Solar Springs Up Again.

by Natalie Pace.

Solar energy stocks went dormant this winter, but are prepared for another scorching hot summer.

What’s doubling at the speed of light? Solar energy sales.

Suntech Power Holdings annual sales in 2007 was $1.35 billion, more than double 2006’s total of $599 million, which in turn was more than double the prior year’s sales of $226 million (in 2005). LDK Solar has already tripled last year’s sales (at $331 million over $106 million), and they have yet to release the 4th quarter results (due in June 2008). Trina Solar’s annual sales jumped to $302 million, from $115 million a year ago.

You’ll notice that I mention all of the Chinese companies, while overlooking First Solar (based out of Phoenix, Arizona) and Sunpower Solar (based out of San Jose, California). Why? Mostly due to the source material, which has killed profit margins in Sunpower and inflated the profit potential of First Solar. Yes, First Solar and Sunpower saw their sales double in 2007. The question is: "What will be the case in 2008 and 2009?"

Sunpower had a big problem with supply in the last quarter of 2007, which is why we chose Suntech Power Holdings for our Company of the Month in October 2006, over Sunpower. Suntech had secured long-term silicon supply at a more reasonable price with MEMC Electronics, whereas Sunpower was experiencing more difficulty obtaining a clear, uninterrupted channel for silicon at a reasonable price, especially during the second half part of 2007. This problem was foreseeable in October 2006, and is largely responsible for the death of Sunpower’s profits in 2007.

That reality was reflected in the profit margin disparity between Suntech Power Holdings and Sunpower last year. Suntech’s net profit margin was at 12.55% compared to just 1.19% for Sunpower. "In the latter part of 2008 and beyond, we expect our industry's silicon feedstock to become more abundant, leading to lower solar panel prices which will redistribute the power and profit pools in the value chain," according to Sunpower CEO Tom Werner, in his annual report. Even though Sunpower’s profitability was just a hair’s breath above the red, Sunpower remained popular with investors, probably because their solar panels are aesthetically appealing and their energy efficiency is at the top of the marketplace. However, in our view, the better bet, at least for 2008, remains Suntech Power Holdings, which has long-term supply contracts with MEMC Electronics and is partially funding a new silicon manufacturing plant for Hoku Scientific.

In 2007 and the beginning of 2008, First Solar was the most popular solar energy company on Wall Street. First Solar is trading at a lofty price to earnings ratio of 91.60, and is one of the few solar companies that is still trading near its 52-week high. Most solar energy companies experienced an extreme pullback earlier this month (which is when we put Suntech Power Holdings and World Water and Solar back on the Hot News list -- at prices not seen for a year!). However, there are a few factors in First Solar’s powerful past dominance that investors should take note of.

Thin film solar versus silicon panels
First Solar uses cadmium telluride instead of silicon to transfer sunlight into useable energy. This was a huge competitive advantage when silicon was hard to get at a reasonable price. Thus First Solar’s operating margins were the highest in the industry – at 31.42%. That is shifting, however.

As Dr. Harry Atwater advised a crowd at the Green Xchange Conference last December 2007, silicon is an abundant source material, whereas cadmium telluride is rather rare. Once silicon manufacturing heats up, which is expected to happen this year, the desirability of cadmium telluride could diminish rapidly, as the advantage right now is cost, rather than efficiency. Once the costs of using silicon as a source material line up with cadmium telluride, silicon has the edge. Silicon based solar panels produce more energy more efficiently, and with the source material of sand, there is no foreseeable end in supply.



Thus as the market forces that supported First Solar’s lofty share prices shift back down to Earth, don’t be caught clinging to a rare trace element, when you could be walking in miles and miles of sand for years to come! This isn’t to say that there won’t be room for First Solar solar products in the years to come, but rather to say that the scientists, like Professor Atwater, believe that silicon is a better bet as the source material to power renewable energy as the fuel of choice, as we attempt to scale back our reliance on coal and fossil fuels.

