David Fessler (Investment U):

By the time 2009 is in the books, the record will show that solar energy stocks endured a tough year. Hardly surprising, with many Wall Street analysts (yours truly not among them) lambasting the sector for much of the year.

What’s more, they also expect the carnage to continue into 2010, with losses predicted for as many as half the world’s solar companies.

The analysts’ “thought” process – and I use that term loosely – goes something like this:

• First, they suggest that a “huge” oversupply of polysilicon (the raw material used to make silicon-based panel assemblies) exists. But this is only partially true, as increasing panel sales are rapidly eating into this oversupply. 
• The analysts’ next miscue is over new thin-film panel technologies. They predict companies producing panels based on the new thin-film designs are doomed because the oversupply of polysilicon will keep poly-based panel prices too low for the thin-film guys to compete.

Talk about a myopic view if there ever was one. I suspect many of these analysts will be eating crow instead of turkey at Thanksgiving next year. Here’s the real story on the solar energy sector…

Note to Experts: Refill Your Glasses

Before I go any further, let me say that some solar energy companies will lose money in 2010. Others won’t make it at all. But that’s normal in any competitive environment.

But the experts need someone to refill their half-empty glasses, so I’ll play the role of bartender.

The truth is that the solar enery sector – particularly thin-film panels – is growing at a rapid pace. It’s one of the reasons why Trony Solar Holdings Company Ltd. (NYSE: TRO) is expected to go public in the next few weeks. Trony is China’s largest manufacturer of thin-film based solar modules.

Its IPO – underwritten by JP Morgan (NYSE: JPM) and Credit Suisse (NYSE: CS) – is expected to raise over $200 million. And it’s oversubscribed, too. That doesn’t sound like an industry in trouble to me.

And it certainly doesn’t sound like an industry that’s doomed to replicate the 1980s, when 400 solar panel manufacturers got whittled down to just five as the market collapsed.

The market for solar photovoltaic panels (those that produce electricity) is increasing rapidly. All the industry needs is a little change in perception…

Click here for the rest of Mr. Fessler’s analysis at Investment U.

But a year ago, the 81-year old chairman of BP Capital spent his own money to buy prime time on major networks and mobilized an “army” of believers in order to get the word out about the dangers of continued dependence on foreign oil.

Earlier this month, Pickens appeared on CNBC’s “Squawk Box” to discuss the progress of the “Pickens Plan,”which essentially seeks to reduce the nation’s dependence on foreign oil through a combination of wind-generated power and natural gas powered vehicles. The goal: Drastically reducing or eliminating the need for foreign oil in as little as 10 years.

His timing was perfect, as oil prices shot to all-time highs around $150 a year ago. The plan garnered a lot of attention. And to his credit, over the past 12 months, nobody else has articulated a plan as clearly and succinctly as Pickens’ has.

Today, however, oil prices are down some 54% and the U.S. is sliding deeper into recession. Is shutting off foreign oil still a concern? Have we made any progress in doing so? Are we any closer to a national energy plan?

The short answers are:

1. Definitely yes
2. Yes
3. Almost

Let me explain…

Get Rid Of The Rogues… And Pocket $400 Billion

While the price of oil has declined dramatically over the past year, our dependency on foreign oil is as great as ever. We still get over 70% of our oil from other countries, and it’s a huge security issue.

While the transfer of wealth – dollars out for oil in – is less, it’s still a huge net outflow of nearly $400 billion annually.

There’s no question that keeping that money here will not only have a positive effect on our trade balance, it’ll make a huge difference in the U.S. economy – a “free” $400 billion annual stimulus package, if you will.

Alternatively, according to Pickens, “If we go 10 more years with no plan, we’ll be importing 75% of our oil and it will cost us $300 a barrel.”

Even if he’s wrong by 50% – which is unlikely given increasing world demand – it’s still a big problem. So how do we get rid of the rogues?

The “Anti-Oil”: U.S. Natural Gas Reserves Soaring

In terms of our progress in displacing foreign oil, there’s only one quick way to do it: Replace it with natural gas.

The Potential Gas Committee – the nation’s authority on natural gas supplies – recently issued a report that showed a substantial increase in U.S. natural gas reserves.

