Horrible article title, but it was too hard to resist with shares of Solarfun Power Holdings Co. (SOLF) down more than 8% today. Since the IPO and including today’s fall, shares of SOLF are up 43% since the IPO last December. However today, reality is kicking in as investors grow weary of Solar energy stocks. There wasn’t any breaking news for SOLF to fall today, it just fell as naturally as the sun setting at the end of the day.
Herb Greenberg (one of my personal hero’s) wrote a great article last week titled How Chinese solar stocks may burn investors. Herb pointed out – "consider that much of that growth has been tied to sales in Germany, the largest market for solar energy, where purchases for large fields of solar panels have been subsidized by the government." If only our government would get onboard, nah, let’s just keep burning oil and coal, why switch now?
Despite the lure of Solar energy and all of their wonderful stocks, let’s consider that for them to really move, we need to see the results in our own country. Evergreen Solar (ESLR) is a great company doing incredible things, but Wall Street doesn’t care because they want to see profits.
Patrick Moore, co-founder of Greenpeace said recently "subsidies for solar are taking money away from geothermal, nuclear and hydro" power development. Moore himself has $20,000 invested in solar panels produces which only produce about $100 worth of energy. On the other hand, $20,000 invested in a ground source heat pump – known as geothermal energy – produces about $1,300 worth of energy.
Believe me, I want solar power to take off as much as the next guy, it sounds and feels like such a great idea. But "sounding" and "feeling" don’t always make you money – now do they? You can make a buck or two playing the highs and lows of solar companies, but if you must invest in energy, why not put it into companies that get the majority of America’s dollars?
Just to name a few: Exxon Mobil Corporation (XOM), Chevron Corp. (CVX), ConocoPhillips (COP), Schlumberger Limited (SLB), and Jim Cramer’s favorite Occidental Petroleum Corporation (OXY). Until I see the U.S. pass a "Solar Power" bill, I say stick with what the country loves, good ol fashion oil that is, black gold, Texas tea…(can you hear the theme song now?)
Frank Lara Jr.
Frank Lara Jr. can be reached at [email protected]; he does not own securities in the companies he covers.
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