Wednesday, January 13, 2010

Solar Stock Review and Future Prospects


The solar segment has garnered considerable interest. To help investors chart solar's growth, The Green Market selected 5 equally weighted solar stocks (CSIQ, ESLR, FSLR, SPWRA and STP) and followed their progress throughout 2009.

As explained in the previous solar review, The Green Market's solar stocks outperformed the major market indices by 28 percent between January and August and 53 percent between March and August.

Canadian Solar (CSIQ) soared in 2009. For a six month period between March and August, CSIQ grew 269 percent. Between January and August of 2009 CSIQ, was up almost 200 percent. From August 11 until the end of December CSIQ, increased 57 percent.

The first 7 months of 2009 saw appreciable increases in the value of The Green Market's solar stock, followed by declines in all but CSIQ from August 11 to the end of December. Together all 5 of The Green Market's solar stock decreased an average of less than one percent over the last 5 months of 2009.

From the opening of the market on January 2 2009, until the markets closed on December 31 2009, CSIQ rose 370 percent and STP rose 41 percent. Over the course of 2009, FSLR lost 1 percent, SPWRA lost 36 percent and ESLR lost 54 percent. On average The Green Market's solar stock portfolio appreciated 64 percent in 2009.

Since the start of the New Year, all but one of The Green Market's solar stock have increased in value, averaging an increase of 6 percent. First Solar (FSLR) is the only Green Market solar stock which has declined since the start of 2010. As the largest and lowest priced solar producer in the world it continues to be a good bet for 2010. FSLR is extremely profitable and they continue to increase the efficiency of their product by reducing the cost per watt.

As predicted by The Green Market, some solar companies did not survive 2009. Last summer Applied Solar Inc.(APSO.OB) a "next-generation solar energy company" sought bankruptcy protection as part of a loan agreement with its largest investor.

The Spanish and German governments are cutting back on their generous subsidies. With subsidies being cut and an over supply of solar cells, this is a difficult period for many in the solar sector. On the upside, price declines have been less than expected and the longer term horizon looks good.

The position of most in the solar sector could be radically enhanced through government legislation or regulation. Although government action would advance solar, as we saw on Tuesday, oil and metal are amongst the factors that can adversely impact solar stock prices.

Like the Internet ten years ago, solar is on the cusp of tremendous growth, but many investors are waiting for decisions about carbon that will determine solar's trajectory. However, investors who take long positions with solar industry leaders will benefit the environment and enjoy returns that outperform the market.
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Next: Stock Review and Future Prospects: Wind, Geothermal, Energy Efficient (Smart) Grid, Energy Efficient Lighting

Solar Stock Comparative Market Review 08.11.09
Solar Stock Review and Future Prospects 08.09.09
Solar Stock: Recovery and Comparative Market Performance 04.30.09
Solar is Under-Performing Markets at Pivotal Rally Points 03.18.09
Solar Update: Ongoing Volatility 03.12.09
Solar Sector Analysis 03.06.09
Solar Stock Review: Cost vs Efficiency 03.04.09
Recession, Recovery and Renewables 02.10.09
First Solar (FSLR) 01.05.09
Solar Stock Review 01.04.09
Solar Stock Picks: Timing 01.02.09
Investing for a Sustainable Recovery 08.04.09
Making Sense of All the Economic Data 07.28.09
Sustainable Recovery 07.27.09
Time to Invest in Green 12.30.08
Solar Energy and the Credit Crisis 10.27.08

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