Solar Energy - Green Chip Review

The U.S. Army's New Solar Power Plant

It's the same U.S. military that guards Persian Gulf oil routes.

And it's now becoming a force in renewable energy's worldwide expansion.

Far from the wars in Afghanistan and Iraq, the Department of Defense is setting its own target list to achieve energy independence for the Army's biggest bases.

First, California's Fort Irwin has just begun a multi-year march toward 1,000 MW in solar energy capacity and self-sufficiency from the desert sun.

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Fort Irwin Goes Solar

No one would think you were crazy if you thought Fort Irwin — the Army's biggest training camp — was a Middle Eastern outpost. As a matter of fact, the Mojave Desert complex plays host to a sort of mini-Iraq, where hundreds of Iraqi actors are employed by DoD to accurately play out urban fighting scenarios soldiers may encounter during deployment.

Its 1000+ square miles of barren landscape also make Fort Irwin an ideal place to test aircraft, artillery, tanks. . . and even solar power.

In this map from the National Renewable Energy Lab (NREL), you can see that Fort Irwin's location smack-dab between Las Vegas and Los Angeles also puts it right in the middle of the country's highest average daily solar radiation: over 7,500 Watt-hours per square inch.

Those conditions mean you've got to drink a lot of water during training exercises, and you can bet air conditioners are whirring all day long nearly year-round. . .

So the Army commissioned Irwin Energy Security Partners — comprised of Spanish energy and infrastructure company Acciona's solar power division and Virginia-based Clark Energy Group — to reduce the drain Fort Irwin exerts on local generators like Hoover Dam, and to bring a massive power supply improvement inside the base boundaries.

The Army's International "Green Coalition"

You may not expect to see Madrid-traded Acciona (MAD: ANA) on a roster of the U.S. ground force's top energy developers. But Acciona's North American operations, which include water desalination and wind power, give the Spanish company a firm domestic base that the Pentagon sees as favorable to its own efforts. Acciona North America has its headquarters in Henderson, Nevada, just outside Las Vegas.

For the Fort Irwin solar power project, Acciona has teamed up with Clark Energy Group, an energy services company based in Arlington, Virginia, just outside D.C.

Clark is able to navigate the bureaucracy and get Acciona's concentrating solar power (CSP) technology into the military power mix.

A combination of solar thermal power and photovoltaic (PV) technology will contribute 500 MW of capacity by 2022, at a cost of about $2 billion. That should make Fort Irwin energy-independent as far as electricity is concerned.

The Wall Street Journal is reporting that Army officials have hinted at selling some of that output to area grids — especially if the solar plant is expanded to a full gigawatt under the Army's Enhanced Use Leasing (EUL) program. The EUL is the military equivalent to Public-Private Partnership (PPP) arrangements that many emerging countries and cash-strapped cities have used to launch infrastructure improvements.

Under the EUL, which is administered in Baltimore, Irwin Energy Security Partners will lease Army land to install and operate the solar power plant. The consortium will cohabitate with the military with the goal of landing more contracts as the Pentagon shifts to sustainable energy on its bases.

Out in the brightest, driest reaches of the United States, more international clean energy companies with American HQs may find themselves involved in the Defense Department's "Green Coalition."

Israel's Ormat Technologies has its main North American offices in Reno, Nevada, just north of Fort Irwin. Ormat (NYSE: ORA) is already drawing steam from the ground to drive geothermal electricity generation throughout the West, and inclusion in Army energy plans could give another shot in the arm to Ormat shares, which are now holding just above support levels at $36.

Be it Acciona, Ormat, or another company that gains the most from the American military's forays into security through clean power, one thing is certain: the U.S. is now building an international coalition on renewable energy like none we've seen before.

We'll keep you up to date on which international green companies are set to benefit.

Regards,

Sam Hopkins

International Editor

P.S. Nick Hodge and I just issued another successful recommendation to Green Chip International subscribers. That's become the norm for GCI, as our current open positions now average a 45.9% gain. As for the ones we've closed out. . . they did even better — with a 58% payday. And we're working on more winners for you as we speak. Just take a look at this GCI special report today so you don't miss the next one: Profiting from International Clean Energy Expansion.

Solar Energy Stocks

For some, investing in solar stocks over the past six months has delivered once-in-a-life-time results:

Here's What Every Wealthy Energy Investor Already Knows...

The U.S. Department of Energy has indicated that enough electric power for the entire country can be generated by covering about 9% of Nevada with solar power systems. This is a plot of land roughly 92 miles by 92 miles.
According to M.I.T., there are over 100 million quads of accessible geothermal energy worldwide. The world only consumes about 400 quads.
The Institute for the Analysis of Global Security has stated that if all cars on the road were hybrids, and half were Plug-In Hybrids by 2025 -- U.S. imports would be reduced by 8 million barrels per day. That's about 80% of our daily consumption!

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Others haven't had it so good:

Indeed, playing cleantech's franchise player has proven to be a tough gig.

On one hand, you have a small group of Chinese companies on the brink of doubling or tripling in just two quarters.

On the other. . . a wild roller-coaster ride has ended as it usually does, back at the starting gate.

But what's stoking such discrepancies in a group of stocks that are so closely related?

A Lack of Solar Education

I'm convinced the reason for such volatility and variance is a lack of solar understanding and education that is worsened by constant misinformation from the media.

For the second group of solar stocks above, a downtrend since June doesn't make much sense at all. Granted, the summer months were sluggish. . . but there was a significant uptick in sales during August and September, with demand exceeding supply for several major producers.

That increase in demand should have acted as a bullish signal for major module producers and cell manufacturers.

Instead, it was the so-called second tier suppliers, like Trina Solar (NYSE: TSL), that saw a major jump.

That surge in demand should continue, buoyed by an already-passed 1 GW Chinese solar subsidy and new tax advantages included in the U.S. stimulus. An additional 1 GW subsidy could be passed by the central Chinese government in coming months.

What's more, that same increase in demand is allowing installers and distributors to mark up prices for panels, which could lead to higher average selling prices (ASPs) for suppliers down the road.

And finally, this increase in demand should bump up fourth quarter shipments just enough to beat expectations, which always leads to higher valuations.

This is probably all new information to you. And that's part of the problem. . .

Because you don't always get the full story by reading mainstream news and press releases. Consider these recent headlines from Wall Street Journal, Bloomberg, and the like:

"Glut Feeling: Solar Power's Got Too Much of a Good Thing"
"Solar Panel Glut Will Scorch Small Players"
"Watch Out: Solar Stocks Might Sink"
"Supply Glut Will Put the Heat on Solar Stocks"

With stories like these being pushed by stalwart financial news agencies in the face of contrary data. . . is it any wonder that investing in solar stocks has been a crapshoot?

Finding the Solar Truth

Perhaps the most revealing example is this gem of headline, run in some form by Bloomberg and many others: "German Solar Subsidies Face 'Enormous' Cut."

An 'enormous' subsidy cut in the world's largest solar market would be enough to make any investor shy away from the sector. . .

But it wasn't true.

After the story had been picked up by countless news agencies — even the AP ran it — and spooked countless investors. . . Reuters ran a piece entitled, "New German Government Won't Slash Solar Power Rates: Source." And, as they often do with controversial or misreported topics, they ran a factbox to clear everything up.

Now, if you were getting your solar information from me. . .

I would've told you from the beginning that the German solar subsidy would not be cut this year or next. And, even if it is cut in 2011, that would only lead to increased sales in 2009 and 2011 — ahead of any subsidy changes.

With respect to a solar glut. . . I've been saying that it's a possibility, but that any oversupply could be absorbed by global stimulus-funded projects. Increasing volume, even slightly, can be enough to maintain profitable margins.

A recent joint announcement by First Solar (NASDAQ: FSLR) and the Chinese government that they're building a 2 GW solar power plant is clear proof of that.

This is the problem with most financial news: There's no nuance. It's either black or white — bull or bear.

Hell might freeze over if they were bullish with caution or bearish with a silver lining.

Here at Green Chip, we take a different angle. We want to make money as much as you do. And only telling one side of the story doesn't contribute to that end.

Instead of telling you a "Supply Glut Will Put the Heat on Solar Stocks," I've been warning against a potential oversupply, while still highlighting the best investment opportunities and maintaining a bullish outlook.

I'm not saying to dismiss other news agencies and websites. I'm simply suggesting you make sure to get the entire story — every time.

Not doing so could mean missing a great investment opportunity. . . such as the six-month ~200% runs by Canadian Solar and Trina Solar.

But you wouldn't have wanted to invest in them. . . there was a massive solar glut at the time, right?

Call it like you see it,

Nick

P.S. After writing this article, I came across a new article on Barron's about the German solar subsidies. Direct quote: "The agreement does not call for immediate cuts in the so-called feed-in tariff for solar projects." Maybe they're learning.

P.P.S. I've been using this straightforward approach to lead investors to cleantech profits time and time again. . . no matter what the other outlets are claiming. I've closed 45 winners this year, including several solar stocks at a time when there was supposedly a "glut." If you're tired of the spin, and just want profitable investment information, this approach is definitely for you.

Solar Thermal Energy Companies

Siemens (NYSE: SI) is moving from country to country and from strength to strength in the renewables sector.

This month, the German engineering giant added Israeli solar-thermal company Solel Solar Systems to its Environmental Portfolio. Here, we'll see that Solel's recent progress and Siemens' green growth goals make this is a well-timed acquisition that points to further opportunities for large-cap clean energy investments.

Siemens shelled out nearly half a billion bucks ($418 million) for Solel, which has already established itself as a player in key clean energy markets.

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Solel currently operates 750 MW worth of installed capacity at 15 solar-thermal plants around Spain. The company got a $2.6 million grant from the Spanish government in September, meant to help the company finance Spain's first solar field component plant south of Madrid. There, Solel engineers will produce solar receivers that focus the energy generated at parabolic trough power plants.

Siemens will take on that project now, gaining a leg up in the country Ernst & Young ranks in the top 5 most attractive renewable energy markets in the world.

In Spain and elsewhere, Siemens will couple Solel's high-efficiency receiver production with its own market-leading steam turbine division.

Every bit of synergy helps Siemens push beyond its own advantageous German base — Germany is the #2 overall clean energy market in the world, according to E&Y's Q4 2008 All Renewables Index.

Globally, Siemens expects to take a big bite of the rapidly growing solar-thermal market, which it says will be worth 20 billion euros by 2020.

That's a figure that big companies can't say no to.

And the greening of Siemens, GE (NYSE:GE) and other industrial giants presents us with a new category of global mega-cap shares that are gradually becoming, well, Green Chip Stocks.

When Blue Chip Stocks Go Green

Now, being an industrial behemoth with a U.S. market cap of over $87 billion, Siemens dwarfs most pure plays on renewable energy. Some investors may like the underdog feel of clean energy stocks — after all, until the past few years, the mainstream media paid little attention to anything green. . . and oil prices didn't seem to justify high-dollar acquisition strategies like the one Siemens is currently pursuing.

Siemens isn't shelling out hundreds of millions for Solel on a whim. In fact, solar isn't even the primary motivation for this green grab, if you listen to Siemens CEO Peter Loscher. When the Solel deal was announced, Loscher said, "After the rapid and highly successful expansion of our wind power business, we now want to continue this success story in the solar sector."

Indeed, Siemens is bringing in wind turbine orders at an incredible clip for a recent market entrant. . .

On October 13, Siemens announced six new wind turbine orders in North America, worth over $900 million. A quarter of the 565 MW in turbines Siemens ships will head to Ontario, which has become the hub of Canadian wind energy market momentum. Wind-blown states like Wyoming, Oklahoma, and California (the nation's top renewable energy market), will get the rest.