The report indicated that the nation’s gas reserves have increased by 25% to 2,074 trillion cubic feet (tcf) from 1,532 tcf in 2006 – the last time the report was issued. It was the largest increase in the 44-year history of the committee and its language reflected that: “[The report] shows an exceptionally strong and optimistic gas supply picture for the nation.”

That’s an understatement. By 2030, it projects a supply of nearly one hundred years – the most in the world.

John B. Curtis, a geology professor at the Colorado School of Mines and the report’s principal author, said,“New and advanced exploration, well drilling and completion technologies are allowing us increasingly better access to domestic gas resources – especially unconventional gas – which, not that long ago, were considered impractical or uneconomical to pursue.”

The findings have shifted the focus onto natural gas as a possible transition fuel as we move from coal and oil to solar, wind, geothermal and other non-carbon sources of power. It couldn’t have come at a more opportune time.

A National Energy Plan: Slow And Steady, But Are We Winning The Race?

The best thing the government can do to move us away from fossil fuels is to provide funding and tax incentives to develop and use something else (and then get the hell out of the way). And it appears as though Congress is trying to do just that with natural gas.

H.R. 1835, known as the “New Alternative Transportation to Give Americans Solutions Act of 2009,” amends the Internal Revenue Code of 1986 to create jobs and encourage alternative energy investments.

Here’s what this act provides:

• An excise tax credit through 2027 for alternative fuels and motor vehicles involving compressed or liquefied natural gas (LNG).

• An income tax credit through 2027 for vehicles powered by compressed or LNG.

• A new tax credit for the production of vehicles fueled by natural gas or LNG.

• A tax credit for alternative fuel vehicle refueling property expenditures for refueling property relating to compressed or LNG and allow an increased credit for such property.

• Requires 50% of all new vehicles purchased or placed in service by the U.S. government by December 31, 2014, to be capable of operating on compressed or LNG.

• Authorizes the Secretary of Energy to make grants to manufacturers of light and heavy-duty natural gas vehicles for the development of engines that reduce emissions, improve performance and efficiency, and lower cost.

Now before I get a dozen e-mails pointing out that natural gas is just a different fossil fuel, let me head them off. There’s no argument there. But here’s where it’s very beneficial…

The Benefits Of Natural Gas – And How To Play It

Natural gas is a much cleaner burning fuel, produces less carbon emissions and, most importantly, it’s found here in abundance. It’s a walk in the park to produce new cars and trucks that run on it, and convert older ones as well.

And if it helps free of the grip of rogue nations around the world in 10 years or less, then I’m all for it. We’ll all be better off economically, and we’ll all have greater piece of mind.

How do you play it? Take a look at Clean Energy Fuels Corporation (Nasdaq: CLNE), a provider of natural gas as a vehicle fuel, primarily for fleet use in the United States and Canada. It designs, builds and operates natural gas fueling stations, and provides financing for natural gas vehicles. It and others in the sector will undoubtedly benefit from this legislation when it’s passed.

Source:  Energy Independence: The Progress, The Problems… And A Way To Profit

{Editor’s Note: One year ago, oil prices were atrecord highs… the U.S. political scene was gridlocked amid the presidential election… and a fellow named T. Boone Pickens was promoting a bold new plan to wean the U.S. off its oil dependency and towards wind power and natural gas instead (and Pickens is an oilman). Today, oil prices are trading around $68, so where does the “Pickens Plan” stand now? Investment U columnist and infrastructure specialist David Fessler reports on whether cheaper oil prices have dampened the drive towards greater energy independence, plus a way to play a natural gas-powered future.  Martin Denholm, Managing Editor, Smart Profits Report}

Let’s make some trades this morning. We asked Rick Rule, a living legend here in Vancouver, what’s the next bubble market?
“The Canadian market does not care about small oil and gas companies,” he told us yesterday. “Which means that small Canadian O&G companies are selling for 50-60% of net asset value. They are very, very, very cheap. They are unloved, with no finance options and no trading liquidity… and I love that. This value is free. There will be much money made in small-cap Canadian energy.

“But that will pale in comparison to alternative energy. This is what investors need to pay attention to. There is money to be made in solar, wind, even something as stupid as biofuels. Alt energy is now politically and socially correct. It has the full backing of the U.S. government.

