Sunday, March 16, 2008

Posted in response... Arguments for buying Solar.

My many cents (I think this might go on long):

I see you're in Massachussetts. There's an excellent tradition of Solar in that state, I believe it's the home of both Evergreen Solar and Spire Solar.

Here's the DSIRE page for your state on incentives available in your state:

The Federal incentive program is also available till the end of this year.

A professional installer would be able to calculate all of the incentives and give you totals.

Go get some numbers, and see what kind of payback timeframe you're looking at. Remember, the standard warranty timeframe for silicon-based panels is typically 25-30 years.

Buy now, or buy later?

If you want "cheaper, more efficient technology" then you're pretty much out of luck. You'll have to wait for at least a year. It's all pretty expensive(*)(**).

An Argument for buying now:

If the shit hits the fan, and for whatever reason Energy prices (continue to) spike in the next couple of years***, or if power simply becomes unavailable, then you'll be served by having bought now. However, prices of equipment and installation are undoubtedly high. If you have the money, then it might be worth the immediate investment. It depends on what you see happening in the next few years as far as the World Economy is concerned.

An Argument for buying later:

Industry "shorts" argue that there will be a "glut" of Silicon and Silicon-based panels on the market in the next year or two. They argue that the manufacturing capability is scaling up way too fast, and that it will outstrip demand, reduce prices of the final product, and cause the industry to bust. If this happens, it will be within two years as the world's polysilicon supply increases manyfold as many projects currently in development begin producing. Personally, I believe the shorts are incorrect (and very often shills for the Fossil / Nuclear Industries). The company LDK Solar, for instance, has just announced that they are almost completely sold out of product for '08 and '09, and they have numerous long-term contracts stretching out over the next 10 years with European and Asian trading partners. In any case, any price reduction will serve to boost demand until a balance is achieved, and considering the Economy's thirst for Energy, I don't believe that prices are going to collapse for many years. This isn't the 70's again, Fossil Energy has few options for new development with which to increase supply.

"Shorts" also argue that thin-film panels will take over the market, and blow away today's Silicon Technology in efficiency and price. This may be, but I have my doubts. For one, thin films are less efficient per unit area than Silicon-based Panels, and they have their own "feedstock" constraints. Some use Cadmium Telluride, where Cadmium is toxic, and Tellurium is one of the rarest elements on Earth, and others use Indium, which is not incredibly rare, but is not common. Another factor between thin films, and Silicon-based panels would be durability / working lifespan, and I don't think we have the numbers yet.

Positive arguments for buying later would also include increased Federal Subsidies under a Democratic President / Congress, as well as new Incentives that will be forthcoming from Lenders (we've seen a couple examples of banks seeing value in lending for these projects, and I think we'll see more coming).

An Argument for buying Solar stock:

Maybe it makes sense to wait before Installing at home, but there are Installations happening at an increasing rate all over the World. It is my strongest "Belief" that getting into certain stocks over the next year is truly getting in on the Ground Floor of an Industry Boom. In truth, these stocks have been beat up since the end of last year, and I call that a good thing for anybody who gets in while they're out of favor. The risk, of course, is that the World Economy will collapse, taking with it the Stock Markets. If that happens, then you had better have a Home Energy Installation, firearms, and a stash of food. Otherwise, it seems to me fair to say that as the cost of all Energy Increases (in US Dollars, at least), combined with the economies of scale that we're seeing develop in Solar Manufacturing over the last 2 years (and the rest of '08), Public Companies in this Industry will be increasingly recognized by American Investors as we go into '09 and beyond, and owning some stock during a period of growth could eventually offset some of the increases that you'll see in your own power bills.

Anywhoo, just a couple of thoughts.

* There has been a shortage of Polysilicon for use in Silicon-based panels, and in the next year many new plants will be up and running around the world.

** It's possible that you could get some kind of solar water-heating system for a bit cheaper than PV.

*** Possibly due to further devaluation of the US Dollar?

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Anonymous said...

LDK doesn't sell to the end market, it's just a supplier to solar manufacturers, so the fact that they are sold is simply becasue the manufacturers are expansing like crazy and buying up raw materials as fast as they can at absurd prices.

D Pickard said...

Sure thing. There hasn't yet been an indication that those modulemakers are finding themselves unable to sell their product, and with oil and coal both increasing in price, it's likely that sales will remain strong.