This is big, and this is real. We've heard fair criticism of multinational firms that engage in "greenwashing," which means they put a ton of public relations money into magnifying relatively small moves towards sustainability. With emissions reductions mandates now being developed in national capitals ahead of the Copenhagen Climate Conference (COP-15) in December, even those baby steps by blue chips will evolve into long strides. So on one hand, Coca-Cola won't necessarily become a "green" company, but Atlanta executives will have to reevaluate their industrial logic like never before.

Siemens, on the other hand, is fusing its own in-house research and resources with valuable startups like Solel. Solar-thermal plant designers will now be able to source steam turbines and receivers from one company, which is huge. Easier procurement means economies of scale are achieved more quickly, costs come down, and more drawing-board plans move into the range of reality.

We've been keeping you up to date on the state of renewable energy finance throughout the credit crisis, and M&A is a major piece of the puzzle for keeping clean energy on track to provide more capacity and enable investors to profit (Wall Street-traded Siemens shares are up 67% in the past six months).

Rest assured, there's plenty more on the way when it comes to top-down industrial stimulus for clean energy stocks.

Regards,

Sam Hopkins

P.S. You've read about the evolution of clean energy and sustainability in Green Chip Stocks for years now. But there's another way to tell the story, and a new film highlights another area where the green shift is taking place. You can watch the whole video, Scraphouse, online right here.

Solar Industry Tariff

Last Wednesday, the New York Times reported that companies importing solar panels to the U.S. are facing up to $70 million in unexpected tariffs.

Because solar panels have become too sophisticated to qualify for duty-free status, the U.S. Customs Agency has stated that they will be treated as electric generators - which are subject to a 2.5% duty.

Now word is, hardly anyone in the industry was even aware of the tariff until last week. I do find this hard to believe. And if they weren't aware of it, they should've been. Such an oversight seems a bit questionable to me.

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Nonetheless, unpaid duties and penalties have been piling up. But it's not just foreign solar manufacturers that are unhappy with the tariff.

The fact is, as a result of an enforced tariff, other countries could impose their own tariffs on U.S. exports. This has caused concern for some domestic manufacturers, as the U.S. has already exported more than a half billion dollars in solar panel equipment this year.

Still, imports do account for nearly half of the solar panels sold in the U.S. So it is likely that we will see foreign and domestic suppliers working together in an effort to negotiate a deal with Customs.

In the meantime, it should be noted that some foreign solar manufacturers are now moving some of their operations to the U.S. Certainly this would allow them to avoid the duty, while also enabling domestic job creation. Cutting out the heavy distribution costs (both environmental and economic) also serves as a bonus.

Moving In

Back in October, 2008, German manufacturer SolarWorld AG (ETR:SWV) opened a solar cell manufacturing plant in Hillsboro, OR. That facility is expected to reach a 500 megawatt capacity by 2011.

And just this past May, Chinese manufacturer Suntech Power (NYSE:STP) announced its plans to establish manufacturing in the U.S.

CEO, Dr. Zhengrong Shi said. . .

"We believe in the outstanding long-term prospects of the solar energy market in the United States, and we will continue to invest in our ability to meet a substantial portion of that potential growth through in-market manufacturing. A number of favorable developments have led us to this decision, including the dramatic growth in utility demand for large-scale wholesale solar projects, the increasing number of states with incentive programs for customer-owned systems and the federal government's recent stimulus package, all of which will drive steady, long-term growth in demand."

According to Reuters, it looks like Suntech will set up shop in either Arizona or Texas.

Still, even with domestic manufacturing credits and the call for more domestic job creation, there's no disputing the fact that China's own tax breaks and labor costs have enabled Chinese manufacturers to cut prices nearly in half.

And while Suntech is building manufacturing in the United States, Dr. Zhengrong said in an interview that in an effort to build market share, his company is actually selling panels on the U.S. market for less than the cost of materials, assembly and shipping.

It's hard to believe that less than a decade ago, solar was cast aside as nothing more than a pipe dream or toy for the wealthy and eccentric.

Yet here we are today, dealing with an industry that's now so lucrative and growing so fast, our heads are spinning with costly tariffs and cut-throat competition.

How times have changed!

So what are your thoughts on all of this?

Should a tariff be enforced?

Can the U.S. effectively compete and create jobs?

I certainly don't have the answers to these questions. But I look forward to reading your responses.

To a new way of life, my friends. . .and a new generation of wealth

Jeff

Buy, Sell, or Hold: First Solar and the Power Revolution

Welcome to the Green Chip Review Weekend Edition — our insights from the week in everything renewable energy and cleantech, as well as links to our most-read Green Chip Review and sister publication articles.

Dear Reader,

If you haven't had a chance to read any of Steve Christ's stuff. . . you're missing out. He's the managing editor of our sister site, Wealth Daily, offering his expertise on real estate and biotech markets. But this week, he has his sights on First Solar, so I thought I'd pass it along.

Good Investing,

—Nick

Buy, Sell, or Hold: First Solar and the Power Revolution

Given the recent decline in shares of solar power stocks, the solar doom and gloomers just can't help themselves these days.

They've come out of the woodwork with their scary tales of impending woe.

In fact, the chorus from these folks turned downright cloudy in August after analysts from Jeffries & Co. downgraded the entire solar sector amid new pricing fears.

"We expect rapid growth in solar volumes," Jeffries said in a note on August 21, "but a downward pricing spiral and lack of discipline around capital deployment leave us cautious on cell and module manufacturers."

Those dark warnings sent shares of nearly every company in the sector into an immediate tailspin, including shares of First Solar stock, which Jefferies cut to from a hold from a buy.

However, as my old pal Nick Hodge said to me on the morning of the news, the Jefferies call was a bit over the top. "It was," the green guru said, "completely unwarranted."

That has given investors with a time frame longer than it takes to eat a sandwich yet another opportunity to invest in one of the few true growth sectors, including in well-run U.S. companies like First Solar Inc.

As for the industry itself, it appears the anti-solar crowd's fears aren't warranted either.

In that regard, consider the following recent developments within the industry that will undoubtedly help to boost future sales:

On August 13,the U.S. government announced a program to award $2.3 billion in tax credits to manufacturers of advanced energy equipment. Authorized by the February stimulus bill, this new provides tax credits to manufacturers who produce clean energy equipment.

On July 30, the Energy Department announced it is making up to $30 billion in loan guarantees available for renewable energy and electric grid modernization projects. The government-backed authority should help boost lending capital for renewable and other clean-energy technology projects, which has dried up with the financial recession.

On top of that, when it comes to renewable energy, let's just say the industry also has more than a few friends in high places, including Energy Secretary Steven Chu. An actual Nobel Prize-winning scientist, Chu is one of solar power's biggest supporters.

In fact, according to Chu, the administration's new goal is to double renewable electricity generation over the next three years. "To achieve that goal," Chu said, "we need to accelerate renewable project development by ensuring access to capital for advanced technology projects."

That means the government will be there to help push these new technologies forward - now and in the future - by whatever means necessary.

Of course, that's not to say that the solar power industry hasn't had its share of problems lately. It has. The industry has definitely been hurt by excess capacity, tight credit, and a bloated inventory of panels that iSuppli predicts will not end until 2012.

On top of that, there is a supply glut of polysilicon that has hurt the industry's earnings and margins this year.

Even still, given the combination of eventual improvements in the technology and favorable government policies both here and abroad, solar power as a long-term investment is one whose time has definitely arrived. . . all doom and gloom aside.

And in this free six-page report, The Wealth Advisory Research Team has broken down the one of the most promising solar power giants, answering the question on every investor's mind these days. . .

Is First Solar Stock (NASDAQ: FSLR) a Buy, Sell or Hold?

In this free report, Wealth Daily subscribers will receive:

The results from The Wealth Advisory's proprietary scoring model
A buy, sell, or hold recommendation
A 12-month Price Target, along with a current Stop/Loss
A technical and fundamental analysis of the company's share price
And much more. . .

To receive a free download of this report and our Buy, Sell or Hold recommendation for First Solar Inc. (NASDAQ: FSLR), click here.

I hope you enjoy your free First Solar report. I'll be publishing many more of these in the weeks to come. . .

Your bargain-hunting analyst,

Steve Christ, Investment Director

The Wealth Advisory

P.S. In case you missed any of the recent top stories from Green Chip Review and our sister publications, we've included them here:

Water Infrastructure Stocks: Flows of Profits Under Your Nose
Energy & Capital Editor Nick Hodge digs through the archives to prove why investing in water infrastructure stocks is always a good idea.

The Tipping Point is Now: How You Can Take Advantage of the Cleantech Revolution
Over $200 billion worth of "stimulus money" has already been allocated to this industry. . . five times bigger than the tech explosion of the '90s, we'll tell you about the cleantech boom on the horizon — and how you can still make lots of money.

Solar Stocks 2010: "The Worst is Already Over" for Top Solar PV Stocks
Editor Sam Hopkins points out why it's a danger for your portfolio to only keep a short-sighted view of solar power stocks. . .

A Meeting of the Bigwigs: What You Need to Know about the Upcoming COP-15 Summit
Some of the world's most formidable leaders are attending a meeting in Denmark this December, including the very same Silicon Valley investment firms that brought you Google, Cisco, and Amazon. . . and we reveal how you can get in on what the insiders will discuss at this historic meeting.

Romania Wind Energy: A New 600 MW Wind Farm In Romania
With about half of the wind farm expected to come online in 2010, Editor Jeff Siegel talks about how this particular wind farm is likely to be the largest onshore wind project in Europe.

Nanosolar's New Solar Technology: New Modules Could Be the Cheapest in the World
Green Chip Review Editor Chris Nelder reviews the latest announcements from thin-film solar manufacturer Nanosolar on their groundbreaking technology and its potential to print the cheapest solar cells in the world.

Green Stocks: Taiwan's UMC on Dow Jones Sustainability Index
Green Chip Editor Sam Hopkins tells readers about Taiwan's United Microelectronics. . . it's not a clean energy company, but it is a top-tier sustainable public company.

Nanosolar's New Solar Technology

There was a very exciting announcement in the world of energy this week, and I've been taking a hard look at it.

No, it wasn't the Tiber field find by BP. Although peak oil deniers seized on the discovery as validation of their argument that technology will continue to make vast new reserves of oil accessible and solve the peak oil problem, the hype was typically overblown. It reminded me of the initial excitement over the Jack field in 2006, which is east of the Tiber field and part of the same Lower Tertiary trend in deepwater Gulf of Mexico.

Perhaps I'll write on Tiber when there is more hard information about it, but on the basis of the very scant data currently available, I would speculate that first oil from it might be produced in 10 years, at a cost in the low billions of dollars, and that it might achieve a maximum flow rate of 200,000 - 300,000 barrels per day (bpd) some years later.

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In other words, in the context of the peak oil problem, where we're worried losing 4 mbpd of oil production capacity each year starting somewhere around 2012, a discovery like Tiber is a good thing. . . but it's hardly a solution. We'd need to continually make similar discoveries roughly once a month in order to significantly change the global supply curve, and that simply isn't happening.

Rather, what had me excited was an announcement from Nanosolar that it was finally ending its "quiet period" after seven years of development, and had completed a new solar panel assembly plant near Berlin. The plant is fully automated using state-of-the-art equipment, and can reportedly sustain a production rate of one panel every 10 seconds, or 640 MW (megawatts) a year if operated 24/7.

The company claims to be churning out 1 million solar cells (about 1 MW) per month now, including production from its San Jose, California, plant which opened earlier this year and is expected to eventually reach 430-MW capacity. When both plants are operating at capacity, Nanosolar would be getting close to thin-film king First Solar's (NASDAQ: FSLR) manufacturing capacity, which is expected to reach 1,189 MW by the end of the year.

