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The Secrets of Solar

Posted August 1, 2008

Krista Das on TFN Market Insights The alternative energy industry is really beginning to gain traction. Solar stocks in particular are taking off. Nick Hodge of Alternative Energy Speculator tells us where to find the most profitable areas in solar.

by Krista Das

Baltimore — (TFN): The alternative energy is really beginning to gain traction. The industry as a whole has had time to mature and a lot of the guesswork has been taken out of the equation. Solar stocks in particular are taking off.

On the show today is Nick Hodge, editor of Alternative Energy Speculator who is going to tell us where to find the most profitable areas in solar.

Nick, welcome to Market Insights.

With rising oil and gas prices and the threats of global warming, consumers are finally buying into alternative energy that is pushing stock prices upward. What share of the energy’s market does solar currently hold?

Nick Hodge: You know, that’s actually a funny question. For all the money that’s been made in the solar industry and all the media attention that it’s garnered, solar still only produces less than one percent of our total worldwide electricity.

That’s also what’s exciting about the industry since we have so much room for growth and we’re now creating economies of scale, costs are coming down.

We’re seeing states mandate that a certain percentage of their electricity come from solar and we’re also seeing favorable conditions in Europe and the Mediterranean bases in countries like Spain, Italy, Greece where favorable laws are coming to the table that are allowing solar to be installed at a much more rapid pace.

Krista Das: So then how much do you predict that this industry is going to grow in say the next five, ten year?

Nick Hodge: Listen, some estimates say we could be getting 20 percent of our electricity from solar in the next 10 to 20 years. That’s a significant portion and since we only get less than one percent now, that’s also a 2,000 percent growth scenario.

Right now the market’s worth about 15 to 20 billion depending on who you ask. By 2016, we’re looking at a $60 billion to $70 billion market. So there are the numbers there.  We can see how much this thing is going to grow.

****View the video here…Krista Das on TFN Market Insights

Krista Das: Now commodity prices continue to rise and solar technology is dependent on silicon. Is this a good area to invest?

Nick Hodge: The solar industry is still very much in the midst of a silicon shortage so the prices are still very high. Companies to invest in that sector are probably going to do good until the first quarter of ’09 when the silicon shortage begins to wane.

We’re looking at companies here like MEC Electronic Materials, REC out of Norway, and of course Hoku Scientific if they could ever get this Idaho plant online. Beyond that I’d also be looking at solar producers that are using less silicon and so they’re hedging their volatility for those high silicon prices.

Also vertically integrated solar companies that are doing things from silicon production all the way to finished module production and that way you have everything under one roof.

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Krista Das: We’ve heard of the successes of solar stocks in the past, such as First Solar and Sun Power and I’m sure there’s still some value in those stocks, but where would you recommend turning for the most growth potential in solar stocks today?

Nick Hodge: Listen, right now solar installers are making the highest margins because they don’t have to deal with the silicon costs. They’ve also been battered recently because Congress has failed to extend the investment tax credit, which gives a 30 percent rebate to those people who are installing solar on their homes.

That is expected to be extended by the end of the year and once that happens these solar installers that have been battered over the past six months while this lull was in limbo basically, they’re going to rise astronomically.

So I think solar installers and as I said previously, vertically integrated solar companies that are doing start to finish production.

Krista Das: And if we want to actually invest in particular solar stocks where should we turn?

Juan Munoz: You can turn to my service, Alternative Energy Speculator where we give you step-by-step instructions on alternative energy stocks from solar to geothermal to wind. We’ll tell you the winners and we’ll tell you when to buy and sell.

Krista Das: Nick thanks for talking solar today. Great information.

If you want to find solid stock picks in solar technology, be sure to check out Green Chip Stocks by clicking on the screen or go to Today’s Financial News.com.

That’s all for this week. Until next time here’s to great profits from smart investing.

 

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