Why I’m Swoon For Solar

Written by Christopher Nash.

 

In this article, I will briefly discuss the Paris Agreement, its possible and probable effect on the Clean Energy Industry, with emphasis on Solar and I will end with a possible business and investment opportunity, which I believe will HIT IT BIG (opinion of course). Remember, energy is usually a long term investment.

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Leaders of 193 Nations gathered in Paris this December in an unprecedented global effort to curb Global Warming.


The Paris Agreement : A Cure or Treatment of Global Warming?

Without the efforts of nearly 200 nations and a monumental global effort, failure to set a cap could result in superdroughts, deadlier heat waves, mass extinctions of plants and animals, megafloods and rising seas that could wipe some island countries off the map.  Within centuries, it could also mean a different world, and possibly the extinction of mankind, at least on planet Earth.  Skeptics will tell you that the agreement was motivated politically and economically, which is probable and will become increasingly clear in the future, but the bottomline is that the agreement marks an important date in history, and if successful, it will be significant in preserving the world we live in.

To reach the goal of the Paris Agreement, field experts say that the world will will need to reach zero net carbon emissions sometime between about 2030 and 2050. This means the elimination and consumption of fossil fuels entirely from Earth.  Any idiot can see what this means for the oil industry; they’re screwed for lack of a better word.  Folks, I think its now time to move on and speak on my real thoughts on this day.

The fact is this post is not about the Paris Agreement, but the future of the Energy Industry.  As I sit in a Princeton coffee shop, I find myself pondering – what does this mean for the Energy Industry, with a primary emphasis on Solar.  We live in a world with strong political and economic correlation; what I mean by this is novel economic policy often presents new business opportunity.  Since December 12 of this year, it would probably prove difficult to wipe the smiles off the faces of the Clean Energy Movement advocates.  And it would prove impossible to achieve the same with C-level Executives and employees of large Clean Energy Companies.


The Paris Agreement & It’s Impact on The Future of Clean Energy

The fact remains, According to The Solar Foundation, as of Q2 2015, there are now nearly 174,000 solar workers in the United States, more than a 20% increase over employment totals in 2013. These workers are employed at 6,100 businesses in every state. The increasing value of projects has injected life into the U.S. economy as well. In 2013, solar installations were valued at $13.7 billion, compared to $11.5 billion in 2012 and $8.6 billion in 2011.

 

Solar-Industry-Prices-2014Courtesy of seia.org; we see that as solar installations increase, price per installation drops. Following simple economic principles this can only mean one thing – growth.

 

In recent years, many smaller players have entered the Solar Industry. However, congressional action, the upcoming expiration and reduction of the Investment Tax Credit is expected to lead to a 57% decline of installed solar capacity in 2017.  Up until now this article has been overwhelmingly positive, but guys, thats about to change.  Sure the smaller firms have done well for a few years, but the fact is many of these companies are now bleeding out.  Bigger firms of larger market caps, and economies of scale dominate the industry and are driving out the smaller firms.  I will not name the firms involved (neither large or small players); this can easily be achieved through a lot of due diligence and a little bit of Google.  I hate to promote websites, but guys, Google is a great tool for learning.

As growth of Solar Power continues to progress within the United States, in the near future we will see exponential growth in developing nations, such as India and Africa, and continents within the Southern Hemisphere, where many people live without reliable power and electricity on a daily basis.


My Advice

A few days ago, I was speaking to my friend, a successful businessman whom I know from my Wall Street days, who informed me of a potential successful business opportunity, which can and and he believes it will more likely than not come to fruition in the near future.  What he told me was to stick to commodities, especially silver, aluminum, and other metals used in conduction – necessities for any firm involved in the Solar industry.  Other commodities used in the production of thin-film photovoltaic cells include copper, indium, gallium, and selenium.

Anyways, a smart move for any investor would be to buy up large quantities of these commodities if you have the funds.  The great thing about commodities are that they are liquid and will never reach a value of zero.

Now this next bit is very important, so don’t leave the site yet!  Wait for these smaller companies who provide Solar Energy Solutions to fall out and declare for bankruptcy; when this point is reached, anybody can buy up these commodities at very low cost.  Wait, wait, and wait!  

Another great move would be to buy up shares in the larger Clean Energy firms who provide Solar Energy Solutions.  It is more probable that the big players will buy up the assets of the smaller firms who fail.  The large firms don’t want the businesses, they want their assets – the commodities used in production, functionality, and everyday use of solar energy.  When you start to see the big guys buying up the assets of the smaller guys, in regards to the shares of the larger companies – buy, buy, buy!

This concludes my article and it is important for me to convey that the last few paragraphs – the investment strategy mentioned here is of personal opinion.  Happy speculating, investing, and happy holidays to you all!  Look for my next post coming soon!

 

 

 

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