So, this year, the solar energy companies that top our hot list include Suntech Power Holdings, Trina Solar, LDK Solar and our perennial favorite – World Water and Solar. Trina Solar is a Chinese company, in direct competition with Suntech Power Holdings. Trina has strong management and board, which is necessary in a highly competitive, rapidly growing industry, that is still very reliant on government subsidies and incentives to achieve market dominance. LDK Solar is a silicon wafer manufacturer that supplies wafers to companies, like Suntech and Trina, which has been tripling it’s sales over the last year.

Suntech Power was added to the Hot News list last week, when it was trading at $30/share. World Water was added at $1.01. Both companies have enjoyed a rally since that time, with Suntech trading at $42 and World Water and Solar trading at $1.23, as of March 31, 2008. In today’s market place of share price mood swings, it’s better to be patient for the lower buy-in price.

I added Trina Solar and LDK Solar to the Hot News list on April Fool's Day (and it wasn't a joke!).

Go to the article in the NataliePace.com, vol. 5, iss. 4 ezine to access the Solar Energy Stock Report Card.



Full Disclosure: Natalie Pace owns shares of World Water and Solar.
Please note: NataliePace.com does not act or operate like a broker. We are a new media website. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.

Investors should NOT be using the Hot News on Cool Stocks list or the Cooling Off list to trade their nest eggs. Your retirement plan should reflect a long, safe strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.

IMPORTANT DISCLAIMER: Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

Green Skyscrapers and Solar Louvers.

by Natalie Pace.

Featuring the winner of the 2007 Solar Decathlon, platinum and gold LEED Manhattan skyscrapers and paraffin microcapsules.

Imagine louvers outfitted with mini-solar cells and micro-capsules of paraffin in the ceiling and walls that help to insulate your beautiful and fully-sustainable home (that even powers your electric car). If Wow comes to mind, you're not alone. On October 19th, 2007, there were twenty teams from universities around the world competing for the best and brightest sustainable home, but one team's innovative designs were jaw-dropping -- in sleek beauty, simplicity of application and energy efficiency.

While 19 other competing universities relied upon more traditional sustainable designs - green roofs and walls, brown-water irrigation systems and discarded shipping containers -- the 1st place Solar Decathlon home that was built by the German team from Technische Universitat Darmstadt was an innovative collaboration of architecture and engineering unlike anything the world has ever seen.



2007 Solar Decathlon Winner: Technische Universitat Darmstadt
Photo Credit: SolarDecathlon.org

Darmstadt won the Architecture, Lighting, and Engineering contests. The Architecture Jury said the house pushed the envelope on all levels and is the type of house they came to the Decathlon hoping to see. The Lighting Jury loved the way this house glows at night. The Engineering Jury gave this team an innovation score that was as high as you could go, and said nobody did the integration of the PhotoVoltaic system any better. Darmstadt was one of seven teams to score a perfect 100 points in the Energy Balance contest (meaning the team created more power than it used).

University of Maryland took 2nd place and top honors in the communications category (website, tours and brochures), while the University of Santa Clara took 3rd place with high marks in all of the comforts of life - including power, appliances and hot water. The team from University of Illinois at Urbana-Champaign won the contest for Market Viability and will be featured at the 2007 Greenbuild Conference in Chicago from November 7-9, 2007. (Former President Bill Clinton is the keynote speaker at the Greenbuild Conference this year, with General Motors as a platinum corporate sponsor.)

What the Solar Decathlon highlights is that, clearly, sustainable living is a collaborative effort between engineering and architecture. The teams that scored the highest were equally weighted in talent in both arenas, and that is exactly what is happening in green building all over the world - not just at university competitions. Green is no longer just about throwing a half dozen solar panels on the roof. Green means inviting scientists, architects, visionary kooks, engineers and discarded candles into a think tank to watch chaos light up and take on new (and more sustainable) forms.

Anyone who is knee-deep in green is rapidly discovering that sustainability applications are site specific, and, in the words of PG&E SVP Nancy McFadden, conservation is more important and valuable than solar, wind, hydro or geothermal. Solar panels aren't as efficient in Manhattan as they are in Los Angeles. In the Big Apple, PV (photovoltaic) panels take a beating from the elements and the sun's pathway is narrowed by the skyscraper landscape. Thus, "blue roofs," with rain water cisterns, ice farms, and, potentially, water turbines, help to power and conserve energy in mid-town skyscrapers that are located along the wet, Eastern seaboard. The Southern California builders are getting creative with solar as roof tops, awnings, parking structures and now, thanks to Technische Universitat Darmstadt, even louvers, but have little use for collecting rain water in the dry Southern California landscape.

