Alternative Energy Stocks

by Tom Konrad One of the most common arguments against incentives to help people buy solar panels for their homes are that they are a subsidy for the rich, paid for by everyone.  The argument goes: only the rich can buy a photovoltaic system, which, even with subsidies, costs thousands of dollars.  Why should everyone chip in to help rich people buy new toys? On the face of it, this argument is persuasive.  Why should everyone pay, if only the rich get the benefit?   Basic fairness dictates that society should only subsidize activities which create societal (rather than individual...

by Tom Konrad When I asked, Alternative Energy Stocks readers overwhelmingly wanted me to take another look at Composite Technology Corp. (OTC BB:CPTC.OB)  I've discussed CPTC several times over the last year, and consider it my most speculative pick in electricity transmission and distribution.  True to the nature of a speculative stock with no current earnings which is still trying to establish markets for its products, the stock price has been all over the map. The reader interest is doubtless due to the recent sharp decline since mid January.  I personally sold a portion of...

On Wednesday, David Strahan at The Guardian calculated some lump sums for us. A couple of years ago, when it became clear that we were running into serious supply problems with oil, one pundit after another told us that we would never have to worry about coal. After all, in the US alone, there was 250 years' worth of supply at current consumption rates. Well, that was then, and this is now. And if skyrocketing feedstock costs aren't enough to deter you from building a coal plant, maybe rising capital costs will. Is King Coal's reign looking shaky? It...

Electricity too cheap to meter.  For many renewable energy advocates, that is the holy grail… new technology which will not only solve the problem of carbon emissions, but be so transformative that we no longer have to worry about turning off the lights when we leave the room. We could argue for days about the viability of any such technology, be it cold fusion, hydrogen, or photovoltaic nanodots.  I personally have strong opinions about the likelihood of any technology to produce energy so cheaply that it would not make sense to use some mechanism...

Here is an interesting article on the Carbon Tax Blog about dropping gas usage in the US due to sustained high prices.  As I've said before, now that peaking oil supply has made gasoline supply inelastic, price will have to be set by marginal demand... we're beginning to get a look at what the demand elasticity for gasoline is. But gas prices are not dropping.  US demand may actually be elastic, but world demand is not yet showing elasticity.  In large part, this is because most emerging economies and oil producing company consumers enjoy fixed price oil, courtesy of...

Johnson Controls (NYSE:JCI) has long been one of my favorite energy efficiency picks, with an added bonus coming from their joint venture with Saft to produce batteries for hybrid and electric vehicles.  They have also shown some energy saving innovation making parts for auto interiors. Building EfficiencyEfficient buildings are much more complex than simply replacing inefficient HVAC and lighting with more efficient versions.  Quite often, the most cost effective measures come from using systems more efficiently.  As an analogy to the home, look at any list of quick tips for energy saving around...

On Sunday, TraderMark at Fund My Mutual Fund opined that the solar sector was headed for a shakeout. Well, he didn't quite opine that...he reported the major points from Greentech Media's Solar Market Outlook event. The main conclusion is that it's not only 2008 that's going to be a tough year for solar, but rather the next 3 to 4 years as the industry matures and consolidates. TraderMark argues that the solar sector will follow a boom-bust-echo path; we're currently just exiting boom times (read: incredibly rich valuations times) and the whole think is about to go bust, but...

I plan to write about a couple of the companies that readers asked about two weeks ago.  I'd like to research the ones of interest to as many readers as possible.  Let me know! polls - Take Our Poll UPDATE: I'll publish articles on CPTC.OB and PSUD.PK soon. If the stock you want to know about is not in the poll, please leave a comment here, and I'll do another round at a future date. Tom

Like Quanta Services, (#8 in this series), National Grid PLC (NYSE:NGG) allows investors to participate in the massive build out of electricity transmission and distribution infrastructure necessitated by years of neglect and the growing need to decarbonize our electric infrastructure.  See the article linked above for more detail on these two forces driving the sector. Having its origins in British electricity deregulation in the 1990s, Nation Grid is a regulated utility in Britain and the United States, and operates high pressure gas pipelines and high voltage transmission in Britain, and electricity transmission and natural gas distribution in the Northeastern...

In large part, the transition to clean energy will involve using our resources much more efficiently than we do now.  One large potential feedstock for biofuels (and arguably the only one which is truly sustainable) is our trash.  As the world economy grows, and the available stock of natural resources diminishes, society will have no choice but to use what we have more efficiently and throw less of it away. In addition to the now familiar recycling of Aluminum, glass, cardboard, paper, and plastic, yard and construction waste will find its way to cellulosic ethanol plants, and used cooking...

On Monday, Richard T. Stuebi at the Cleantech Blog gave us the heads up on a McKinsey Global Institute study on energy 'productivity' (read efficiency). MGI makes an good case for policy-makers to pay more attention to energy efficiency, and the authors outline what investment commitments would have to made in different sectors for their ideal scenario to be realized. One interesting insight - the residential sector would be near the top at 25% of investment flows. Are retail energy efficiency solutions one piece of regulation away from taking off? On Tuesday, Nick Hodge at Seeking Alpha told...

In the future, I plan to avoid doing lists of ten stocks. I've found the writing to be somewhat repetitious, and I suspect some readers feel the same way.  Look for more threes and fives. That said, there are more than enough solid companies with strong clean energy arms.  These companies are my favorite investments right now, both because I think that now is a time to play it very safe in the stock market (I'm also increasing my cash reserve), and because these companies allow me to use Cash Covered Puts. Since I do have several...

Applied Materials Solar

Peak oil is likely to have everyone re-examining their transportation options over the next few years.  Rail will likely be one of those options given special attention because rail transportation is inherently much more fuel efficient than road based transport. I first mentioned Trinity Industries (NYSE:TRN) in November as a rail transit related stock.  I didn't give it an in-depth look because rail transit is only a tiny part of its business, but investors interested in the broader rail sector will be very interested. Not only is Trinity focused on the most energy efficient form of land transport, its...

I often get questions from readers asking me what I think about this alternative energy company or that one.  Much of the time, I simply have to say "I haven't researched it."  What can I say, I'm not Jim Cramer.  Even when I do have an opinion, and the question is left in the comments (my rule is, if you want free advice, you have to be willing to share,) it's probably not researched in the depth that the person was hoping for. For all of you wondering about my take on a specific stock, please let me know...

I don't write frequently about solar stocks, especially photovoltaic (PV) manufacturers.  While the industry is almost certain to be a spectacular growth story, it's also a story that everyone already seems to know about.  Trader Mark put it well: "these stocks are too driven by retail hands."  The PV story clicks with people, and when that happens, they often buy stocks with little regard to what they are worth.  PV stocks are so psychological, we'd all do well to lie down on a couch before buying. As the IRS is unlikely to allow psychotherapy as an "investing expense," I...