Nanosolar has taken a few hits in the press for keeping the wraps on its technology for so long. Founded in 2002, it gained early notoriety for raising a $150 million startup war chest — which rose to $500 million last year — before publicly divulging any real details about its technology, its strategy, or its anticipated production capability. The company is still privately held (much to the dismay of your editors here at Green Chip Stocks!).

Now we have an idea why the company was so careful to play close to the chest. . . and why their unveiling is truly a big deal.

Groundbreaking Technology

I first became aware of Nanosolar in late 2005, when a couple of their engineers gave a dog-and-pony show of their technology to the solar company where I was working at the time. I was immediately impressed by their visionary approach of "printing" solar material using a printing-press technology, which had the potential to achieve enormous savings in manufacturing cost.

But there were some problems to be solved first, like how to deposit a nice even coat only one-micron thick of their CIGS (Copper-Indium-Gallium-Selenium) "solar ink" on the substrate, and to do so at high speed, while still producing cells that were electrically matched so they could be wired together into high-efficiency panels.

There were also uncertainties about whether they should try to produce something revolutionary — like giant solar wrappers that could cover a bus or a building — or more evolutionary, like traditional rectangular modules that could be mounted using the same hardware as standard silicon modules.

Now, it appears they have solved those problems, tested their modules thoroughly, and gotten everything approved by UL, the International Electrotechnical Commission, and other regulatory agencies.

Here are a few of the advantages that Nanosolar's technology has over other types of photovoltaics.

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Instead of using glass as a substrate, like First Solar and other thin film manufacturers do, Nanosolar uses aluminum foil. This has three advantages: One, foil is much cheaper (one or two cents per square foot and mil thickness). Two, it enables them to make the cells in a "roll-to-roll" process, turning a roll of foil into a roll of 50,000 cells in one continuous loop. (Check out their video to see their process in action.) Three, the end result is very lightweight and adaptable to many applications.
Nanosolar may be able to produce its modules more cheaply than any other manufacturer.

Until now, First Solar's module manufacturing cost has been the lowest in the industry, at about 87 cents per watt. Nanosolar has not yet announced its manufacturing cost or module pricing because it is only targeting utility-scale projects where the price is customarily undisclosed. (At this time, the company does not have a product for the retail market, but reports that one is in development.) But in an e-mail response to my inquiry, Nanosolar CEO Martin Roscheisen stated that his company is "planning to demonstrate that our capital efficiency is three times as good as First Solar's."

"Capital efficiency" is a broader metric than cost per watt, including the cost of building a fabrication plant and other costs. As recently as last year, Nanosolar believed it could potentially deliver product to the market at 1/10th the cost of traditional silicon, and build physical plants with roughly 1/10th the capital. I did not receive a direct answer on whether this is still their claimed. But it does seem plausible that Nanosolar will be the cheapest manufacturer in the industry.

The efficiency of Nanosolar's cells is now the highest in the thin-film industry. The National Renewable Energy Laboratory has independently verified that Nanosolar's cells can convert a maximum of 16.4% of the solar energy hitting them into electricity. When the cells are sorted and matched and turned into modules, Nanosolar's median efficiency is higher than 11%, just edging out First Solar's average efficiency of 10.9%. By comparison, traditional silicon modules are about 16% efficient, and hybrid modules like those from SunPower (NASDAQ: SPWRA), are 19.3% efficient — but both types cost more than twice as much as thin-film modules.
Nanosolar has incorporated several important innovations in the design of their Nanosolar Utility Panel^TM modules.

With their solar foil hermetically sealed between two sheets of tempered glass, their modules are mechanically stronger, more durable, and more lightweight than other thin-film modules, so they can be made in larger sizes and eliminate the need for bulky aluminum frames. They claim their modules are able to span 1.7 times the distance between rails that First Solar's modules can, reducing the need for mounting rails by 41% and significantly reducing the installation labor. Their thin profile also allows the company to ship more than three times as many kilowatts-worth in a shipping container as First Solar can, reducing shipping costs.

Nanosolar's panels can carry six to seven Amps of current, compared with one Amp for First Solar's panels, which minimizes resistive losses and puts them on par with silicon modules. Consequently, the panels can be strung together in much longer strings before hitting the inverter's voltage input limit. This can reduce the need for cables running back to the inverter — a significant part of the balance-of-system costs — by as much as 73%, and allows arrays as long as 64 meters (versus a 12-meter maximum for First Solar), further reducing installation and cabling costs. The panels are also designed and certified to handle a system voltage of 1500V — 50% higher than the industry standard.

Finally, the modules have an electrical connector on the edge of the module, rather than inside the back of the module, so only a short cable between modules is needed to make the electrical strings. This reduces the labor cost of interconnection by 85%, according to independent third-party testing. Having personally spent many an hour crawling around under arrays fiddling with the wires (and occasionally making costly mistakes in the process), I can tell you this is a terrific innovation.

In total, Nansolar believes the advantages of its module design will bring the balance-of-system costs for their installations in line with that of traditional high-efficiency silicon modules.

A Very Promising Future

Now, you might be wondering why I'd spend this week's column talking about a company that isn't publicly traded. The answer is simple: Nanosolar's technology could be a game-changer for solar PV, pushing the industry ever closer to the point where watt-hours generated from solar are as cheap — or cheaper — than those from coal. Its production process also offers the tantalizing possibility of churning out solar cells almost as easily as we print newspapers.

As the company matures and increases the consistency and rate of its output, and its product cost becomes more fully-known, the rest of the world will get a glimpse of just how effective solar power can be in addressing our energy challenge. With a reported $4.1 billion backlog of orders to fulfill (outside the U.S.), a strong balance sheet, and a bright future ahead, Nanosolar is emerging as a serious player. . . and they haven't even started on the retail market, let alone groundbreaking applications beyond rectangular rail-mounted modules.

In time, maybe we'll even get a chance to jump in on an IPO, and ride the next big wave of technological evolution in solar.

Until next time,

Chris

P.S. While you can't invest in Nanosolar just yet, there are plenty of available solar plays turning profits for investors. In fact, Nick's readers at the Alternative Energy Speculator are finding ample opportunity for profit. Of the nearly 40 winners they've closed so far this year, 17 of them have been from solar companies. And that doesn't include the open winners in his portfolio! Click here to see how Nick is closing more than a winner per week and what his next move will be.

Solar Stocks 2010

I don't consider myself a big Billy Joel fan, but I've had some classic lyrics stuck in my head at the office lately. . .

You may be right.

I may be crazy.

That's what I wanted to say to solar power market analysts at investment bank Jefferies & Company, who took a machete to their estimates in the same clean energy sector on August 21.

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As a listed firm, Jefferies Group (NYSE:JEF) has enjoyed an impressive share-price appreciation of 184% in the six months from March to September. I won't doubt that investors assigned that premium for a reason.

Yet, the logic behind their downgrades of no fewer than eight solar power stocks seemed rash.

PV sector observers at Jefferies cited a downward pricing spiral and overproduction in China as reason enough for pessimism across the board. They said they even factored in lower production costs at solar module manufacturers around the world that could pad margins, and that the forecast looked bleak. That mass downgrade spooked investors, and many fled their positions.

My colleagues and I here at GCR thought the hatchet approach to solar power stocks that Jefferies took was short-sighted.

"They may be right. . . for now," we said. "But what about in 2010?"

It's true that solar panel prices have dropped by 50% this year, as economies around the world wobbled. And capacity utilization has been estimated at as low as 25%, with manufacturers holding over 100 days' worth of inventory they would rather move from shelves to rooftops.

Still, billions of stimulus dollars are ready to be doled out well into 2010 in Germany, China, the United States, and other countries among the world's top current and developing solar markets.

Nevertheless, to paraphrase the piano man, Jefferies & Co. may have been right — and solar bulls may all have been crazy.

On Tuesday, September 8, we saw who had all their marbles when Arizona's First Solar (NASDAQ:FSLR) announced a deal with the Chinese government to build a 2,000 MW solar power plant in Inner Mongolia. Jefferies & Co.'s oversupply scenario now looks more like an overreaction.

First Solar Proves Big Project Power

I've seen Inner Mongolia for myself. The capital city of Hohhot is made up of rows of huge identical housing blocks, stretching across the barren landscape like a Las Vegas made of Legos.

Its remoteness isn't an issue as far as the Chinese government is concerned: for decades, they've been moving people from the crowded east to the area where First Solar will operate a 2 GW operation.

And just as migration is a process, First Solar's plan to provide power to some three million homes in the autonomous region of Inner Mongolia won't play out right away. . . but instead over the ten years leading up to 2019.

You might see that as painfully slow. . . or as sustained business that will keep revenue flowing. First Solar will provide thin-film PV products and also kick-start local production to give the American company a low-cost manufacturing base for Asian endeavors.

At least in the case of First Solar, Jefferies only dropped it to a "hold." So if you stayed put, you didn't miss the nearly 16% upside FSLR has delivered in just the first two trading days of this week.

What about Trina Solar (NYSE:TSL), a Chinese solar ADR that Jefferies didn't touch? They didn't get the 2 GW go-ahead in their own backyard, so do they see clouds covering their profit prospects a year from now?

Trina CFO Terry Wang says no.

"The Worst is Already Over"

"The worst is already over," Wang said this week in Beijing, referring to the PV market. He even gave a tempered time frame to allow for inventories to dust off the cobwebs for more big deals to come through. The U.S. and Chinese solar power sectors "can wake up in the fourth quarter" of this year, "but a full recovery is likely to have to wait until the second quarter of next year."

That's just around the corner, and any investor's periscope should be peering into Q2 2010 right now.

Suntech Power (NYSE:STP), another China-based solar player, isn't even waiting that long. STP has restored its 2009 shipment goal after lowering it not long ago. "Maybe about a month ago the markets were still slower than we would have liked, but as of the past month — and this has been led principally by Germany — we have seen the market pick up," Chief Strategy Officer Steven Chan said in early September.

Germany is a key market where Jefferies pointed to uncertainty in government incentive packages as a potential major drag on global PV company profits.

Suntech's Chan echoes Piper Jaffray's PV sector analysis. Jaffray, unlike Jefferies, is saying fears about Germany's feed-in tariff are overblown. Household installations are now cheaper than ever — meaning more business will come with recovery — and India's 20- GW solar power goal brings another major developing market in with China as a driver of PV market growth.

Again, I may be a card short of a full deck, but I'm not going around spooking investors out of winning positions just because the current numbers look sour. Analysts ignore the power of stimulus-fed megadeals at your risk, not just their own.

We will continue to do our best to give you the long view of what you can expect and where you should invest.

Regards,

Sam Hopkins

Editor's Note: It's not winter yet, but ministries of finance, environment, and energy from around the world are already preparing for December's COP-15 talks in Copenhagen. It's being called "a deal on the economic structure of the planet." Click here to learn more about how to stake your claim.

Solar Power Stocks

This past Friday, while the market was barreling north, thanks to the obligatory positive remarks made by Ben Bernanke (who didn't see that one coming?), an analyst from Jefferies & Co. issued downgrades on a number of solar stocks.

Needless to say, the sheep followed, and most solar stocks ended the day in the red.

While there are certainly issues still plaguing the solar market, one reason given for these downgrades is a bit questionable. That reason being, "end markets are not ready to support the levels of volume production being planned for 2010."

Essentially, in an effort to counter lower average selling prices, many solar companies are dependent upon heavy volume. But to assume that end markets are not ready to support levels of future volume production is not a safe assumption to make. At least not with so much stimulus money and muscle backing increased solar integration in both China and the United States.

