Solar Energy

Why Investing in Solar Energy Is Attracting the Big Boys

investing in solar energy

Besides its environmental advantages, solar power has always had one great benefit: It's hyper local. Solar panels make it possible to generate electricity on-site, precisely where it's needed. Like a portable generator powered by the sun, solar energy promises power wherever the sun shines.

Has Solar Power Finally Arrived?

Solar panel

Solar power has three major benefits: It's renewable, it's great for the environment, and it can be produced right here at home.

There has always been one big problem with solar, however - the price. For years now, its high cost has always been the biggest weapon in every critic's arsenal.

But a study released last week suggests this objection is about to fall by the wayside for good.

Here's what it means for the energy sector, and for investors.

Energy Investing: This "Secret Ingredient" Generates Solar Power at Night

As solar power enthusiasts know all too well, renewable energy has the same problem that the "normal" generation of electricity does: how to store all of the energy produced so that it can be used when it's needed.

For solar power, that means even at night.

To date, this conversation has always centered around discovering new battery technologies.

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Russia: The Greatest Threat to the Energy Markets

There's an old saying, "The more things change, the more they stay the same."
And modern Russia a perfect example of this saying. And this move to the past autocratic methods is creating a very unstable future for the energy markets.
Dr. Moors explains the warning signs in Moscow that are making energy traders start to worry.
To find out what's happening and what it means to you, read on...

Investing in Clean Energy Stocks Just Got More Risky

Despite its promising future, clean energy stocks have proved to be an investing minefield.

Even China-based clean energy stocks are no longer a safe haven. Yesterday (Monday) Suntech Power Holdings Co. Ltd. (NYSE ADR: STP) defaulted on its debt.

Heavy losses caused by plummeting prices for solar panels - which fell 73% from 2010 to 2012 - left Suntech unable to make the payment on a $541 million bond that was due Friday.

The news caused Suntech stock, already down 80% over the past year, to slip another 10%.

While numerous U.S. renewable energy companies have faltered, most notably the 2011 bankruptcy of solar panel maker Solyndra, Suntech is the first Chinese clean energy company that could go under.

What's new is a reluctance on the part of the Chinese government to keep pouring subsidies into money-losing companies.

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The Path to Energy Independence is More Rocky Than It Seems

You might have seen yesterday's headline in the Wall Street Journal: "U.S. Redraws World Oil Map."

As the article explains, U.S. oil production is now on pace to surpass Saudi Arabia by 2020. This would make the United States world's largest oil producer. We're already the second-largest natural gas producer, according to 2010 EIA estimates.

It's all thanks to the U.S. shale boom that has unlocked billions of barrels of oil and trillions of feet of natural gas from the Appalachian Mountains to the Pacific Coast, from the Bakken in North Dakota to the shale fields of southern Texas.

But all of this fracking has caused some serious economic and environmental problems.

And while I greatly advocate increased drilling and domestic production, we still must address a wide-range of problems now plaguing the shale oil and gas sectors.

After all - with apologies to Voltaire and Spiderman - with such great fortune comes greater responsibility.

That's why I am in the third day of what has become a very interesting conference here in Pittsburgh. It was convened to set the agenda moving forward to deal with the almost invisible aspects of shale oil and gas drilling.

In fact, for the first time, the conference's primary focus will be on the negatives caused by the drilling.

We also have questions surrounding the amount of water required to frack these formations (the process needs a lot of water to break open rock and release hydrocarbons), as well as the ongoing public health fears from the chemicals used.

Now, we are seeing parallel economic problems as well.

In the Marcellus basin, researchers are now recording some of these shortcomings and placing them in four basic categories.

The real concern is that these four problems - in infrastructure, labor, local inflation, and the environment - will remain well after the drilling (and the revenue) has moved on.

So before you decide to declare "energy independence", take a look at some of the downside that may come along with it.



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Hydrokinetic Power is the Next Wave in Cheap Energy

In an era of cheap capital, emerging technology companies could provide investors the biggest bang for the buck we've seen in years.

The key is finding a market that already has billions of dollars in pent up demand - like cheap energy.

Of all the cheap alternatives available to us today, I'm most excited by hydrokinetic power systems for the simple reason that the oceans contain enough energy to potentially support more than 50% of US demand alone, according to the US Department of Energy.

In case you are not familiar with the term, hydrokinetic systems produce power from the water's kinetic energy. It's quite literally power from the motion in the ocean.

Critics charge there are limits involved because the technology we need to make, transmit and store wave-based energy is primitive and prohibitively expensive.