“I would encourage you to look at small hydro and geothermal. The others have problems. Solar has one big problem — night. Wind doesn’t always blow either, and people don’t like to live places where the wind blows all the time. You might make money in solar and wind, because government likes it, but I don’t have the courage to buy a biz that’s success is determined by the Governator.

“Geothermal is always there. It is spectacular. So is hydro. In the short, medium and long term, you will all turn out to be happy. They are the uranium of this generation. I think we are on the verge of an incredible mania in alt energy.”

Which specific geo and hydro businesses? Rick has named company after company after company to our attendees at this year’s Investment Symposium. We’ve recorded nearly every second of his presentations and recommendations… you can hear them too with the Symposium CD/MP3 set.
“The world’s biggest energy player has thrown $600 million into a research partnership to study algae oil’s potential,” reports Greg Guenthner in a similar vein. Not coincidentally, we’ve heard several Symposium speakers mention this exact transaction. “Exxon Mobil and human genome researcher Craig Venter have teamed up in an attempt to make algae oil a viable fuel source.

“‘There has been so much hype and hope about the potential for algae that this announcement should act as a reality check for everyone,’ Venter told the Financial Times.

“Of course, this new partnership does not mean we will be filling our tanks with pond scum biodiesel just yet. Developers will still need to tackle genetic engineering and oil extraction issues…

”But Exxon Mobil’s leap into the algae oil market effectively legitimizes the industry.”

Want Greg’s microcap algae play? Check it out here, along with the rest of his Bulletin Board Elite portfolio.
Of course, alt energy is dead to Wall Street (all the more reason to buy). For the last two weeks, surprise blue chip earnings anouncements have led the market up, and today is no exception. Better-than-expected earnings from AT&T and 3M are in the spotlight today, and the S&P is up 2% as we write.
Hell, even The New York Times is making money again.The Old Gray Lady earned almost $40 million in the second quarter, the paper reported this morning. The NYT pulled it off by jettisoning staff and cutting opperating costs by 20%… and there was this little “favorable tax adjustment” that boosted earnings by $37 million.
Exisiting home sales rose for the third straight month in June, the National Association of Realtors says today, adding to the buying frenzy. Sales of previously owned homes inched up 3.6%.

“We have finally bottomed out,” PNC’s chief economist told Bloomberg. Heh, we’ve got a fine bridge to sell that fellow…

Best we can tell, the market-clearing process is still chugging along. Of all the sales in June, 31% were distressed. Prices are still plunging — the median price is down 15% from the same time last year, to $181,000. There is a still a historically high 9.4-month supply of exisiting homes on the market. Is that what a bottom looks like to you?
Not to mention, the job market still stinks. This morning, the government said there were 554,000 initial jobless claims last week. That’s off crisis highs of over 600,000, but obviously not by much. Continuing claims rang in around 6.2 million.
“Chicken sales will probably lead unemployment numbers as an economic indicator out of the recession,”writes our resource man Alan Knuckman, just back from annual National Chicken Council conference (sounds like a real hoot!). “Chicken growth has slowed with the toughening economic conditions, but still is three times that of beef. Restaurants and home consumers have seen a shift in protein demand and replacement with chicken or other chicken parts.

“These guys do volume because people love chicken to the tune of over 700 million pounds a week, with per capita consumption now at 86 pounds per year. In fact, consumption has quadrupled in the last 40 years and doubled in the last 20. BSBM — boneless, skinless breast meat — has paved the way for growth, but now dark meat is making a move as consumers cut food costs.

“Now, all this chicken talk is fun and interesting, but how does this make us money? BRIC consumers (Brazil, Russia, India and China) all have expanding middle-class populations that are now in the position to buy better food. Not fancy cars or electronics, but simply better protein to feed themselves and their families.

“Here in the United States, there is a 0.95 correlation between chicken consumption and income and personal consumption expenditures. More money to spend means more chicken bought. As others have their incomes rise worldwide, those citizens can add more meat to their diets.

“This growth will put tremendous upside pressure on the base inputs: commodities, which are used to feed, process and transport the protein of chicken, beef, pork and even farmed fish. Protein is what’s for dinner, and the U.S. is serving the rest of the world.

“The income growth in underdeveloped countries will continue to put our farmers in the leadership position to deliver. Plus, all along the way, we’ll be ready to profit here at Resource Trader Alert.”

