Investing in Solar Stocks: What You Need to Know to Make Money in the Global Renewable Energy Market

by Berwind, Joseph

• ISBN13: 9780071608954
• ISBN10: 0071608958
• Edition: 1st
• Format: Hardcover
• Copyright: 2009-08-03
• Publisher: McGraw-Hill Education

Summary

The solar industry is heating up. In the pasttwo years alone, more than $8 billion havebeen infused into the market, and 20 companieshave gone public. The best news isthat the solar market is still in its infancy,with plenty of room to expand. With anannual growth rate of nearly 50 percent,it has the potential to eclipse all other investmentopportunities.Investing in Solar Stockssheds light onevery angle of the subject to help you enterthis booming market with knowledge andconfidence. Previously the realm of eliteinvestors, solar energy is now wide open toasset managers, institutional investors, andfund managers.From the science of solar energy to expertstrategies for building a portfolio utilizingsolar stocks, this comprehensive introductioncovers critical information about: Government policies drivingthe solar market The growth of solar energyinto a global industry Business models shapingthe industry Manufacturing supply chains Risk and volatility factors Portfolio diversificationand rebalancing The global economic collapse'seffect on the marketA veteran player in the renewable-energyinvestment world, author Joseph Berwindexplains the investment principles of buying,selling, and shorting solar stocks in easy, engaginglanguage. He also includes case studiesof solar energy companies and useful tradingstrategies from the top hedge fund investorscurrently active in the solar market.A rare bull market orbiting in today's universeof bears, solar energy holds great promise forboth long-term portfolios and short-termgain. UseInvesting in Solar Stocksto get in onone of today's few supercharged markets.

Author Biography

Joseph Berwind is the co-founder of.Alternate Energy Investing (AEI), a top market research and.financial analyst firm specializing in renewable energy.

Table of Contents

Acknowledgments	p. ix
Introduction	p. 1
From Cell to Solar Photovoltaic Energy	p. 2
An Investment Opportunity	p. 4
About This Book	p. 6
Solar Technologies: The Science behind the Stocks	p. 9
Solar Technologies: Silicon vs. Thin Film	p. 11
Manufacturing Process for Silicon-Based Solar	p. 12
Cell Manufacturing	p. 23
Using Production Methods to Pick Stocks	p. 28
Research and Development Outlook	p. 34
Monitoring the Industry	p. 41
Solar: A Global Market	p. 41
Net Metering and Feed-in Tariffs	p. 42
A Survey of Incentive Programs around the World	p. 43
Interpreting News of Incentive Program Changes	p. 53
Renewable Portfolio Standards	p. 54
U.S. Investment Tax Credit and the Implications or the American Reinvestment and Recovery Act	p. 65
Comparative Business Models: PV Economics and Emerging Markets	p. 69
The Solar System at a Glance	p. 70
Vertical Integration in the Solar PV Industry	p. 71
Position in Supply Chain and Extent of Vertical Integration	p. 72
Industry Analysis of the Solar Supply Chain	p. 73
Solarfun and Suntech Power: Comparison of Integration Strategies	p. 78
Strategic Partnerships in the PV Industry	p. 83
Long-Term Contracts for Solar Modules and Capacity Expansions	p. 85
The Economics of Solar PV	p. 87
Financing Solar PV Projects in the United States	p. 94
Emerging Business Models	p. 98
Solar Stock Valuation	p. 107
Ratio-Based Analysis	p. 107
Valuation with M&A Deals as Reference	p. 113
Discounted Cash Flow Valuation	p. 115
Earnings Drivers	p. 121
ROIC/ROER Valuation	p. 127
Investment Prospects for Solar PV Stocks	p. 131
Volatility and Risk	p. 135
Capacity Expansions and Production Growth	p. 136
Raw Material Supply Contracts	p. 136
Revenue Visibility	p. 137
News on Government Policies	p. 138
News on Ethics/Corporate Governance Issues	p. 139
A Reputable Investor Increasing Stake/Insider Ownership	p. 139
Approaching Prepayment Deadlines	p. 140
Volatility Analysis and Classification of Catalysts: Examples	p. 140
Measuring Volatility	p. 148
Put-to-Call Open Interest Ratio	p. 148
The Economics of Fabrication Expansion	p. 149
The Future of Fab Equipment Spending	p. 161
Pulling the Trigger	p. 165
Risk-Reward Calculus for Solar PV Stocks	p. 165
Correlation and Beta of Solar PV Stocks with Oil and Natural Gas Indices	p. 170
Coefficient of Variation of Solar Stocks and Standard Deviation of the Indices	p. 174
Differentiation for the Long-Term Investor	p. 177
Trigger for the Long-Term Investor	p. 179
First Solar from a Long-Term Perspective	p. 180
Suntech Power from a Long-Term Perspective	p. 183
Knowing When to Take Action	p. 185
To Buy, Sell, or Short	p. 186
Investing for the Long Run	p. 193
Identifying Risks	p. 194
Research and Development	p. 196
Geographic Diversification	p. 198
Supply Visibility	p. 198
Supplier Concentration	p. 200
Demand Visibility	p. 201
Customer Concentration	p. 202
Track Record in Achieving Scale	p. 203
Management Quality and Corporate Governance	p. 204
Evergreen Solar-the Long-Term View	p. 206
Company Examples for a Better Understanding	p. 210
Investing on the Basis of Revenue and Earnings Growth	p. 218
Strategic Risks	p. 219
Macrolevel Risks	p. 219
Operational Risks	p. 220
Product-Related Risks	p. 221
Cost Reduction in the Industry	p. 222
Exchange Rate Impact	p. 227
Rebalancing a Solar Portfolio	p. 235
Reasons for Rebalancing a Solar Portfolio	p. 236
Ratio-Based Analysis	p. 239
Company Illustrations	p. 246
Differentiated Companies in the Solar PV Sector	p. 249
Principles for Managing a Solar Portfolio	p. 252
The Solar Storm	p. 257
The Storm Becomes Tropical: Subsidies Cut	p. 264
Hurricanes, Tornadoes, and the Credit Crisis	p. 266
October 2008: The Eye Passes Overhead	p. 267
Creative Destruction	p. 269
U.S. Utility Market	p. 278
Emergence of Solar Master Limited Partnerships	p. 281
After the Storm: Solar PV Business Models of the Future	p. 282
Index	p. 285
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