May 22nd, 2010 by admin

We constantly hear the stress on going green and developing alternative sources of energy not only for conserving energy but also for fighting global warming. Galloping world prices have also been responsible for increasing attention on finding renewable sources of energy.

As petrol prices have risen remarkably with expectations of further growth, non-economical renewable resources are expected to become economical. Hitherto many of them could not be developed because of prohibitive costs.

Solar energy is one of the most prominent alternative sources of energy. Many countries have been toying with the idea of its development. Unfortunately its share in overall energy sector is a measly 0.1 percent. According to statistics, solar power has recorded a growth of 22 per cent during the last 10 years, with 35 per cent having been recorded during the last 5 years alone. However, it must be remembered that we are talking about a small base on which these growth rates are calculated.

Prominent Solar Stocks

With the spectacular growth of solar energy, there have been rising expectations, reflecting extremely high valuations of solar stocks. First Solar has been having a valuation of more than 182. Everyone seems to be catching up for a share of solar companies. Most prominent solar companies which found favor with a large number of investors are:

First Solar (FSLR)

SunPower Corporation (STP)

Suntech Power Holding Ltd. (LTP)

JA Solar (JASO)

Solar Enertech Corp (SOEN(

Nano Solar

Miasole

China Sunergy (CSUN)

LDK Solar (LDK)

Solarfun (SOLF)

In addition to the above there are a large number of smaller players which are still under the development stage. Most of these are young companies. Take the case of First Solar. Even this company started only in Nov 2006.

On The Thresholds of High Tech Bubble

To many critics, investing in solar stocks is just like investing in high tech stocks towards the end of the last century only to burst. To them there is much hype associated with these stocks. The main reason for this impression is that it is extremely difficult to develop economical and viable solar energy. Costs associated with these are extremely high and therefore, it is very difficult to be profitable.

This is also confirmed with the behavior of equity prices. With all time highs, most of these stocks fell by as much as 50 per cent at one time. These are extremely volatile and may not be suitable for majority of investors.

It is also opined that there are many other high growth companies in which investors can put their incomes. There is no need to risk one’s money in these risky stocks.

Many solar stocks like Solarfun and First Solar rose several fold during 2007 alone. Because of the greed involved in stock markets, many investors tend to get attracted and ultimately lose their money.

Most of these companies are china based. We may not be sure of the final valuations of their businesses.

The Bright Side

However, all is not gloomy with solar stocks. Solar companies have billions of long term contacts, they have bright guidance, they are backed by their national governments and in some countries there is plenty of sunshine available, ready for exploitation.

Venture capitalists are pouring in huge amounts of money in this energy sub sector. Who knows some solar stocks may turn out to be gold mines.

Recommendation

Investment in solar companies seems to be very risky, though lucrative. Investors in these should pay attention to their PEO ratios. Another lucrative option can be solar ETFs. Moreover some companies like GE are spending heavily in solar power though as a fraction of their total investments. It might be advisable to invest in these companies instead for the sake of safety. For more articles like this, bookmark www.RenewableEnergyMutualFunds.net

Author: Altaf Sahibzada

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May 4th, 2009 by admin

Renewable Energy Mutual Funds may seem risky to some investors, considering the recent performance of the stock market and how many investments have recently performed.

However, it is always the savvy investor that finds the "green" spots (forgive the pun!) in the market to invest in and exploit.  With the growing importance of renewable energies and our need to seriously address our fossil fuel dependence, the time is now for investors who can take and manage the risk to discover how renewable energy mutual funds are not only a socially responsible investment vehicle, but one that should prove profitable as well! 

Investing in alternative energies, or "green energy" may seem like the only bright spot on the investment horizon. As stories circulate about peak oil and the prospect of running out of fossil fuel, alternative energy investing seems to make good sense. But here are a few things you need to consider before converting your entire portfolio into alternative fuels.

The wind and solar energy industry is still relatively young and capital-intensive. A lot of research and development is still necessary create products and delivery systems that will be affordable to consumers. When researching new companies to invest in, it’s important to determine whether or not they are sufficiently capitalized for the long term. Many new alternative energy companies were started within the past few years in response to the high cost of oil But as oil prices decline to more affordable levels, the demand for alternative energy softens, and some of these newer alternative energy companies are finding themselves with cash flow problems.

This means that due diligence before investing is just as important in the alternative fuel sector as it is in any other sector. Recently there seems to have been a misconception that any stock that was "alternative" or "green" was a sure winner. That’s simply not true. A strong balance sheet and healthy cash flow is as important as ever. Maybe more so, due to the volatility in the energy markets right now and for the next few decades.

It also makes good business sense to remember that most alternative energy companies are start-ups without long tracks records of success. That simply means that they are inherently higher-risk than established companies, no matter how attractive the thought of "green" energy may be. So treat them as you would any higher-risk growth stocks in terms of our overall portfolio strategy.

A good way to invest in alternative fuels if you are philosophically motivated in that direction, yet sill mitigate some of the risk is to invest in established energy companies that are expanding into the alternative fuels sector. Although the thought of investing in one of the major oil companies may not appear to be very "green" on the surface, the fact is that they are actively participating in the research and development of alternative fuels as well. So finding the existing energy companies that are putting the most effort and resources into providing viable alternatives in the near future may be the smartest way to safely invest in alternative fuels right now.

Author: Bernz Jayma P.

Article Source: http://EzineArticles.com/?expert=Bernz_Jayma_P.

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