If you want to trade this trend, you’ve got to check out Alan’s latest report on his “no-brainier” trading strategy.
The 2011 state budget crisis has already begun. You likely read the headlines last week, that state governments around the country were able to close $142 billion worth of budget gaps for the 2010 fiscal year. Well, according to the latest from the Center for Budget Policy and Priorites, 12 states and D.C. are already facing new budget gaps totalling $23 billion.
That’s not great for the ol’ U.S. dollar, nor is today’s stock rally. The dollar index is down to a fresh six-week low of 78.5.
What would be the best way to get money and yourself out of the country if there is a sudden collapse in the U.S. dollar? That question was posed last night to our Whiskey Bar panel — one of the highlights of the Symposium thus far. We managed to round up our most opinionated, venom-spitting editors for a panel discussion — Doug Casey, Chris Mayer, Eric Fry, Byron King, James Howard Kunstler, Gary Gibson, Patrick Cox and Barry Ritholtz. There’s no way to paraphrase a group like that, so here’s a snippet:

Casey: “It is still possible to send all the money you want out of the country… very possible to buy real estate. I bet in two years, it will be a problem to do both. I think the fuse is getting really short. Once you send it out of the country, buy something like real estate. My two favorites are Argentina and Thailand. I think Argentina is about to change radically, like New Zealand in the ’80s.”

King: “You need to start wrapping your brain around this. When I was in South Africa, I was told by this old Dutchman — and now I really don’t mean to offend anyone, this is just what he said — when the Jews leave, it’s time to leave. When the Portuguese leave, it’s too late.”

Ritholtz: “Keep your boat fully fueled and get ready to sail… pretty safe out there. I don’t think it’ll be an ongoing firestorm. You’ll just need a place to lay out for a week while the worst of it passes.”

Kunstler: “It’s important for those in business leadership to start thinking about defending your country and doing things that make this culture better. We have no time to be crybabies. Just too much to do to get this country back together again.” (Spontaneous applause.)

Gibson: “I’m looking to get work on Bill Bonner’s ranch.”

The event likely peaked when Doug Casey called everyone in the room “whipped dogs that roll over and wet themselves” whenever they’re scolded. Evidently, he was upset there was no gunpowder or tobacco allowed at an event sponsored by Whiskey & Gunpowder. Heh. For more from Doug, be sure to check out his presentation in the Symposium CD/MP3 set.
With that in mind, one last note — a genuine tragedy: The Brits are taxing one of their few national treasures into extinction:

As if the legnedary British watering hole didn’t have enough head winds — smoking ban, the recession, etc. — the Economist reports that recent tax hikes on booze are causing over 50 pubs to close every week. Taxes on a pint were around 8 pence 30 years ago… they are 38 pence today. Maybe it’s just the reminants of last night’s Whiskey Bar still in our bloodstream, but what a shame!
“Your reader who was looking at Florida real estate hit the nail on the head,” writes another reader. “My wife and I also went last year to Florida to look at ‘super’ deals and foreclosures and short sales. We concentrated in the Palm Coast area and learned that most banks had stopped foreclosing and were doing all things possible to help short sellers (except take less than what was owed by any great degree). The banks realized that if they foreclosed, THEY would now have to pay the taxes, upkeep, etc. on the properties, and, even in the case of condos, maintenance fees or dues!

“Most of the properties we looked at were in the $300,000-600,000 price range, and, as a result, had taxes of $6,000-7,000 and maintenance fees of nearly equal cost! Ouch! We too have decided to rent — unless you live there at least six months out of the year, it doesn’t pay to ‘own,’ and even then it may not.”

Source:  The Next Bubble, The Chicken Indicator, Surviving the Worst Case Scenario and More!

It is high time for our political leaders to make some key decisions.  And that translates into large uncertainties for investors that have held the market in a range and with low volume. We do not know whether “Cap and Trade” legislation will pass the Senate and we do not know whether and any healthcare bill will pass through Congress, or what that bill might entail.  And these two issues are paramount for the future of America.  

As we discussed earlier, cap and trade could cause incremental costs in energy for all of the United States, particularly in all carbon-based generation of electricity.  Increasing these costs will make carbon-based energy less competitive with alternative sources, like solar and nuclear.  The benefits of this legislation will be less carbon emissions, cleaner air, less dependence on imported oil and the creation of new jobs in the alternative energy sector.

