Solar Investments and You

Solar Investments and You

by Deb Powers

 In my daily reNewsable posts I often link to business news - news about the green energy market and investing in solar energy and other forms of renewable energy. Now, I love you guys dearly, but I'm not tossing out the stock market stories in the hopes of making you rich - though if you find a real deal and make a killing in the green energy market because of something you found in reNewsable, do think of me.

The  real reason that I link to so many articles about the green energy market and how those stocks are doing is that, like it or not, renewable energy forms - wind power, hydroelectric power, solar energy - will only become viable alternatives to coal-fueled power plants when it is profitable to create, build and distribute electricity generated by alternative, renewable energy. And that time is coming, but isn't quite here yet. A great  renewable energy article on MSNBC.com - reprinted from Business Week, talks about some of the challenges that solar energy stocks and investments have faced over the past year. It's a great read for someone who wants to understand why - with all these funds announced in the stimulus package in the US and all sorts of similar energy packages around the world - solar energy stocks are losing value and solar energy companies seem to be floundering.

Why Renewable Energy Stocks are losing value

In a nutshell, there are several factors that are driving down the price of solar energy stocks and some of them are actually good news. For instance, among the highest grossing stocks in the renewable energy market used to be those for companies that make polysilicon, a prime component in making solar panels. Those companies are struggling right now, partly because there's a glut of polysilicon on the market so prices have been driven down. Again, that's a mixed blessing - the glut is due partly because demand has decreased because there are fewer projects being started, but it's also due in part to better technology that makes it cheaper to make. And when the prices for one of the major components of solar panels drop, the prices of solar panels drop - and that's good news for you and anyone else who wants to mount solar panels. It's also good news for you if you buy your energy from a company that is using solar panels.

In fact, according to Robin Cheng, an industry financial analyst, producing solar energy could be cost-competitive with conventional energy production as early as next year in parts of the world - including the US - that get regular, steady sunshine, and by 2014 in other parts of the world. Until then, she says, the solar industry is dependent on government incentives. And those government incentives are actually proving to be a stumbling block for solar energy projects right now.

The issue there is that the administration has announced that there are and will be funds and incentives available for qualifying projects... but they've been slow to announce precisely what makes a project qualify for those loan guarantees. That means that investors who are all set to pour money into building and developing solar energy as a viable alternative to conventional electricity are standing there holding on to their money until they know what the rules are.

Reaping the benefits of renewable energy incentives

At the same time, the tax incentives for small solar installations - like the ones you might put on your roof - are in place and continuing, and many local authorities are offering even more incentives. That means that it's a great time to be looking at installing residential solar. As an added bonus, residential solar isn't dependent on the country overhauling the transmission lines to account for new wind, solar and other energy sources. It will make electricity for your home without worry about the electricity getting there - it's there already.

Of course, that doesn't mean that we don't need to improve our transmission lines and upgrade the energy grid. In fact, the so-called Smart Grid is almost essential if we base a significant portion of our energy production and use on variable energy sources like sun and wind. So is the development of "batteries" - storage for excess, unused solar power and wind power that can be drawn upon when conditions aren't right for drawing directly on solar and wind. There are some very interesting propositions out there for doing that, too - one of my favorites right now is a proposal to use the family car as a storage battery. Just think - park your car in a sunny spot all day, and plug it into your home energy grid when you get home at night to power your lights and television set.

Inventors and Investors - the Renewable Energy Partnership

That's just one of the little energy investment ideas out there looking for funding. For the first time in my lifetime, it's actually a GREAT time to be an inventor. After decades of hearing about conspiracies by the big energy and oil companies to quash and hide advances in renewable energy from ever seeing the light of day, we're in a time when the government is asking garage tinkerers to step up with their ideas and get funding for it. It's exciting - and not just for the proponents of clean energy. If things play out the way that they could, we will see a new generation of inventors and investors in partnerships that will change the world.