Super Stars of Green Building:
Below are just a few examples (and links) to some of the world's most creative and interesting cutting-edge Green design, architecture and engineering, from all across the nation.



WorldsNest.com, Taos, New Mexico


Photo Credit: © WorldsNest.com
Angel's Nest, a fully sustainable home in Taos, New Mexico, insulates the 2-story structure with a rain forest, which also serves as the black-water filtering system of the estate. Air-to-water machines convert the indoor humidity into drinking water. The institute-like estate runs off the power grid with solar, wind and hydrogen power, recycles water, and houses an eclectic group of scientists, contractors and engineers who claim that they can reduce the cost of photovoltaics by a factor of eight, turn dirt roads into concrete with enzymes that are safe enough to drink and power skyscrapers on water turbines.

None of these prospective products are fully operational yet, but one of the most promising of the WorldsNest innovations currently seems to be the enzyme roads, which do indeed bind soil into a concrete-like hardness, using only soil stabilizing enzymes. The road, which had recently been bladed before my visit in October, was so compact that stones were sheered cleanly, without getting pulled up from the soil. Since most of the cost of roads comes from prepping the soil and rehabilitating warps and sinkholes caused by water damage, having a foundation that gets harder with rain could be an enormously efficient, cost effective, green solution.

A second great achievement at Angel's Nest is the integration of insulation, energy conservation and natural lighting. The front side of the building is floor to ceiling windows, while the backside has no windows and is a shield against the wind and elements, trapping in hot air in winter and circulating air flow in the summer.

While WorldsNest does not yet feature all of the cutting edge green technology applications that their scientists boast of owning the patents on, the founders of Worldsnest.com, Robert Plarr and Victoria Peters, are living examples of green visionaries who are walking the walk. Their home/living institute is a beautiful haven with delightfully bright and warm yoga studios, and even a floating bed, which proves that reducing your carbon footprint doesn't mean you have to give up the designer shoes! Buy Robert and Victoria's book to learn more about their Secret of Sustainability.

2007 Solar Decathlon Winner
Technische Universitat Darmstadt's solar-paneled louvers were an amazing feature of the home, but the team didn't stop there. The louvers were capable of being pulled back, like French doors, or shuttered for privacy and energy conservation. The slats themselves, which were imbedded with sleek, small solar panels, are automated to track the sun for maximum efficiency. Paraffin microcapsules offered an efficient and lightweight means of storing energy within the walls of the home. The innovations of this home could (and should) start turning up in the Home Depots and Lowes of the world soon.

The Bank of America Tower at One Bryant Park: the world's most environmentally responsible high-rise office building.
The Dursts, the skyscraper visionary greenies who are holding the high ground in Manhattan, have almost completed their second monumental achievement in sustainable urban office buildings, after having built the world's first green skyscraper, at 4 Times Square (the Nasdaq building) back in 2002. The Tower at Bryant Park sports all the latest in innovative sustainable design, including the world's first "blue" roof, complete with cisterns that capture rain water for irrigation of the plants and use in the toilets. When the Bank of America team moves into the first 34 floors next May (2008), each person will have personal climate control settings and will breathe filtered indoor air that is cleaner (by far) than the air outside.



The Bank of America Tower at One Bryant Park: the world's most environmentally responsible high-rise office building. (© Durst.org 2006)

Going for Platinum
The Durst Organization and Bank of America are going for a platinum LEED rating on their skyscraper - all without one solar panel.

Editor's Note: LEED, or Leadership in Energy and Environmental Design, is the industry standard for green building, and was developed by the U.S. Green Building Council. The top rating is platinum, then gold, silver and bronze.

