Tuesday, April 26, 2011

Trina TSL) (ASTI) (CSIQ) (JASO) Cheap Because of Artifical Markets

Until solar can prove it can stand on its own in the free market, the share prices of the companies will continue to be cheap, as is the case with Trina Solar (NYSE:TSL), Ascent Solar Technologies (ASTI) and JA Solar (NASDAQ:JASO), which closed mixed Monday.

The major problem with solar is everyone knows it isn't determined by consumer demand, but on government interference and strategies; something that never ends well.

Another major challenge for solar are the assumptions somehow it's going to solve its problems by some type of future invention. People that say this (and they're many) are just true believers and almost religiously want solar to work with a fervor that only the faithful can match.

That's why when you hear those proponents of solar talk about it, it's predicated largely on wishful thinking and faith in some unforeseeable future, rather than the supply and demand of the marketplace.

Solar would become more attractive if it was cut from the governments around the world and allowed to compete against other energy sources. Then they can prove if they are contenders or pretenders. At this time, most investors believe they're pretenders, as evidenced by their weak performances and share prices.

Solar companies will continue to trading at earnings multiples that reflect companies that are in decline until that becomes the reality.

With that unlikely to happen, and some governments like Germany and Italy backing off some of their commitments, it's doubtful the extremely expensive and unreliable energy source, along with solar companies, will be viable any time soon, if ever.

11 comments:

Anonymous said...

Solar is reliable. It produces electricty when the sun is out. It warm climates this conincides with peak electricity demand. It is much cheaper to install "expensive solar" to meet the peak demand than to build a new power plant that is only needed at peak times.

Anonymous said...

Agree with above and to avoid nuclear disasters when happen. And do remember - everything is not about money? Would you sell the future of mankind if you were paid enough?

Anonymous said...

bit bored ey...every day the same thing...hope you are ready to cover :)

Anonymous said...

Wow, way to argue a one sided story, the governments are in control of all energy sources, do you see a free market for oil? Didn't think so, get your facts straight and stop arguing on speculation. I think we can all agree dependence on oil is not going to work.

Anonymous said...

Here is an another guy beside Ray, who tries to talk solar down. Just admit your short interest in solar and sh-up.

Unknown said...

stand on its own? Naw....there's no government interference with Coal, Nuclear, Oil, water generation systems at all. Please correct me, after the Japan disaster didnt Obama Admin come out and reiterate the "loan incentives" in place for new nuclear plants?

Anonymous said...

This article is full of BS. The only reason the solar stocks are down that its being controlled by investors. How many downgrades do we see for these stocks and in few weeks we will see upgrades and the stocks will go up. Since solar is no different than coal, nuclear, wind, all controlled by the gov. Solar has the potential to be one of the cleanest (wind too) sources of energy on large scale if properly utilized, but its not, cause every top gov. employees have deep pockets in oil.

King said...

This is a pretty damn good article. Enough about all this so called alternative energies.

The author is right, the only reason solar is feasible is because it is being heavily subsidised.

The only thing I can think for solar is to use on some sort of military excursion. As a power source like a power plant, I think it is completely unfeasible. They need to be maintained, and the power they generate just doesnt justify their cost.

Maybe it might some day become feasible, but I think that would be when there is new technology. The current existing solar is just not going to cut it.

BTW, I think a large part of why solar stocks are cheap is because their chinese companies? There is a lot of worries about fraud.

Anonymous said...

That is all true for 1st and 2nd generation solar but what about 3rd, 4th and 5th gen solar?

Unknown said...

You keep posting lies about solar, I keep posting comments to set the record straight.
At first I wish comment on the expression "artificial markets". Any market is artificial since they based on trades. Cloud computing, cotton futures, Gold - name it. Guess what, because of artificial markets the price of gold Is expensive...
You write about "some type of future invention" needed to jump start the solar train but claim this to be a principle hope. Are you out of your mind? Obviously you never talked to R&D departments of Dow, Dupont or you just lacking scientific knowledge in general (electrolysis anybody?). If you have a though time following the transformation of the grid just follow discussion in Germany on streaming Internet radio stations - you'll get a clue on the size of the opportunity in no time.
And do us all a huge favor and don't use the word subsidy in context exclusively with solar anymore, please.

Unknown said...

Fossil Fuels are heavily subsidized by not paying the full cost of carbon. When we get off our dumb @sses and make that a reality (before we suffocate ourselves) solar will soar. Realities can change literally overnight.