Granted, since much of this solar support has either just started or is set to start shortly, it's difficult to quantify. The fact is technically, the effect of this government support is still an "unknown."

Sure, we can predict how it'll affect the market. . . But when you make a prediction, isn't that really like making a guess? And when it comes to making investment decisions, who wants to just guess when you have current, objective data right in front of your face?

Yes, $117 million of the stimulus has been set aside for solar. But most of that money hasn't even started to funnel through the system yet. So, do we disregard that funding, although we know it's a lock — but just hasn't traveled from point A to point B yet?

Or do we figure into the equation the result of this funding, before it actually gets to where it needs to go? Moreover, do we figure into the equation the tax credit extensions that take us through 2016, or an increased demand coming as a result of lower pricing?

Based on how this market has unfolded over the past five years, this can actually be a tough call to make.

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What If?

We've never been comfortable with completely disregarding the "what ifs." After all, the "what ifs" are what made most Green Chip investors get into the renewable energy market to begin with.

What if oil prices climb above $60 a barrel?

Done!

What if climate change becomes a launching pad for the integration of renewable energy?

Done!

What if we deplete all of our fossil fuel resources?

Between now and 2025, it is likely we will see the peak of every single one of our finite fuel resources.

You can read more about that here.

The point is, when it comes to renewable energy, you can't always disregard those "what ifs" and expect to make any money.

Especially when you throw China's energy mess into the mix.

What if China. . .

Let's look at the numbers.

According to the State Grid Corp. of China (the largest electric power transmission and distribution company in the world):

China's power demand is expected to more than double from 3.4 trillion kilowatt-hours in 2008 to approximately 7.7 trillion kilowatt-hours in 2020.
Installed power generating capacity is expected to increase from 793 gigawatts in 2008 to 1,600 gigawatts in 2020.
Installed capacity of clean energy will account for about 35% of the total installed capacity in 2020. Today, it represents about 10 percent if you include nuclear, about 8 percent if you exclude nuclear.

So how is China going to facilitate a 25% growth in clean energy capacity?

Well, some of this will come from China's new solar initiatives. These include:

The Ministry of Finance and Ministry of Science and Technology's Golden Sun solar subsidy
National Development and Reform Committee's (NDRC) feed-in tariff
Ministry of Finance and Ministry of Science and Technology's Building Integrated Photovoltaics subsidy

About a month ago, guidance was given on the Golden Sun subsidy. It will be capped at 640 MW, which works out to 20 MW per Chinese province.

Separate from that is the NDRC's feed-in tariff. And while the specifics aren't due out until Q4, it's expected the tariff will cover 1.5 GW of solar installations through 2011.

Then there's the 20RMB-per-watt subsidy for building integrated photovoltaics, which is expected to cover 500 MW through 2011.

In total, these subsidies will cover 2.6 GW of new solar through 2011.

This kind of stuff is not irrelevant, and in our opinion, should not be disregarded when analyzing the ability of end markets to support levels of volume production planned for 2010.

The fact is pricing will continue to fall, production will continue to increase (instigated by government support and continued through increased consumer demand, as a result of decreasing prices), and the long-term sustainability of the solar industry will be validated through technological innovations and the holy grail of grid parity — which many believe is only about six to seven years away.

This is the future, my friends. And those who disregard solar because of random downgrades and herd mentality will miss out on one of the greatest investment opportunities of the 21stcentury.

To a new way of life, and a new generation of wealth. . .

Jeff

Suntech Power Stock

The most impressive solar eclipse in China this week wasn't the one Beijing residents waited so long to see. . .

It was the solar stock market rally, where Chinese shares tripled the Dow's record pace.

Capital city dwellers came out to behold the longest total solar eclipse the Middle Kingdom has seen since 1814. Alas, the sky was too cloudy.

As I and anyone else who's visited Beijing during this time of year can tell you, you don't get a lot of blue-sky days.

But even though the eye could only strain so much through the haze to see the once-in-a-lifetime celestial wonder, a slew of Chinese and international investors got the treat they wanted from the Chinese sun.

And interestingly enough, skywatchers in Shanghai — home of the country's main stock exchange — had a clear view of the natural solar phenomenon.

Chinese Solar Stocks Shine Brighter

Let's take just one mainland Chinese solar stock as an example. Here, we see American Depositary Receipt (ADR) shares of Suntech Power Holdings Co., Ltd. (NYSE:STP) in blue vs. the Dow in red:

After lagging behind the industrial benchmark for months, STP has absolutely crushed the blue chip index recently.

To find out why, let's start with the bigger market picture. The Dow is above 9000 for the first time since January. That's great for bulls, but it doesn't make a lot of sense.

A positive earnings surprise in the midst of a major economic lull is something like the day the school bully stays home sick.

It's a nice break from the normal shakedowns, and your step may lighten, but you know in the back of your mind that you'll have to cough up more lunch money as soon as the bully returns to the playground.

Wall Street estimates have been scraping bottom on firms from the most speculative over-the-counter shares, all the way up to blue chips. So, "better than horrible" earnings were all the market needed to get a rise out of buyers.

Look at the gap up in STP shares on Tuesday! Some other force must have been at work. . .

And indeed it was: The Chinese government announced a plan to chase the darkness away.

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The Golden Sun Project

China unveiled a multi-ministry solar subsidy package on Tuesday that will inject billions into China's solar power industry while pushing towards new national renewable energy targets.

With a three-pronged approach, China's central government will spur the creation of up to 2.6 gigawatts of new solar power capacity through 2011. By that time. . .

The Golden Sun solar subsidy, from the ministries of Finance and Science & Technology, will subsidize 640 MW of solar photovoltaic (PV) installations across the country. . .
The Ministry of Housing and Urban/Rural Construction will administer a 500 MW-subsidy package for BIPV (building-integrated PV). . .
And the National Development and Reform Commission (NDRC) will manage a feed-in tariff to support up to 1.5 GW in new PV installations that will sell energy back to grid utilities.

Local market observers are also expecting a new renewable generation target from the NDRC and National Energy Administration.

The NDRC's Energy Research Institute forecasts an increase in China's 2020 solar capacity goal from 1,800 MW to 10,000 MW, or even more!

State-run newspaper China Daily reports that NDRC officials want to match the European Union and its "20x20" moonshot, by which 20% of electricity capacity will come from renewable resources by 2020.

Right now, China officially has its sights set on 15% by 2020.

"Personally, I think we could reach the target of having renewable sources make up 20 percent of total energy consumption," the NDRC's international ambassador Zhang Xiaoqiang said recently.

And even though China Daily tends to make China look good, this new optimism is far from fluff.

Next to the premium that investors are delivering to stocks like Suntech, perhaps the biggest bet on China's solar power progress is coming from Washington.

U.S. Cleantech Moves Closer to China

On July 15, the U.S. and China told the world about new plans to create a high-tech energy research center that would incubate jointly developed technology while lowering trade barriers.

The first estimate of how much it will take to establish a top-notch lab complex with dual headquarters in both countries is $15 million.

But that's chump change compared to the billions it will take to establish grid-connected solar power in China and expand additional off-grid generation into the hinterlands.

Beijing will subsidize up to 70% of independent solar power projects in unconnected remote areas, official CCTV reports.

Leapfrogging thermal (coal-fired) energy in undeveloped regions will help ensure that more of China's skies stay blue and, more importantly for investors, that new solar customers will chip away at China's excess domestic capacity.

More than 95% of the solar cells produced in China are currently sold abroad.

With Golden Sun and other new initiatives, China's solar power producers will have a more robust local market to add to their revenue sources abroad.

We'll keep you up to date with the latest in Chinese policy and market moves.

Regards,

Sam Hopkins

International Editor

P.S. Green Chip International readers have already closed out gains of 42% and 32% in separate Chinese solar power stocks, and we're sitting on one more that's up 34% in just two weeks! Don't miss the next one. . . Join GCI today and get our market-beating research advantage.

Japanese Solar Power Investments

Japan's renewable energy market is at a crossroads.

Japanese installed wind power capacity actually dropped from March 2008 through the same month this year, after an underwhelming increase in 2007.

New regulations are partly to blame, since the government now requires wind turbines to meet the same safety standards as tall buildings — despite wholly different surroundings.

Overall, the world's #2 economy ranks a woeful #20 in the latest Ernst & Young Renewable Energy Attractiveness Index. For wind power specifically, it's even lower down the ladder, despite being the world's fourth-heaviest greenhouse gas (GHG) emitter and home of the Kyoto Protocol.

But in solar power, Japan ranks third in the world for installed capacity, behind only Germany and Spain. . .

And those countries adopted Japan's feed-in tariff model for stimulating their own homegrown solar sectors!

Now, with silicon prices cratering and government support for the sector increasing, we're seeing Japan become a magnet for foreign solar power investment.

Taiwan's AUO Makes a Big Bet on Japanese Solar

The government's pumping $9 billion worth of stimulus into the market, pushing demand for solar panels in Japan up for the first time since 2006.

Prime Minister Taro Aso said on June 9 that solar power and electric cars will play a key role in lifting Japan out of the economic muck and into robust growth. The PM foresees a cleantech industry worth 50 trillion yen (about $510 billion) by 2020.

He wants solar power generators installed at roughly 37,000 public schools in the next three years, a move which would keep PV production lines humming along steadily through 2012 and beyond. The total increase would boost Japanese solar production twentyfold by 2020.

Yet, Aso knows that such a rich future for Japanese solar won't be fueled solely by domestic money. . .

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Taiwanese technology company AU Optronics (NYSE:AUO), a maker of LCD flat-screen televisions, just announced it would take a 51% stake in M. Setek, a Japanese solar material supplier that's been around since 1978. That move is both opportunistic and optimistic, given today's silicon market conditions.

Raw material providers like M. Setek are hurting from silicon prices that have dropped sharply in the past year, from nearly $1.50 per pound to just above 50 cents today. Though current levels are closer to the 5-year baseline, the boom-bust cycle we've seen in the global economy and energy investment over the past two years has had a severely destabilizing effect on upstream firms.

In the current environment, other Asian solar material providers are issuing shares — China's ReneSola (NYSE:SOL) is selling $100 million of new stock — and tapping fresh lines of credit.

But M. Setek found a buyer in AU Optronics, and investors like it. AUO shares have gained since the $125 million private-placement deal was announced.

And AUO isn't alone — other internationally listed companies are also pouncing on Japan's stimulus-fed solar consumer surge and could expect a market premium for their efforts.

Canadian Solar to Sell Chinese-made Cells in Japan

Canadian Solar (NASDAQ:CSIQ) announced just this week that it will target 12,000 kilowatts of yearly solar cell sales in Japan from its Chinese production base.

With the government paying up to $785 per kilowatt for rooftop photovoltaic (PV) installations as part of its $9 billion rooftop solar stimulus package, CSIQ is smart to turn towards the Land of the Rising Sun.

As Nick Hodge has pointed out in recent reports from Wall Street's Renewable Energy Finance Forum, clean energy financing flows are shifting fast and furious these days.

Low silicon prices, though they hurt producers' balance sheets, are enabling governments to get more bang for their stimulus bucks (or yen), which in turn will boost sales at vertically-integrated solar power companies.

Regards,

Sam Hopkins

P.S. Nick and I work hard to keep Green Chip International readers ahead of the curve when it comes to how much money is going where, and when. As I've shown you today, many of the best plays on global green projects like Japan's massive solar stimulus are actually found on Wall Street. It couldn't be easier, or more necessary, to take advantage of a world's worth of opportunities in clean energy. GCI subscribers are sitting on current gains of 186% and 29%, with plenty of other winners already closed out for profits. Don't miss the next moneymaking opportunity. . . check out GCI today.

