes this feasible in Germany as well as Italy and Spain is that the price for solar power there already matches conventional energy prices.
Japan is a leading manufacturer of solar panels and is in the top 5 ranking for countries with the most solar PV installed. Until recently 1% of Japan’s energy needs came from solar power. The nuclear accident at Fukushima power plant in 2011 changed all that. In 2013 alone enough solar power panels were installed to replace the power generated by 7 nuclear power plants.
China is also beginning to invest larger amounts of money for alternative sources of energy with a special emphasis on solar power. China in 2013 was the fastest growing PV market in the world.
The expanding market for solar power around the world is why this writer is recommending an investment in the industry. After careful consideration the company of choice would be SolarCity Corporation (SCTY).
At that close of the business day on March 27, 2014 SCTY stock stood at $60.74 USD. It had increased .62 cents USD for the day for a 1.03% increase for the day. Given the present price of fossil fuels I feel the stock in this company is a bit undervalued. The stock’s range for the day was from a low of $55.62 USD to a high of $61.85 USD.
The 52 week range has been as low as 18.00 to a high of 88.35. The average volume traded is around 5 million and market capitalization stands at 5.56 billion.
An investment in the company can be for a short term profit in the stock market price per share or a long term investment in the industry itself.
SolarCity Corporation located in San Mateo California designs, installs, and sells or leases solar energy systems to residential, commercial and government entities in the United States.
The company offers energy efficient products and services as well as a proprietary battery management system, which is designed to enable remote, bidirectional control of distributed energy storage. The company also sells electricity generated by solar energy systems to customers.