Although the solar industry does not live and die by a company called Solyndra, it has become the rallying cry for every anti-solar politician in Washington that continues to criticize the technology as either too expensive or too young to be taken seriously.
But the fact is solar is one of the fastest growing industries in the world. It is, in fact, the fastest growing industry in the United States.
Production and installation costs have been falling dramatically over the past few years, and it’s actually cheaper than coal, natural gas and nuclear in some parts of the world, including most of Africa, most of India and most island states and territories, including Hawaii.
No, there’s no problem with solar. And rest assured, Solyndra does not accurately represent the state of the industry. It is, however, a shining example of how the government continues to screw the pooch – and taxpayers.
Initially buddied up to the Bush administration, then facilitated through the Obama administration, Solyndra was a company that had a great technology that was of zero use against China’s dominance in this industry.
Even mediocre analysts that follow the solar sector knew this. But because this became more about chest-pounding than anything else, the folks at the top ignored red flags and warnings, and they doubled-down.
The end result was a bankrupt solar company and ammunition for naysayers and partisan slaves to discredit the solar industry. An industry, by the way, that currently employs more than 100,000 Americans and has helped strengthen our energy economy.
No, Solyndra is not an accurate representation of the value of the solar industry. It is merely proof that government meddling will never win against China’s cost advantage.
99% of Solar Stocks are Worthless
Don’t get me wrong. The solar industry continues to grow by leaps and bounds.
Even as Europe continues to reduce solar subsidies, India, China, Japan and Saudi Arabia are more than making up for any shortfalls with some very aggressive government support.
But I wouldn’t touch 99% of the solar stocks out there right now.
Although Chinese solar companies continue to dominate, the continuation of a supply glut has demolished most of those stocks. And while First Solar (NASDAQ: FSLR) impressed last week, thanks to its ability to unload some pretty major solar projects, I’m not confident this stock has much else to offer this fiscal year.
Quite frankly, there’s really only one solar stock that’s worth anything right now, and that’s not really even a “solar” stock. It’s a tech play that’s been able to capitalize on solar development by licensing a very specific technology that can actually cut the cost of solar production in half and increase power output at the same time.
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Your Cut of $1.3 Trillion
It’s no secret that shale oil is what’s going to help keep this world moving as we go forward.
The downside, however, is that shale operations don’t go up like shopping malls. In fact, in Argentina, it has been reported that it will likely take five to ten years to put its shale potential (the third largest in the world) into production. In the meantime, producers are looking to squeeze more out of mature fields to cover the difference.
YPF, the country’s largest energy player, has recently announced its plans to invest $35 billion to keep its mature fields producing with the latest in enhanced oil recovery operations. That ain’t chump change, my friends. But it is an example of the kind of scratch these guys are ponying up to make sure those older fields keep earning.
So of course, we’re looking to wet our beaks on this one, too.
Truth is, there’s so much opportunity in enhanced oil recovery (EOR) right now, I don’t know a single energy analyst that doesn’t have at least some skin in this game. And why not?
According to market analysts at SBI Energy, EOR technology was valued at more than $126 billion last year. And the market for global EOR production is expected to reach $1.3 trillion by 2015. That’s less than two years away!
So yes, I’m all over EOR right now. And interestingly, my favorite EOR play got a nice jolt last week after it announced the results from a one-year field test of some of its projects in Alberta and Saskatchewan.
Utilizing one of the most advanced EOR technologies available today, this company’s system delivered an average 2.56% increase in incremental barrels, with the best results showing a 7.42% increase at one of its Alberta projects.
Now I know this may not sound like much, but consider that a recent BP report indicated a one percent improvement equates to 2 billion barrels of additional reserves. So based on BP’s report, a 2.56% average increase would equate to a more than 4 billion barrel improvement on BP’s original hydrocarbons.
At $90 a barrel, you’re looking at $360 billion worth of “abandoned” oil.
Who wouldn’t want a piece of this action?!
To a new way of life and a new generation of wealth…
Jeff Siegel
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Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.
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