G20 Renewable Energy

"We have today therefore pledged to do whatever is necessary to build an inclusive, green, and sustainable recovery."

That's all the Group of Twenty said about renewable energy in its communiqué this week.

You know what, though? That one clause was plenty for us, and plenty to reinvigorate renewable energy stocks' moving forward...

By taking a holistic approach to the reform of global financial institutions and the way money moves, the G20 will ensure the flow of funds into clean energy ventures and national projects.

Just consider the direct chain reaction we've become familiar with over the past year of stock market turmoil. When jobs are lost, consumers lose confidence, and energy spending falls. And despite some impressive discipline within OPEC to lower oil output and fight declining crude prices, black gold has come down hard.

The same whirlpool of confidence goes for many energy stocks over the past year. . . But the most recent quarter of clean energy market gains foreshadows a global alternative energy infrastructure buildout.

It's exactly the kind of inclusive and sustainable recovery effort the G20 countries all agree on, and that broad consensus means profits for investors who connect the dots.

Consider the biggest news item from the G20, the tripling of the IMF's endowment to over $1 trillion. . .

Energy: the "Missing MDG"

IMF and World Bank leaders have lamented the lag in implementing wide-ranging Millennium Development Goals set by the UN for poor countries. Environmental sustainability is one of the MDGs, but that alone seems to miss the point.

Even before the bubble burst, the head of the Intergovernmental Panel on Climate Change, India's Rajendra Pachauri, said that in one region in India it would take 240 years to provide electricity access at the current rate of rural electrification. That means little or no economic connection to the outside world, and even when recovery comes to New York or New Delhi, such unconnected areas are left years behind the global rebound. So, Pachauri calls energy the "missing MDG."

Worse, in cash-strapped developing nations left in the lurch by all our Anglo-Saxon economic engineering, the recession has meant highly beneficial, community-based energy projects have been scuttled.

That will change. IMF head Dominique Strauss-Kahn was effervescent this week, beaming "the IMF is back!"

And in contrast to the IMF's role in the 90s and early this decade, the Fund should micromanage national finances less and focus on getting money to long-lasting projects with multiplier effects in jobs and economic growth. . . Clean energy projects fit the bill perfectly.

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How Would You Spend $1 Trillion?

Along with the major increase in funding that G20 leaders promised together, side discussions between Barack Obama and heads of state from China, India, Russia, and others point to a more concerted heave-ho when it comes to energy and environmental matters. That has to do not only with funding but also a convergence in principles that extends from financial regulation to power consumption.

In contrast to the Bush-era staring contest in which the U.S. would not move on such matters until China and India did, the new administration recognizes the fact of American leadership:

"If China and India with their populations had the same energy usage as the average American then we would all have melted by now," the President said at the summit.

Notwithstanding the sci-fi imagery, the performance of listed clean energy companies from China and India proves just how urgently China's firms are developing ideas and products to meet booming market demand.

The market, in turn, likes what it sees...

Just take a look at these Chinese solar stocks over the past month:

That's a trading-floor result of policy moves that have accumulated in China over the years, as the central government saw the writing on the wall and encouraged private enterprise to develop solar solutions to China's coal-fired pollution problems.

Smart energy development is not only a great way to get the economy back in gear, but it's also an insurance policy against future spirals of energy costs that can feed inflation, kill jobs, and deplete national resources.

As the financial system is strengthened and rid of its toxic assets, clean energy will emerge as top priority for targeted financing as well as a moneymaking opportunity for retail investors. The G20's commitment to fighting protectionism tells us the flow of products and trade credit will continue, enabling cross-border cooperation and investment.

This April is a wild month for Barack Obama and clean energy market observers worldwide. Just in the next week, the President has to attend a major EU-US Summit and NATO Summit, and he'll be expected to be out in front in consensus-building there just as he was in London.

It's also a busy period for banks and companies eager to tap the renewed cascade of international financial support for clean energy.

That's why I'll be at the Renewable Energy Finance Forum in Rio de Janeiro, Brazil at the end of this month. I'll be in the mix with all the listed firms, banks, and even government representatives as they create exactly the kind of deals the G20 and IMF want to kickstart.

As I listen in, I'll be passing the best opportunities along to Green Chip International subscribers from right there in Rio.

And here in the States, I'll be at the Department of Energy's EIA Energy Conference next week in D.C., getting the lowdown on U.S. energy development and how my government plans to move ahead and stimulate clean energy in this global recovery effort.

If you're going to be there, contact us through the GCS website, and the Green Chip team would be happy to meet you and chat about all the developments we're watching in energy this spring.

It's truly a historic time to be an energy investor, and the upside keeps building.

Regards,

Sam Hopkins

International Editor

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Solar Stocks

If you needed yet another reason to pay close attention to the solar industry - this is it...

Earlier this month, First Solar (NASDAQ:FSLR) announced that by the end of this year it will have the capacity to produce more than 1 GW per year. To put that in perspective, that's the equivalent of an average-sized nuclear power plant!

Of course, unlike a nuclear power plant, First Solar's technology does not require the mining or transportation of uranium to stay operational, and it doesn't come with $31.4 billion in waste management costs. That's what has been set aside for the nuclear waste fund, according to the Nuclear Energy Institute.

Now, we put a buy out on First Solar back in November at $88.61 a share. Today the stock trades around $153. Given today's market, a 72% gain in 4 months isn't bad.

Of course, we're not about to sell this thing now. Figuring very conservatively, this stock is worth no less than $170 a share. And depending upon how quickly the stimulus money moves through the solar sector later this year, investors could be looking at a share price of around $190.

Now, I realize that most investors don't want to hear about how their tax dollars are going to be used to provide support for the solar industry - or any industry for that matter. After all, we all advocate a free-market system without government intervention.

But the fact is, when it comes to energy, there's never really been a "free market" system in place.

No Apologies for Profits

Whether its solar and wind or oil and coal - across the board, energy has long been highly subsidized.

So we make no apologies for taking full advantage of the government's latest efforts to bolster solar development in the U.S.

Now as you already know, $43 billion was set aside in the stimulus for renewable energy. But truth be told, it's the solar industry that's getting the lion's share on this one.

First off, as my colleague Nick Hodge has mentioned before, consumers can now take a 30% refund on the value of new installations. . . before state incentives.

So a $25,000 solar power system in North Carolina, for example - where there's already a 35% state credit in place - will now run about $8,750.

Consumers in North Carolina can shell out that much to the utilities in just 3 ½ years!

With that kind of payback, no one should be surprised to see homeowners rush to take advantage of these discounts on the taxpayers' dime.

There's also $6 billion dedicated to loan guarantees on new solar construction, and $5.5 billion set aside so federal buildings can increase their use of renewable energy.

According to the U.S. General Services Administration, 75% of those projects receiving funding will use solar technology.

This is huge!

But it doesn't stop there. . .

In order to facilitate those large-scale solar farms in places like California, Nevada and Arizona, the government is also coughing up billions for infrastructure upgrades that will move those solar-powered kilowatts to the grid.

So basically, the government is not only funding new solar development - but they're also guaranteeing the infrastructure necessary to move all this clean, solar-powered electricity.

The Game Changer

It couldn't be more obvious that Washington desperately wants to add solar to the nation's energy mix.

Sure, they could've done this years ago, as solar technology has been around for decades. But the truth is, it's never been able to compete with coal, nuclear or natural gas.

Until now. . .

You see, with every doubling of solar capacity, the cost of solar comes down by about 20 percent.

My friends, the government is giving the solar industry a billion-dollar shot of steroids. And as a result, new capacity is set to soar - and the cost of solar is expected to fall dramatically.

So much, in fact, that according to the Sacramento Municipal Utility District, the price of solar can be competitive within 2 years.

I'll say that again, because it's worth repeating. . .

In 2 years, solar can be competitive with coal and natural gas.

This is the game-changer, my friends. And this is what now allows the solar industry to guarantee one of the single most disruptive technologies in the history of power generation.

Now if you're currently a member of Green Chip Stocks, you're well aware of our favorite solar companies that have already started to benefit this year.

In fact, you've probably already made a few bucks in these early stages of Washington-fueled growth.

But if you're not already a member, you can get a free copy of our latest report: Profiting from the Great Solar Shakeout.

This report outlines our top solar picks for 2009 and beyond, and is free when you become a member.

Whether you think solar is the real deal, or think it's nothing but hot air, one thing is certain. . .

Thanks to the government's new-found love for solar, there are a couple of solid solar stocks that can make you a lot of money this year. So why not make it?

Click here to get your free report now.

To a new way of life, and a new generation of wealth. . .

Jeff

Dubai Renewable Energy

You know the energy world is changing when a Persian Gulf financial crisis has big renewable energy implications...

Abu Dhabi produces about 90% of the oil in the United Arab Emirates and is host to the world's first green city project, Masdar. Abu Dhabi is also an angry neighbor, since it just had to bail out heavily-indebted Dubai with $10 billion in bond purchases.

That was the biggest news of the year in the UAE, but it barely got a column in the Western press.

Dubai got itself $80 billion underwater in the past few years, leveraging itself into the stratosphere so it could build opulent manmade islands, indoor ski slopes, and the world's tallest building. It was an orgy of irresponsibility in the conservative Gulf region.

Even though it holds only about 5% of the UAE's oil, Dubai's rulers and eager entrepreneurs spent like they had an endless bounty of the commodity. They anticipated oil prices would stay high and optimism would soar higher still. Both expectations crashed in 2008.

Now, Abu Dhabi's Masdar initiative, a partnership with MIT to build a zero-carbon emissions city on the emirate's desert edge, was almost the polar opposite in terms of fossil fuel foresight. Masdar, which means "source," was launched with the goal of maximizing current oil exports and creating a prosperous future that doesn't hinge on oil wealth or even oil usage.

Masdar's supply demands already have global solar, wind, water, and cleantech firms salivating...

American solar stock First Solar (NASDAQ:FSLR) is first to bite, having been chosen to provide solar panels to Masdar's solar power plant. Other Green Chip Stocks favorites are sure to follow. Will those same companies have a fresh target in Dubai, after Abu Dhabi imposes bailout conditions that promote clean energy?

Have You Heard of the Conference of Parties?

Only a few have. But those in the know are already turning tidy profits.

The Conference of Parties -- better known as COP-15 -- is a clandestine meeting attended by leaders from 192 countries.

Their goal: to map the world's economic trajectory for the next 50 years.

Those familiar with COP-15 are already aligning their portfolios accordingly. Click here to learn what the meeting's all about, how it will alter the investment world, and how you can get ahead of the profit curve.

Dubai can't expect its next-door financial safety net to come without some conditions. As Gulf Research Center economist Eckart Woertz said early in March:

"Most likely this comes with strings attached, with a price tag. Before, Dubai was dependent on international banks. Now it's dependent on Abu Dhabi."

Masdar 2: Dubai?

The UAE, with all of its seven component monarchies, was the first major bloc of oil producers to ratify the Kyoto Protocol.

This could stem partially from a tight relationship with Japan, which is the UAE's top crude oil customer (60%) and the consumer of almost all UAE's natural gas.

But ratification and action are of course two different things, and motivation can come from many sources. In Abu Dhabi, the Masdar project opened the flow of the world's largest sovereign wealth fund, estimated at $328 billion late last year, into bottom-up renewable energy development.

The strings we'd like to see attached to the UAE central bank and Abu Dhabi's Dubai bailout are ties that bind Dubai to smart growth projects such as Masdar.