The sustainable systems incorporated into the design include:
1. Blue Roof - Cisterns collect 33,000,000 gallons of rain water annually, which is treated and then used to irrigate, flush toilets and cool towers. Savings: 10,300,000 gallons saved per year, with a 45% reduction in water costs.
2. Ice Farm (48 tanks): 8.5 megawatt co-generation plant, which allows the tower to stay off grid utilizing compressed natural gas.
3. Waterless urinals
4. Local Building Materials. 40% of the building materials are purchased from within a 500-mile radius. This supports local entrepreneurs and saves on gas and CO2 emissions.
5. Blast furnace slag (a byproduct of steel) is re-used in concrete for cement.
6. Floor to ceiling glass saturates the building with natural sunlight, cutting down on the use of artificial lighting. Natural shading at the top and bottom of the glass panels reduce glare for computer operators.
7. Continuous commissioning: annual maintenance checks ensure that operations are running properly and at optimal performance.

Why doesn't One Bryant Park sport even one solar panel? According to Helena Durst, solar has a 25-year payback in Manhattan, with a 20-year life expectancy. (Perhaps someone should be lobbying the New York governor for stronger solar incentives?)



The Riverhouse at One Rockefeller Park:
This Battery Park City waterfront condominium high-rise received a Gold LEED rating. The urban flats are currently on sale starting at just under a million for a one bedroom, to almost $3 million for a 4-bedroom/3 bath with views of the Hudson River and the Statue of Liberty. Green features of the building include:

1. Rooftop Photovoltaic panels.
2. Wood from forests that are certified renewable or responsibly harvested.
3. Special paints, adhesives and sealants
4. Glass curtain wall: views and daylight without electricity
5. Geothermal wells heat/cool the lobby spaces
6. Water-saving faucets and dual-flush toilets
7. Natural gas for electricity
8. Triple-glazed "blue technology" curtain wall
9. Storm water run-off irrigates green roof - reducing "heat island" affect.
10. Storm water is also used in mechanical system cooling tower
11. Programmable thermostats and carbon monoxide censors in the parking garage

LivingHomes and the first Wired LivingHome
Imagine getting a prefab, architecturally significant, green home that is completely wired and goes up onsite in one day. Hard to believe, but true. The LivingHomes team builds the home in a factory, and then ships it to the site in under a dozen modules.



The living room of the first prefab green LivingHome -- platinum LEEDS home.

The first LivingHome, which is available for tours in Santa Monica, California, was the first platinum LEED rated home ever. Whole Foods junkies, Patagonia-wearing yoga lovers, hybrid owners and Wi-Fi Skypies should be on cloud nine with this beautiful home. First movers pay a premium, but could end up with a home that will be beloved and renowned throughout time, much as the Case Study homes from the 1950s are today. Be the first in your neighborhood to own one, or better yet, contact the team and build your own LivingHomes community.

For more information, read "Green and Fab," from volume 4, issue 10.




BP's Green Gas Station:


Photo Rendering Courtesy: BP.com
Helios House is a "living laboratory" that uses green, eco-friendly innovations to give consumers a little better station experience. Located at the corner of Olympic and Robertson in Los Angeles, this station requires less water, wastes less water and pollutes less than a typical gas station. Other features include:

1. Recycled glass in the glass tiles
2. Solar panels
3. Green roof (living plants insulate and take CO2 out of the air)
4. Alkemi sinks and toilet seats (made with 60% post-industrial aluminum scrap)
5. Cell phone drop off (recycle your old cell phone at the station)
6. Low VOC "volatile organic compounds" paint is better for breathing

Learn more, including how to take your class on a field trip to Helios House, at TheGreenCurve.com.



Solar One, Nevada


The 64-megawatt Nevada Solar One. Photo courtesy of Solargenix Energy.
Solar One, the world's 3rd largest solar power plant, is located in Boulder City, just outside of Las Vegas. Nevada Solar One utilizes concentrated solar collectors - parabolic mirrors - with receivers, heating oil and steam turbines to generate enough power to light up over 15,000 households. Generating 130 MW hours/year, Solar One Nevada is a full-scale power plant. The carbon footprint reduction is, reportedly, equivalent to removing 17,000 cars off the nation's roads.