And they're right... it is, or at least has been to date.

That's why despite years of effort and billions of dollars in government-sponsored financing, there are a mere 5 megawatts of wave-generated energy being created worldwide.

According to Forbes Magazine, that's only enough to light 4,000 U.S. homes.

Yet studies estimate that two-thirds of the world's economically feasible hydropower has yet to be exploited. Perhaps not surprisingly, much of this untapped energy is concentrated in South America, Asia and Africa.

That's my kind of opportunity - but it will require a sea change in our thinking (pun absolutely intended).

The Rising Tide in Hydrokinetic Power

That's because traditional "alternative" power choices tend to evolve in terms of how applications like solar, hydro, thermal and gas production ties into the grid. As such, they're dependent on environmental variables that come and go.

On the other hand, hydrokinetic systems really are the grid. By placing turbines, bobbers and impellers into large bodies of water, they become part of the very system they're tapping into.

And it's a whopper of a system.

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An Unlikely New Supporter for Alternative Energy

During a biofuels conference at Mississippi State University last week, Navy Secretary Ray Mabus announced that his branch would be leading the charge to lessen the U.S. Department of Defense's (DOD) dependence on fossil fuels.

This involves a rather large chunk of traditional fuel usage.

On average, the federal government consumes about 2% of the fossil fuels used in the United States - and the DOD accounts for about 90% of that.

With the Obama administration emphasizing a move to alternative and renewable fuel sources, Mabus is signaling that the military is on board - sort of.

The Trouble with Foreign Oil

As a former governor of Mississippi and ambassador to Saudi Arabia, Secretary Mabus knows something about the position of oil in American foreign policy.

He noted during the conference that, for every $1 rise in the cost of crude oil, the Navy has to come up with at least $32 million.

So when the Libyan crisis hit earlier this year, and oil spiked $30 a barrel, that translated into almost $1 billion of additional costs to the Navy. It's no wonder, then, that Mabus is committed to meeting 50% of the Navy's onshore and fleet fuel needs with non-fossil sources by 2020.

Additionally, in what is now mantra from both sides of the political aisle, reliance on foreign oil sources presents a national security problem.

"When we did an examination of the vulnerabilities of the Navy and Marine Corps, fuel rose to the top of the list pretty fast," Mabus said. "We simply buy too much fossil fuel from actual and potentially volatile places. We would never allow some of these countries we buy fuel from to build our ships, our aircraft, our ground vehicles - but because we depend on them for fuel, we give them a say in whether our ships sail, our aircraft fly, our ground vehicles operate."

The push seems serious enough, and it does reflect similar statements coming from other branches of the military.

But questions remain: What are the alternative sources? How much volume can each genuinely give to the effort? And what are the possible drawbacks of such alternatives?

Biofuels to the Rescue

From the Navy's perspective, biofuels have shown some serious promise.

In certain theaters of operation, bio additives are already in use for both jet fuel and lighter vessel options. And the initial results have been quite encouraging.

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Looming Loss of Federal Incentives Darkens Future of Solar Power Stocks

The reduction or elimination of several federal energy subsidy programs later this year could further dim prospects for solar power stocks - bad news for a sector already in a months-long slump.

The goal of the programs, which include loan guarantees and grants, was to support the early stage growth of renewable energy companies until they became viable enough to attract conventional investors.

But several of the federal programs created as part of the 2009 stimulus package have expiration dates that assumed the economic woes of the recession would have eased by now.

Instead you have a solar power industry worried about what happens after the programs begin to expire - the first as soon as Sept. 30.

"Is the solar industry going to die if we lose these programs? No, but we're going to stall," Roger Efird, managing director of Suntech America, a subsidiary of Suntech Power Holdings Co. Ltd. (NYSE ADR: STP) told USA Today.

Helped by such programs, the solar industry grew 67% last year, but could see that growth flatten as cash-strapped governments both in the United States and Europe begin to cut back.



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China Traffic Jam Just a Brief Bottleneck on the Road to Growth

Besides recently being crowned the world's second-largest economy, China now has the dubious distinction of spawning the world's longest traffic jam. And it's all directly attributable to China's voracious appetite for energy and automobiles.

A line of cars and trucks 60 miles long (100 kilometers) has snarled the road along the Beijing-Tibet 110 Expressway for the past nine days.

The bumper-to-bumper gridlock, which finally began to ease yesterday (Wednesday), was created by a surge in trucks carrying coal from the province of Inner Mongolia to the suburbs of Beijing, where power plants continue to suck up and incinerate millions of tons of the black rock.

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