Dubai can turn from hosting glitzy sports events and branding itself as a sort of Middle Eastern Monte Carlo into a cooperative effort for sustainable regional development through negawatts.

On that note, Masdar is currently operating not as a city but as a sovereign investment firm, the Abu Dhabi Future Energy Company.

Future Energy Company CEO Sultan al-Jaber said in mid-March that project leaders and financial analysts will exercise due caution in 2009, but will still spend $15 billion on Phase 1 of the Masdar plan.

That's more than the bailout Abu Dhabi had to pony up on Dubai's behalf, but it's still only the first chunk of money it will take to make Masdar a carbon-neutral home for 40,000 people by 2016.

"2009 is an execution year for us. We will be looking for opportunities worldwide but are being cautious in finding investment opportunities. It is wait and watch now. . . how the economic downturn will be," al-Jaber says.

We'll wait and watch, too. But the energy tide in the Persian Gulf is turning steadily towards clean energy market growth, and the opportunities are mounting by the day.

Regards,

Sam Hopkins

P.S. - First Solar is an American firm, but Abu Dhabi's strong ties to Japan and worldwide reach mean the UAE's sovereign wealth will be diffused throughout the international renewable energy market. By diversifying into clean energy companies in different regions, including the Middle East, Green Chip International readers are positioned to capture Masdar project spending wherever it ends up. To learn more, check out GCI today: http://www.angelnexus.com/o/web/11403

P.P.S. - Not every country can count on a neighbor's money stockpiles to fund energy projects, and they certainly can't expect banks to finance as freely as they used to. I'm heading to the Renewable Energy Finance Forum in Brazil next month to find out just how the gears are turning these days, to make sure promising plans aren't abandoned and due diligence is back to responsible pre-bubble standards. I'll be reporting regularly from Rio and other spots in South America, but the best way for you to understand is to be right there with me. Find out about the 2nd Latin America Renewable Energy Finance Forum in Rio right here.

Solar Power Stocks

You all know a global recession is currently underway.

Layoffs. Bailouts. Deleveraging. Tight credit. You've heard it all.

But as green investors, you need to know exactly how overarching economic conditions are affecting individual sectors in the cleantech space, and how you can still make a buck with all the carnage in the markets.

Solar power stocks seem to be the most sought-after cleantech destination, so let's see how that market is responding to the turmoil.

Solar Stocks Battle Falling Prices

I'm not just talking about falling stock prices, I'm talking about falling average selling prices (ASP)—a new must-add term to your cleantech vocabulary.

Average selling prices, with respect to solar, include both the price of the raw material, polysilicon, and the selling price of the finished module.

Poly prices stood at about $400 per kilogram not long ago, but have fallen to about $120 per kilogram in the past few quarters as demand for computer chips waned. All indications point to further price reduction in the near future.

The rise and fall of silicon prices is evident in a long-term chart of companies that operate in that sector:

Companies that process, refine, and sell polysilicon enjoyed extraordinary runs when their product was in high demand and short supply. But they witnessed an equally dramatic fall when demand eased and prices began to fall.

Expect this trend to continue, with Renesola (NYSE: SOL) being the earliest to rebound as the current Chinese cost advantage is magnified by continued falling prices.

The other average selling prices relevant to the solar market are those of the finished product, panels. Keep in mind that the long-term goal of the solar industry is to drive down prices in order to compete with traditional sources of energy.

While rapidly falling prices like we're seeing now help reach that goal, they also take away dollars in the short-term from the almighty balance sheet. This is because solar companies can't reduce operating costs in the short-term as fast as selling prices are falling. But solar companies will begin to make money once again as operating costs are reduced.

The companies that reduce costs the fastest will be rewarded with higher earnings and higher share prices.

Secret COP-15 Meeting Sparks Trillion Dollar Shift

According to billionaire venture capitalist John Doerr, COP-15 signifies. . .

"Nothing less than the reindustrialization of the whole planet."

There's $45 trillion at stake as that happens. Click here to learn what's going on and how smart investors are already profiting.

Current selling prices for European manufacturers are in the €2.50 per watt range — a significant discount from just a few months ago. Established Chinese producers are selling panels in the €2.15 to €2.20 per watt range. Yingli (NYSE: YGE) has reported selling panels for €2.05 per watt to large customers.

Falling panel prices are due to reduced poly costs and reduced demand spurred by the recession. A slew of new incentives, from the U.S. and elsewhere, should begin to stimulate demand. Prices will slightly rebound when that happens, but remember, long-term overall cost reduction is the ultimate goal.

When selling prices begin to rise with renewed demand, the companies that can keep prices low by reducing production costs and increasing panel efficiencies will win.

I'm sure you don't need a chart to understand how falling selling prices for modules have affected the share prices of major solar producers.

But the deep discounts now available on solar stocks provide a few unique opportunities for profit in both the short- and long-term.

Here's what I mean. . .

Investing in Solar Power Stocks

Considering some solar stocks have lost as much as 95% of their value in the last year, as a green investor you have to assume the worst-case-scenario—other than bankruptcy—has already been priced in.

As such, any good news is enough to push stocks higher, even if it's just a bit higher.

Take the last five days for example. Solar stocks were thrashing around their lows in the second half of last week and early this week.

But a positive note from Citi this morning, coupled with JA Solar's reporting of better-than-expected revenues, was enough to send solar stocks soaring.

We're seeing 20%+ pops today just because JA Solar's earnings were mediocre instead of terrible. But that's the current state of the market. And that's exactly how you can make money on solar stocks in the short-term.

I've known for some time now that solar stocks have been way too low. So, last week I sent the following update to readers of the Alternative Energy Speculator:

Let's use today's dip to get into LDK Solar (NYSE: LDK), Renesola (NYSE: SOL) and back into JA Solar (NASDAQ: JASO).

LDK broke through its 52-week low today, trading in the $4.60 range. Renesola came within $0.04 of its low at about $2.10. And JA Solar is back down to were we bought in the other day.

I don't think they'll stay here for long. Even though we're not seeing the high valuation we're used to, these prices are simply unjustified.

As you can see from the above chart, those plays panned out perfectly, each one now standing with about a 10% gain. Readers of Alternative Energy Speculator now have that cash in their pockets.

Short-term solar gains like that are hard to come by in this market unless you have the advantage of being guided by an industry expert. So many factors are currently affecting stock prices that it's sometimes hard for individual investors to figure it all out.

In the solar market alone you have to consider not only the falling prices we just discussed, but also the harsh winter in Germany that is delaying installations, the fickle incentive market in Spain, the robust potential of U.S. and Italian markets in 2009, and a dozen other solar-specific market factors.

And you have to know about all that stuff before taking into consideration the negative financial headline du jour.

The same holds true for long-term solar profits. Prices are low now, but do you know which producers are likely to lower costs the most over time? Do you know whose panels major installers now prefer?

This is all required information for successfully investing in solar tocks.

You can get it piecemeal here for free and try to turn a profit on your own, or you can get all the information you need, including purchase recommendations with price targets, delivered right to your inbox.

Readers of The Speculator have cashed out of four winning plays in the past two days. And that's on top of the numerous other winners we've had so far this year, even as broader markets reached their lowest points in more than a decade.

Now is not a bad time to invest, provided you have all the information you need to navigate a fickle market.

Banks are once again lending to cleantech projects now that they've been made more attractive by governmental tax incentives. There's no reason to sit on the sidelines; stocks are at ridiculously undervalued levels, and I have the insight you need to profit when they pop.

So join the Alternative Energy Speculator today!

You'll earn back the membership fee in no time as you turn in-depth industry reports, company profiles, and buy recommendations into easy cleantech gains.

Call it like you see it,

Nick

Solar Panel Stocks

Solar panel stocks are at a major crossing point.

In 2008, record oil prices caused a big push for clean energy. Demand for polysilicon drove prices up and producers' share prices went along with them. Those who controlled the bulk of the supply chain and buffered themselves against price spikes were able to make the most out of the panel-price runup.

Then oil and the global economy fell off a cliff.

Now, solar panels are down from $4.20 per watt to just over $3... a 30% drop.

The Silicon Key for Solar Market Success

Computer sales are abysmal and could get weaker deep in the worldwide recession, and the virtual halt in microchip production means silicon is far into oversupply.

The gears of consolidation are turning, though, with the recession putting semiconductor manufacturers out of business and leaving industrial-grade silicon in the hands of fewer and fewer firms.

"When this recession ends," The New York Times's Bits blog forecasts, "the chip industry that emerges on the other side will look rather different than it did heading into this thing."

We don't have to wait for the recession to end for that transformation...

The government of Taiwan just announced on March 5 that it will set up an island-wide Taiwan Memory Company, which will crank out DRAM chips for phones and household gadgets, under the auspices of the country's economic ministry.

If Taiwan Memory Company can kickstart global semiconductor production (as the nation is disproportionately powerful on the international semi scene), which will then flow into a stimulated computer market, silicon prices could go back up quickly.

In that scenario, companies that used their vertical integration strategies to pick up lower-priced silicon will watch their competitors get squeezed in the spot market.

Oil prices are creeping back up, and major government incentives mean that solar panels are doubly attractive—costing a third less and heavily subsidized as part of various countries' stimulus packages.

We may be near a bottom in polysilicon and oil at the same time, and solar panel prices are set to recover fast.

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The 20 Year Solar Panel Market Guarantee

Expectations have been tempered across the global equity market, with earnings and forecasts settling deeper into a prolonged funk. Caution is the key for both lenders and project heads.

Yet we're hearing about credit loosening up for renewable energy projects in Europe, where the state development bank of Germany, KfW, is stimulating solar production through '09.

The only catch is, the solar panels used to reach Germany's expected 2+ GW of installed capacity in 2009 will have to last 20 years or more...

Fine by us! Top producers like Q-Cells issue standard warranties of 20 years or more, with panels operating at greater than 3/4 capacity throughout that time.

Tight lending has forced Q-Cells and other producers to get their industrial bona fides in order. The ones who can't prove their cost advantage and come up with solid payback plans simply won't get loans, and their blueprints will get snapped up by the survivors... if those plans are deemed worthy of continuation by the remaining larger, more creditworthy firms.

At its root, a warranty is a pledge from producer to consumer.

In 2009, though, a warranty as much a handshake between creditor and debtor as it is anything... think of all the fright surrounding Detroit automakers and whether the Pontiac you buy today will be free to fix if GM goes under. GM can't sell cars because it can't stand behind them, and lending to GM is too speculative if new sales aren't picking up.

It's not a vicious circle—it's a vortex. And it's sucking in company after company, in nearly every industry.

No one wants a shoddy solar panel either... Not utilities like Germany's E.ON, who want to buy excess capacity from companies and households with installations, and certainly not the home and business owners who are tapping investment tax credits and want energy savings to put them at parity with coal or gas-generated electricity.

For us investors, though, it's even more important to know there's a two-decade time horizon for quality clean energy stocks.

That's the warranty you need, even if you don't think a single solar panel will ever sit on your rooftop.

And if you're looking for solar stocks that pass the 20-year test, take a look at some of the Green Chip International portfolio stocks we've picked precisely because they've got the goods to make it through this recession and beyond.

http://www.angelnexus.com/o/web/11161

Regards,

Sam Hopkins

International Editor

www.greenchipstocks.com

Buy American Solar Stocks

So the stimulus is spending over $50 billion on clean technology in an effort to increase our use of renewable energy and improve our decrepit power grid.

Now what?

Most of the stocks that should've received a nice bump on word of billions of dollars of federal funding have mostly fallen flat. Take a look:

Of course, there was (and still is) plenty of money to be made by using the stimulus to your benefit. Some of those stocks gained 85% or more from early December to early January in anticipation of a "green" tinted stimulus package.