However, this all comes at the expense of jobs in the traditional energy sector, which is currently the backbone of our energy policy. It also means higher job losses in the rest of the economy due to higher energy costs.  Remember that the United States is the “Saudi Arabia of coal,” given its abundance here.

All of these uncertainties are huge, as are the stakes for a multitude of sectors.  I have been surprised by the unpredictable decisions of our legislators many times.  In addition, legislative add-ons that tack hundreds of pages onto a bill right before it comes to a vote make prior analysis nearly impossible.  Therefore, unless the outcome is almost a foregone conclusion and the details are clearly spelled out well beforehand, making strong bets on their legislative outcomes is just plain gambling.

The unemployment rate rose to 9.5% in June as the economy shed 467,00 jobs. That’s up from 322,000 in May.  Jobs are a lagging indicator and tend to peak well after the economy has peaked.  But they are the best coincident indicator of economic activity.

Warren Buffet recently said that he has not yet seen any green shoots in the economy.  Conversely, General Electric Co. (NYSE: GE) Chief Executive Officer Jeffery Immelt said that all the pieces are in place for a recovery in the United States.  Yet the only areas of strength he mentioned were abroad:  China, some areas of the Middle East and other emerging economies.

But what we can all agree on right now is that there is no inflation in sight, despite the massive amounts of quantitative easing from the U.S. Federal Reserve.  But it won’t be long before inflation does rear its ugly head.

Like the people in Germany who were deeply affected by hyperinflation, I remember living and analyzing companies in Argentina in the 80s with inflation rising at a rate of 1% a day.  It was not fun, and the distortions to economic activity and financial statements were amazing.

Although the Fed has repeatedly indicated that it is ready to remove the monetary stimuli at the appropriate moment in an aggressive-enough fashion so as to preclude an inflationary spike, neither we can be sure that the central bank’s actions will meet with immediate success.

Federal Reserve Chairman Ben S. Bernanke is very capable and his resolve gives me comfort, but as former Fed Chairman Alan Greenspan told us when he was running the central bank, there are important variables in monetary policy that the Fed cannot know for sure: Among them are the lags between the Fed’s actions and the response in the economy and the precise sensitivity of the economy’s response to the Fed’s actions.  It is like steering a large transatlantic ship while watching in the rearview mirror.  By the time you see an iceberg, the ability to reverse or alter the course is very limited.

If we observe that the level of both monetary and fiscal intervention in the economy is at historic highs, then we have to understand that applying the just doses of intervention and reducing those doses as the economy gains a “self-sustaining” pace is a very tricky exercise.  Even allowing for the best of intentions and the immaculate professional abilities of the Fed, this will be a very difficult task to pull off.  And what is self-sustaining growth, anyhow?

We also need to understand that the current reflationary policy, which was employed to prevent the country from falling into a deflationary spiral, is actually seeking to create a little inflation.  And it would be unpardonable to see the country fall back into a double-dip recession after all this intervention, should the Fed pull on the reins too soon.

In fact, the Fed and the Treasury Secretary Timothy F. Geithner have repeatedly led us to believe that they intend to see the recovery ingrained before withdrawing significant amounts of stimuli.  It makes all the sense in the world.  The logical implication is that they would rather see an unpleasant reading or two on the inflation front than see an unpleasant reading on the growth side.  It is a very difficult situation to manage and they are not perfect.

So right now, when inflation expectations are well subdued, it is a good idea to add a position in Treasury Inflation-Protected Securities (TIPS).  The easy way of doing this is by buying the iShares Barclays TIPS Bond Fund (NYSE: TIP).

All of these pending uncertainties that I mentioned are adding to the traditional summer doldrums and we are seeing very low stock trading volumes.  So we are going to take advantage of the situation to get a good valuation on these bonds well before inflation expectations pick up.

Also, adding bonds to the portfolio has a stabilizing effect.  And the two traditional worries with bonds: A drop in the value of the U.S. Dollar and an increase in inflation are actually hedged, at least in part, with TIPS.  Because inflation is fully hedged as the principal is indexed by the consumer price index (CPI) index.

