As promised, Green Investor will now reveal some solar stock picks. But first, a word or two of caution. Unfortunately, Green Investor believes that the solar sector is facing some serious internal problems that will likely to continue into early 2010. The industry is still in the midst of a shakeout. There is tremendous overcapacity, dropping prices and weaker demand due to the worldwide financing challenges. This will all result in lower gross margins and lower profits.
While the future of the industry is without question extremely bright, making money in solar stocks is a speculative endeavor that carries higher risk but also holds the potential for much higher profits.
Evergreen Solar (ESLR)
The wasteful and expensive traditional method for creating solar cells is being eclipsed by a new and cheaper process that’s energy and silicon efficient. And Evergreen Solar (ESLR) is at the front of this new wave. The Massachusetts-based solar cell manufacturer cuts down on cost by creating thin, but durable, silicon films to put in its cells.
Evergreen Solar starts out with the same silicon that all solar module manufacturers use. But instead of cutting up that silicon into thin slices and placing the slices into a cell, Evergreen makes bubbles. The company’s String Ribbon wafers originate from the natural science of “surface tension”. In simple terms the making of a String Ribbon wafer is just like the making of a soap bubble — the surface tension between the soapy bubble solution and the wand creates the bubble. The only difference is that instead of the “ring” inside which a bubble forms, we use two parallel high-temperature filaments between which a thin film of silicon is formed.
Evergreen’s proprietary String Ribbon technology is a much cleaner process than traditional wafer production. It uses less energy. It doesn’t waste silicon. And it’s cheaper than normal silicon processing for solar uses.
Evergreen has a stable customer base and its cost-effective products will likely attract new customers away from competitors. This is a strong company with an even stronger product.
First Solar (FSLR)
One of the best in the field is First Solar (FSLR). This one is pricey at $191 per share; however, you get what you pay for.
First Solar also features a unique technology. Instead of using the traditional silicon semiconductor approach, First Solar opts instead for cadmium telluride, which is what physicists call a direct bandgap semiconductor. Silicon is an indirect bandgap semiconductor. And in simplest terms this means that silicon solar cells don’t absorb much light compared to First Solar’s cadmium telluride modules.
First Solar can use a much thinner sheet to absorb a larger amount of light than its competitors. A thinner solar cell means lower cost production. And because of this, First Solar claims it has the lowest manufacturing cost in the industry – a substantial competitive advantage.
The current price to customers is less than $1.00 per watt – a cost that begins top rival electricity generated by fossil fuels. This achievement marks a milestone in the solar industry’s evolution toward providing truly sustainable energy solutions.
BioSolar (BSRC)
Looking for a special situation and a unique way to play the solar game? Try BioSolar (BSRC). Further, the company is double green – green material and green energy.
BioSolar has developed a breakthrough technology to produce bio-based materials from renewable plant sources that will reduce the cost per watt of solar cells. Most of the solar industry is focused on photovoltaic efficiency to reduce cost. BioSolar is the first company to introduce a new dimension of cost reduction by replacing petroleum-based plastic solar cell components with durable bio-based components.
Through the advanced manipulation of bio-based polymers, BioSolar intends to produce robust bio-based components that meet the stringent thermal and durability requirements of current solar cell manufacturing processes. BioSolar materials can be used directly in conventional manufacturing systems, such as injection molding and thin-film roll-to-roll, to create superstrate layer, substrate layer, backsheet as well as module and panel components.
Whether solar cells are produced using crystalline silicon, amorphous silicon or other solar technologies, BioSolar can help reduce the cost per watt through the use of its lower cost bio-based materials.
By removing petroleum from solar cells, BioSolar makes solar energy a true green source of energy.
Lots of risk here, but considerable upside. BioSolar has completed its product development, but is still a pre-revenue company. When BioSolar starts shipping its BioBacksheet to solar cell manufactures, the stock could take off.