And green tinted it was!

But a lackluster bank plan, mounting foreclosures, and rising employment have diminished the response in the stock market, to say the least. Yesterday, broad market indicators slid to their lowest levels in 12 years—talk about a lost decade.

Not to worry. The green provisions in the stimulus are too large for the market to ignore. Stocks that should've risen on its passing have been swept up in yet another market sell-off beyond their control, presenting us with the perfect opportunity to buy in and ride them up when the panic selling subsides.

And I have the perfect plan to do it.

"COP-15"

It's shaping up to be the most critical energy summit of the century.

At stake: a global market worth $45 trillion.

This unprecedented meeting kicks off on December 7 in Copenhagan. You can learn exactly how it's all going to go down -- and how our first COP-15 trade could deliver you a tidy 112% -- in our new report.

Click here.

Stimulus Guarantees Solar Winners

It may not be the pure free market economics we're used to, but desperate times...

The government has clearly selected the industries it feels need the most attention and can provide the most benefit to be winners in this plan. By leveraging what is now law—a guaranteed market—you can walk away with certain profits.

Now that the language of the bill is clear, I've been able to figure out not only which sectors will benefit, but exactly which companies are about to get a distinct business advantage.

Solar, thanks to strong lobbying efforts, is in a particularly sweet spot.

Investors are now able to take a 30% federal refund on the value of a new installation before deducting any state incentives. So a theoretical $100.00 dollar solar system in North Carolina (35% state credit) now only costs the investor $35.00—because both federal and state incentives are now calculated from the full price. Best part is, those federal incentives have no cap and the project need only be finished by 2017 to qualify.

This incentive alone will rapidly increase solar demand as homeowners and investors alike rush to get discounts on solar installations on the taxpayers' dime. But there are many more solar provisions in the stimulus that will only magnify the gains that can be taken on the right solar stocks.

There's also $6 billion dedicated to paying the fees on guaranteed loans. This clause is aimed at encouraging banks to make loans for renewable projects. Most estimates say that $6 billion in guarantees will translate into $60 in new loans.

And Congress didn't stop there.

They also guaranteed profits for you by setting aside $5.5 billion so federal buildings (including schools) can increase energy efficiency and their use of renewable energy. The U.S. General Services Administration (GSA) estimates that 75% of the projects that receive this funding will use solar technology.

The only catch? To qualify for those incentives projects must use solar panels that are GSA-listed. This is also known as the "Buy American" clause. And it's precisely how I know exactly which stocks will benefit the most.

Solar Winners Guarantee Profits

That tiny little "Buy American" clause has some pretty heavy investment implications. While GSA-listed solar panels can also come from the EU, Japan, Korea, and Singapore, it's most likely that the bulk of solar panels installed the next few years will be American-made.

Massachusetts-based Evergreen Solar (NASDAQ: ESLR) will be a likely beneficiary. Down nearly 90% in the past six months, any benefit from the stimulus could be worth a fortune.

Even so, I'm more interested in the three other solar stocks that accompany Evergreen in this chart:

They've been able to stay a bit more buoyant than ESLR over the past few months (If you can call down ~60% "more buoyant."), implying they have more inherent strength and intrinsic value.

I can tell you for sure that they have much higher sales, production, and brand recognition, and will be the "go to" manufacturers of solar panels over the next few years.

And if all the previously listed benefits weren't already enough, the stimulus also includes a manufacturing tax credit that will allow companies to knock 20% off the cost of building a wind turbine plant or solar cell or panel plant here in the States. So not only do investors get a boosted discount for using American-made panels, but the companies making the panels get a 20% tax credit to build factories to crank out even more panels.

It's the motherload of federal stimuli! And investing now in the companies that will prosper could deliver you a fortune. I've outlined them all for you in the new report, "Buy American: Three Solar Stocks for Profit."

The companies I'm talking about here—stalwarts of the solar industry—are down over 50% since last September. One of them has gone from over $85.00 to just about $30.00 as economic worry hit the country and the rest of the world. That's a 65% loss.

Getting in now and riding it back up to $85.00 or higher could be a 280% gain in your portfolio. And my new report offers you a way to do that three times over, offering profit potential of several hundred percent.

But you have to hurry. In my haste to find profit opportunities arising from the stimulus, I've beaten Wall Street wonks to the punch. Of course, they'll find out about this opportunity and exploit it as they always do. And when that happens, it could be too late for the average investor.

By getting access to my new report today, you can take your position early and ride the wave as the rest of Wall Street tries to play catch-up.

Call it like you see it,

Nick

Global Alternative Energy ETF

International renewable energy titans are starting to see the credit crunch as an opportunity...

The European Wind Energy Association says stiff financing may lead to consolidation in green power as weaker companies get shaken out or gobbled up.

"We may see some of the smaller projects which have turbine delivery contracts but are struck by the banking liquidity freeze being taken over by the larger power companies," EWEA CEO Christian Kjaer predicts.

And Kjaer's appraisal cuts across the renewable energy spectrum.

Small-scale solar, wind, or even marine power projects won't necessarily be abandoned if financing falls through—instead they'll add to the portfolio of larger companies with more solid credit that can still tap major loans.

For a peek at which large companies will come out on top, let's mine one of the big global green exchange-traded funds.

Bull Market. . .

Bear Market. . .

It doesn't matter!

No matter which way the market is heading, this is the only place to land

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Global Alternative Energy ETF: A Peek at the Credit Crunch Survivors

The Market Vectors Global Alternative Energy ETF (NYSE:GEX) is what it sounds like—a fund that is diversified both across clean energy sectors and international boundaries. Check out this breakdown from www.etfconnect.com:

First Solar, Inc. (USA)

Gamesa Corporacion Tecnologica (Spain)

Verbund-Oesterreichische Elektrizis (Austria)

Q-Cells A.G. (Germany)

Kurita Water Industries Ltd. (Japan)

Solarworld A.G. (Germany)

Renewable Energy Corp A.S. (Norway)

Trina Solar Ltd. (ADR) (China)

Itron, Inc. (USA)

Energy Conversion Devices, Incq (USA)

Even with access to a world's worth of renewable energy stocks, America's First Solar (NASDAQ:FSLR) is GEX's top holding.

That makes sense in a worldwide consolidation scenario because First Solar cranks out thin-film PV cells for just over a buck a watt.

Being able to produce modules for $1.08 per watt makes First Solar attractive by itself. But better margins also mean more cash for acquisition and less dependence on financing in the long run.

And First Solar is not alone in that strength, as we see across the world with Yingli Green Energy.

Yingli's Vertical Integration Key

First Solar's advantage in the U.S. is based on universal manufacturing logic: the more of the production process you control, the lower your costs are likely to be.

China's Yingli Green Energy (NYSE:YGE) isn't among GEX's top holdings, but the approach it has taken to getting solar cells out the door cheaply has put it in the global green elite.

Yingli has vertically integrated its solar business at all levels: ingots, wafers, cells and full modules, giving it a long-term strategy that is well-suited to help fight off recession pressure.

Why would you wait to tap that kind of potential? Green Chip International subscribers just sold Yingli stock on February 12 for a 55% gain in just under 3 months... we really rode the international wave up on that one.

Solar is hardly the only clean energy sector where it's important to cut costs and control production—Nick Hodge wrote in Wealth Daily Wednesday about the global wind energy market's 363% expected growth over the next five years. The U.S. is making big strides, as Nick notes:

"With little fanfare, the U.S. passed Germany last year to become the world leader in installed wind energy capacity. Perhaps more impressive, China's wind energy capacity doubled for the fourth year in a row."

That neck-and-neck race for green energy leadership will continue. Wherever the opportunities are, Green Chip International subscribers are notified when to get in and when to pull the trigger on profits like we did with Yingli.

We're not only scouring the world for winning trades, we're looking ahead to which have the potential to be long-term winners and survivors of an admittedly tough financing landscape.

The portfolio isn't even limited to direct producers of solar, wind, and other clean energy types... it includes grid technology providers and other essential industries for bringing the new global energy economy online.

Don't miss the next winning recommendation. Check out GCI today.

Regards,

Sam Hopkins

International Editor
Green Chip Stocks

Strategic Economic Dialogue

On December 3, Vice Premier Wang Qishan and U.S. Treasury Secretary Henry Paulson continued multi-year negotiations centering on energy security and renewable energy progress.

As part of their ongoing Strategic Economic Dialogue (SED), each country is looking to the other for answers to pressing questions. Product safety and currency valuation have come up, but most prominent is the role energy plays in binational relations and financial health.

Power production is down in China due to lower coal and steel demand, as well as declining export totals. The drop in factory energy use may give some slack to energy supplies, but it's the wrong kind of relief. China is also set to implement a retail fuel tax at the beginning of the year as part of a broader oil price overhaul, and national oil company CNPC's latest acquisition came in an area America knows well...

In November, CNPC became the first foreign oil company to ink a deal in Iraq since 2003, with a 23-year long service agreement for the Adhab oil field.

Don't let the downturn lull you into energy complacency. China's continuing international oil deals show how seriously Beijing is taking the energy demand of coming decades. They're also serious about cleaning up their act and increasing the clean energy portion of the Chinese economy.

Reforming China's Economic Growth with Energy First

"China is under growing tension from its large population, limited resources and environment problems, and needs faster reform of its economic growth pattern to achieve sustainable development," Hu said succinctly to top Party brass last week.

At the same time as Hu calculates steps to ensure the economy's health, the country is getting ready to commemorate former leader Deng Xiaoping's January 1979 economic reforms. Deng opened China to international trade and investment, setting it on the path to greater prosperity and participation in the global community.

Deng's oft-quoted aphorism, "To get rich is glorious," also challenged Maoist dogma, shaking up the ideological foundation of Chinese Communism.

Dial the clock forward from 1979 to today.

9 Billion Barrels of Light, Sweet Crude the Saudis Will Never Get Their Hands On...

If Bakken boom stocks can see their prices increase 300%, 400%... even 500% with oil discoveries of one or two billion barrels... just imagine what a discovery of up to nine billion barrels of oil would do to a stock's price.

Sure, we're already sitting on gains of 195% and 153% on just one of these plays already... but the run is far from over.

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While the general trend has been toward economic openness, information is still censored and "ideological security" is as prominent as national security or energy security in many political circles.

Having swarmed the metropolises in search of jobs as factory workers, construction laborers, and domestic helpers, the credit crunch and stock market tail-spin hit migrants hard in recent months...

A torrent of some 20 million migrant workers are returning to villages from major eastern cities like Shanghai and western boomtowns such as Xining.

Keep in mind that those rural denizens made heavy use of internet cafes and cell phones to communicate with friends and families back home, and they will certainly take advantage of new media to express their frustration. That's a simmering pot that President Hu and others are watching carefully.

What a Difference a Few Years Make

The first time I traveled to China in 2005, the country's best days of the new millennium were actually right on the horizon. China had yet to run through a stock market boom-bust cycle or host the Olympic games. But that year, there were 87,000 riots (labeled "mass incidents") in the Middle Kingdom.

Now that 2009 GDP growth is expected to hit only 9% instead of double-digit rates China enjoyed in recent years, uncertainty is the prevailing emotion across the country, and Hu hears an alarm.

China has tried to draw reasonable parallels to the West's Industrial Revolution. It's true that London and New York choked with soot a hundred years ago. Factory fires and tenement squalor led to political violence, eventually settling into the labor movement and strong regulations to encourage responsible growth.

In the Kyoto age, though, China's double-digit GDP growth became more of an excuse for the United States than it was for China. George W. Bush and his pals—still busy right now, gutting environmental regulations before Obama takes office—opposed emissions restrictions on the grounds that China and India weren't held to the same standards.

