Don't Bite The Hand That Feeds You

[TheInvisibleHand ™]

MY thoughts SOLR, good for the short term, but could be really great if you take a longer approach as well. Wouldn't it be nice to be holding if it hit 30-50. Remember this is a relatively new ipo.


The U.S. Senate on Tuesday [Sept. 23] approved about $18 billion of renewable-energy tax credits after repeated failed attempts to do so this year.

The 93-2 vote cleared a major hurdle for extending a set of tax credits for businesses and residents investing in renewable energy, from building and operating power plants to installing small wind turbines on residential properties.

Solar, wind and other renewable-energy investors and executives have been anxiously waiting on Congress to extend a set of investment-tax credits that would offset 30 percent of the cost of a solar project.

"We know with certainty that the extension of these credits sends out a green ripple effect: solar projects on hold can now move forward, America creates new green-collar jobs with over 214,000 in California alone, and businesses and homeowners can count on lower energy bills in a time of economic hardship," said Barry Cinnamon, CEO of Akeena Solar (AKNS Quote - Cramer on AKNS - Stock Picks), in a statement.

Read the full version of Green Energy Sector Gets Boost From Senate.

Solar Energy: Can You Afford It? (Video, Oct. 1)

Julia Hamm of the Solar Electric Power Association tells Debra Borchardt that solar is striving to become more affordable for the residential market.

To watch the full video, click the player below:
Solar Energy: Can You Afford It?


From Solar's Outlook Gets a Bit Sunnier:

The key industry players badly need to assure investors that they will not simply be a flash in the pan. The House still needs to sign off on the bill as well. It is also worth noting that the $18 billion package is completely offset by the reduction in benefits to the oil and gas industry.

Shares in the group have soared and plunged, depending on broader sentiment, as these stocks carry very high betas. Yet institutions have largely placed their bets on First Solar (FSLR Quote - Cramer on FSLR - Stock Picks), which is the only stock in the group closer to its 52-week high than its 52-week low, and which is valued at a lush 13.3 times projected 2008 sales on an enterprise value basis.

Notably... the China-based solar plays... sport the lowest valuations, in large part because of the absolute decimation of the broader Chinese market.

But investors need to stay focused on the fact that industry growth can stay above 25% for the next three to five years, as the legislative backdrop is likely to become yet more favorable. Both presidential candidates have expressed a great deal of support for an expansion in credits and subsidies for alternative energy.

Read the full version of Solar's Outlook Gets a Bit Sunnier (RealMoney access required).

From Despite Financial Crisis, Clean Energy Firms Seek Capital:

Until it filed for bankruptcy protection last week, Lehman [Brothers] had been a popular underwriter for companies raising funds, by issuing shares or borrowing money. The investment bank's collapse prompted statements from companies such as SunPower (SPWR Quote - Cramer on SPWR - Stock Picks) Evergreen Solar (ESLR Quote - Cramer on ESLR - Stock Picks) explaining the financial impact of Lehman's fall.

Investors said the market's turmoil will likely suppress any appetite for initial public offerings for now. Solar- and wind-energy companies also will likely find it difficult to raise money in the near future to build power plants or factories.

Some companies don't want to wait until the markets stabilize. LDK Solar (LDK Quote - Cramer on LDK - Stock Picks), for example, announced last week that it intended to raise $200 million.

Read the full version of Despite Financial Crisis, Clean Energy Firms Seek Capital. (Related: On Aug. 29, the Associated Press reported that China-based LDK Solar projected its 2009 revenue to be between $2.8 billion and $3 billion.)

From For Solar Stocks, Cash Flow Is King:

Many of the publicly traded solar companies have built up substantial debt already, making banks even more reluctant to extend them new loans. SunPower, for example, had $225 million in long-term debt at the end of the June quarter, while Evergreen had $108 million.

Maybe solar companies can raise capital through the debt market, relying on convertible bonds to fuel their growth. But as with stock offerings, one has to wonder how exactly this is going to work.

We're down to two independent bulge-bracket firms [Goldman Sachs (GS Quote - Cramer on GS - Stock Picks) and Morgan Stanley (MS Quote - Cramer on MS - Stock Picks)] -- and they may not be as bulletproof as we thought. They also face the daunting task of peddling bonds to a market that is suspicious of even the top-rated companies, let alone smaller, younger companies with a lot of risk built into their business model. And that is what we have with solar.

Because for all the promise of growth facing solar energy, it has an awful lot of threats.

Read the full version of For Solar Stocks, Cash Flow Is King (RealMoney access required).

Sliding Oil Won't Sink Solar (Video, Sept. 19)

Falling oil prices are dragging down solar stocks, but Tom Zarella, CEO of GT Solar (SOLR Quote - Cramer on SOLR - Stock Picks), says the alternative energy business will weather the storm.

To watch the video, click the player below:




Plus, don't miss this recent solar-focused video on TheStreet.com TV: China Watch Mail Bag: Solar Sense (Sept. 20: One viewer is particularly interested in Solarfun Power (SOLF Quote - Cramer on SOLF - Stock Picks), China Sunergy (CSUN Quote - Cramer on CSUN - Stock Picks) and Yingli Green Sunergy (YGE Quote - Cramer on YGE - Stock Picks). Staff writer Chuck Marvin gives his pick of the litter, plus some other solar picks he likes a little bit more.)

From Analysts Pick 2009's Solar Winners: Suntech:

"The year 2009 could start to show signs of bifurcation between long-term winners and the companies with a 'me-too' strategy in the solar sector," wrote Lazard Capital Markets analyst Sanjay Shrestha of Lazard Capital Markets in a research note Friday [Sept. 5].

Jeff Osborne, an analyst at Thomas Weisel Parners, has already aired his pick of winners.

"We see Suntech (STP Quote - Cramer on STP - Stock Picks) (high volume, low cost), SunPower (high performance and vertical integration), and First Solar (low cost, high volume) weathering the storm well," Osborne wrote in a research note.

Read the full version of Analysts Pick 2009's Solar Winners: Suntech.

From Thin-Film Solar Set to Take Market Share:

"The thin-film [photovoltaics] sector is going to make a major impact on the overall growth of the PV industry in the next five years," wrote authors Sorin Grama and Travis Bradford, both of the Prometheus Institute. "It will change the economics to customers, trigger a more competitive landscape for all solar-energy technologies and force capital markets to assess and adapt yet again to a changing solar landscape."

Read the full version of Thin-Film Solar Set to Take Market Share.
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