This, in turn, might have doomed China to repeat our mistakes from the turn of the last century. Instead, Chinese leaders looked at their polluted rivers and streams (China has 17 out of the 20 most polluted waterways in the world), took a deep and noxious breath, and took their own steps to mitigate environmental damage.

China has pledged to have at least 15% of the country's energy capacity come from renewable sources by 2020, doubling green output and adopting a Green GDP that factors environmental costs into national economic growth.

Progress towards those goals has given us a slew of U.S.-listed renewable energy companies. They were brought public with financing fed by highly capitalized investment banks that were eager to tap China's energy hunger... even if the payback periods on these companies' technologies were so long that similar U.S. firms would get laughed at.

I'm talking about companies like Solartech International Holding (Pink: STKQF) and Solar Nigh Industies (PINK: SLND) that debuted to much fanfare but quickly fizzled to the Pink Sheets or became defunct.

Now, one major topic of discussion between Paulson and his Chinese counterpart is China's intent to devalue its currency. That runs in the opposite direction of what U.S. trade representatives have wanted in recent years. They think China's exports are too cheap already, and they want the yuan currency to float freely.

But with the export economy cooling, China wants to keep the yuan down against the dollar...

That means oil will be more expensive in yuan terms, and it also means that Chinese-produced renewable energy products may be cheaper than ever to move around the world.

The result is huge volume for Chinese-based solar, wind, and other renewable energy companies.

Stay tuned for more and your chance at a full report on top Chinese companies ready to capitalize in 2009.

In the meantime, check out this full report on the billions of dollars already flowing into international green markets.

Regards,

Sam Hopkins

Top Solar Stocks

Editor's Note: This article originally ran in Energy & Capital, but given the relevance of the topic and the current volatility of the market, I wanted to alert the Green Chip community to its message. Enjoy.

Over the past few months, and particularly over the past few days, solar stocks have been beaten down to previously unseen levels.

One look at the share prices of solar energy stalwarts is enough to leave anyone who's been paying attention absolutely awestruck.

And it's not that hard to figure out what's been going on.

Earlier this year, solar stocks began selling off along with the broader market as a result of Wall Street deregulation and greed that led to a mortgage mess, kicking off a credit crisis that has led to the collapse of numerous storied financial institutions.

All that has been drilled into our heads for months.

The solar sector was certainly not impervious, and fell victim to rampant selling, as did most sectors of the market.

Here's a six-month chart of some solar juggernauts:

Pay close attention to the widespread selling in October and again in November. For me, this is the most startling part of the graph because, no matter how you look at the numbers, there is no way these companies lost more than half their inherent value in two short months.

Sure, market conditions are bad. But sales forecasts surely haven't been slashed more than 50%. Neither have profit forecasts.

Though some solar companies have moderately trimmed their outlook for late 2008 and early 2009, it certainly wasn't enough to justify these egregiously low share prices.

So what we have is a particularly acute oversold situation, and a few well-positioned companies are begging to be bought and held onto for major profits.

Here's why.

3 Reasons This Wind Energy Stock Could

Deliver Gains In Excess Of 112% Within The Next 6 To 8 Months

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Solar Forecasts Remain Strong

Given the rosy growth forecasts for the future of the solar industry, the recent sell-off is both illogical and irrational.
Just consider the following raw data offered by Forbes in a recent feature article:

the crystalline silicon-based solar market will grow from a 3.5 gigawatt market today to a 13.8 gigawatt market, a growth of 294% in the next four years
the amorphous silicon market will grow from 550 MW today to 2.8 GW in 2013, a growth of 409% in the next four years
the cadmium telluride (CdTe) market will grow from 480 MW today to 2.4 GW in 2013, a growth of 400% in the next four years
the thin film market based on CIGS and CIS, copper indium gallium selenide and copper indium diselenide, respectively, will grow from a 41.3 MW market today to 1.2 GW in 2013, a growth of 2,806% in the next four years

To be clear, each of the main four solar sectors are predicted to grow at least 294% over the next four years. The fastest growing sector, CIGS and CIS, will grow an astounding 2,806%.

Traditional energy sectors look like children's playthings when considering this type of growth.

Per the IEA's recent World Energy Outlook, oil demand will grow to 106 million bpd up from 85 million bpd this year.

That's a 25% increase over the next 22 years. Solar is offering no less than 294% and as much as 2,806% in the next FOUR!

Where do you want your money?

What's more, that 25% increase in oil demand won't even be able to be met with traditional black gold. We'll be well past the peak by then. So a portion of oil's future demand growth will have shifted onto renewables.

Even better, the IEA report also said that "Renewable energy... such as solar... will overtake (natural) gas to become the second largest source of electricity behind coal by 2015."

The situation couldn't be any more clear.

The time is now to invest - and invest heavily - in renewable energy technologies. They're certain to be the companies powering the globe for many decades to come.

Solar Stocks: Time to Buy

That's why, late last week, I sent a special alert to the readers of my Alternative Energy Speculator, telling them I'd compiled a report on the five solar stocks that will not only survive these troubled times, but that will go on to provide bountiful returns.

This group of solid solar stocks has it all, including thin film solar manufacturers, raw materials providers, and silicon ingot and cell producers.

By the end of the week, each of the five stocks were up. Four were up in double-digit territory.

And this is at a time when the market is as shaky as an old rope bridge and solar stocks are getting bashed left and right.

Yesterday? Each of the five stocks ended the day higher than my recommendation price again.

That's exactly why I chose these stocks. I knew that given their already oversold state and the high growth estimates for the next couple of years, smart investors would have to start buying them.

You absolutely need to be buying them as well.

Given the grim situation painted by the IEA's report and the forecast for some sectors of the solar industry to climb nearly 3,000% in the next four short years, there is simply too much upside not to be a part of it.

All you have to do is join the ranks of other investors who read the Alternative Energy Speculator.

When you do, you'll receive the detailed report, Five Solar Stocks for Turbulent Market Times. It contains everything you need to know to start profiting from these carefully selected and researched solar investments.

You'll also get access to numerous other reports about how to profit from other sectors of the alternative energy markets.

And we'll ship you a FREE copy of the book, Investing in Renewable Energy: Making Money on Green Chip Stocks, which I co-wrote with Jeff Siegel and Chris Nelder.

Don't miss out on another day of these solar profits.

Call it like you see it,

Nick

PS. I'm in New York this week taking in all the data and investment analysis being presented at the first annual Greentech Innovations conference and symposium. It's only been a day, and I'll have a full write-up for you upon my return. But a few new facts are just too good to wait for, such as:

Renewable energy has accounted for 23% of new global power capacity since 2005.
Grid-connected solar grew over 60% on average every year from 2002-2006.
Thin film solar will be manufactured for less than $1.00 per watt in 2009.
Geothermal sources will be producing over 171,000 GWh (That's GIGAwatt hours!) by 2020.

There are plenty more, and I'll get to them all next week. Ultimately, I'll be turning what I learned at the conference into renewable energy gains for my readers. And believe me, I already have a number of new plays in mind.

In the meantime, be sure to become one of the investors who gets these kinds of tips and data... week in and week out, not to mention the five stock solar report and the free book, by joining the Alternative Energy Speculator today.

California Clean Energy

There seem to be more questions than answers in the financial world right now, since so much of what we face is completely new. So this week we'll address a couple of reader comments and questions we've fielded about clean energy in California.

First off, last week I speculated that Arnold Schwarzenegger may become the Secretary of Energy in Barack Obama's cabinet. That appointment would come as a result of the California governor's policy advances towards an alternative energy economy.

The fact that California has taken the reins of national clean energy efforts - both under this governor and previous executives - has also been voiced by the Wall Street Journal, the Guardian, and by the U.S. Department of Energy.

The DoE even says the following in its California state energy profile:

California leads the Nation in electricity generation from non-hydroelectric renewable energy sources, including geothermal power, wind power, fuel wood, landfill gas, and solar power.

However, a Green Chip Review reader named George pointed out that Schwarzenegger nixed a major methanol biofuel project in 2005 in favor of less efficient ethanol, and that if California's leadership under Schwarzenegger has been exceptional, "Heaven help us at the federal level."

We at GCR agree that the country followed political pied pipers through the cornfield maze of inefficient biofuel for far too long. Barack Obama, still a senator from Illinois, needs to wake up and realize that people like George are correct in their judgment that methanol hasn't gotten its due.

But we're dealing with a world of comparisons across the financial spectrum these days... Low-yielding treasuries are attractive, as making a .5% bond yield sounds a whole lot better than a 35% market loss.

Similarly, renewable fuel portfolio standards in vanguard states like California are not perfect, but such places and policies are judged by their relative advantage.

According to the California Public Utilities Commission:

The RPS program requires electric corporations to increase procurement from eligible renewable energy resources by at least 1% of their retail sales annually, until they reach 20% by 2010.

And my colleague Chris Nelder, a California resident who is not an easy guy to impress when it comes to green policy, points out that California's multi-billion-dollar solar energy subsidies dwarf Arizona's. That's despite the fact that Arizona has a larger natural solar resource than the Golden State.

Arnold is Already on a National Scale

California's economy would be the #7 largest in the world if it were its own country.

And Silicon Valley is almost certainly going to be the kind of industrial engine for the U.S. that Detroit was in the 20th century.

Consider why Detroit is now dwindling in population and productivity. It's because of a dearth of new ideas and a dirty fossil-fuel economy that never adjusted properly to changing consumer attitudes.

That brings us to another point raised by a reader named Bill, who remarked that GCR should "get off the global warming horse."

Whatever you think of Al Gore and his crusade to spread the "inconvenient truth," California's battle against smog predates the modern debate about global warming.

CARB Cutting

California's Air Resources Board has introduced a plan to reduce greenhouse gas emissions to 1990 levels by 2020, and it's not because the Sacramento capitol is stacked with fools.

Pollution is a primary issue of public health and competitiveness in an economy that prizes both. University of Southern California research shows that asthma and other respiratory illness risk increased 89% for every 3/4 mile closer to a freeway a child lives. So Governor Schwarzenegger launched the Help California Breathe Easier campaign in 2005.

As part of a comprehensive effort, companies like Google are pushing hard for the state to move everyone into Industry 2.0.

So the CARB plan, which is backed by Gov. Schwarzenegger, aims to incorporate high-efficiency technology in new homes, places of business, and automobiles for everyone's benefit.

In early October, the Governor also signed bills establishing a Green Collar Jobs Council and another to create zero- or low-carbon communities around California.

California is also pioneering a cap-and-trade system that will allow for some variation in how individual companies move towards the GHG reduction goal. Overall, though, a net reduction each year is a must.

With all of this, Governor Schwarzenegger has to speak the language of business and of responsibility at the same time. He has also dealt with the issue across party lines and could be able to sell emissions reduction to more GOP leaders than ever before.

Silicon Valley firms may be easier to persuade into clean energy technology than Ford or GM (in whatever form they still exist come Inauguration Day), but having run a successful country-scale effort to modernize through clean energy goals means Schwarzenegger has a voice of authority on true U.S.-wide implementation.

Whether California's progress to this point has been perfect is up for debate. But you can't argue the need for experience and political maturity when it comes to creating a greener and more prosperous American economy to lead us out of recession.

We always welcome your feedback, so keep the comments coming!

Regards,

Sam Hopkins

P.S. - We're not just limited to individual states in terms of clean energy comparison. International efforts to create competitive green economies mean a plethora of listed companies around the world are profiting. Green Chip International is recommending winning stocks in London, Frankfurt... even Oslo! To learn more, check out GCI today.