Recommendation: iShares Barclays TIPS Bond Fund (NYSE: TIP)at market (**).
(**) - Special Note of Disclosure: Horacio Marquez holds no interest in the iShares Barclays TIPS Bond Fund. ]]> http://www.contrarianprofits.com/articles/the-ishares-barclays-tips-bond-fund-is-a-good-way-to-brace-for-imminent-inflation/18728/feed 0 http://www.contrarianprofits.com/articles/the-direction-of-energy-policy/16077 http://www.contrarianprofits.com/articles/the-direction-of-energy-policy/16077#comments Thu, 30 Apr 2009 19:36:45 +0000 Byron King http://www.contrarianprofits.com/?p=16077 The other day I had lunch with a “brain trust,” of sorts.  Participants included a retired executive from an aerospace company.  This guy helped design and build many of the reconnaissance satellites that the U.S. has launched.  There was a senior executive from a large steel company.  There was a venture capitalist who made his first $500 million in the software industry, and who now has much of that wealth spread around in biotech and nanotech startups.  There was a former senior political appointee who worked in the Treasury Department.  And then there was me.

“Climate Change” Driving Policy Now

According to the satellite builder, the dominant elements of the political and media culture are “completely in the tank” when it comes…

Alternative energy is hot stuff. Sure energy demand is waning during the economic downturn and crude prices have dropped to a third of their all-time highs, but we all know the bears will eventually fill their stomachs and move on.

At least that is what the folks investing in solar, wind, biofuels and geothermal technology are betting on.

There is a report out this week stirring their ambition. According to research released yesterday by Clean Edge, worldwide alternative energy revenues soared by 53% in 2008 to $116 billion. Not bad, but it pales in comparison to the $477 billion in revenues Exxon Mobil (NYSE:XOM) recorded during the same period.

Fortunately, the industry is expected to grow, but we will have to wait at least a year or so. The current recession has created a nasty speed bump for the “green” economy. Even with Obama’s massive spending efforts, it will be at least a decade until alternative-energy revenues double. Clean Edge estimates the industry’s revenues at about $325 billion by 2018.

Lots of risk, little reward

That is steady growth, but does not come anywhere close to matching the ambition held by so many investors that are planning to get rich overnight thanks to “green” growth.

Looking forward, we cannot be fooled into hoping for too much change. Five years ago investors (or was it politicians?) were claiming clean coal technology was going to power the nation in the near future. We all see how that industry is still lacking its formal introduction to the world.

Read the full article here: In-and-out strategies for alternative investment profits

This from David:

The World’s Largest “Air” Force…

Mention “Air Force One” to someone here in the U.S. and visions of a Boeing 747-400 with the Presidential Seal on the side quickly come to mind.

But now there’s another new meaning associated with the phrase, and it’s good news for the guy that gets to ride in the jet.

In 2008 America became the global force in wind-generated electricity. President Obama can take heart in the fact that his pledge to cut imports of foreign oil is already underway, at least in the wind power arena.

According to the Global Wind Energy Council, last year America’s installed capacity of wind generator capacity totaled 25 gigawatts, edging out Germany, the previous leader.

The U.S. added 8.4 gigawatts of capacity in 2008 alone, more than any other country. Global capacity grew at 29% last year to a total of 120 gigawatts. Even with all this torrid growth, wind power provides a paltry 1% to the global energy supply, leaving lots of room for growth.

Most folks think the world’s desire to “Go Green” is the reason wind Power is gaining so much popularity and wind farms are popping up all over the place, like daffodils in the spring.

But they would be wrong. The real reason is simple: it’s the old concept of supply and demand. And without a huge ramp up in supply of alternative, clean (green) sources of energy like wind and solar provide, the world will be facing a huge energy gap in as little as fifteen years.

It’s all good news to wind turbine manufacturers, like General Electric (NYSE: GE) and Vestas Wind Systems (CPH: VWS), the world’s largest manufacturers of wind generators.

It stands to benefit companies like Americas Wind Energy Corporation (Nasdaq: AWNE), a large manufacturer and distributor of wind turbines to wind farm developers in North America.

The biggest roadblock to another banner year for wind this year is the clogged credit markets. Wind farms require lots of capital to construct, but without a properly functioning credit market, these big machines will stall, regardless of how hard the alternative energy winds are blowing.

Source: Americas Wind Energy Corporation (Nasdaq: AWNE): Stock of the Day

This from the editors at Investment U:

In the news this morning, Trina Solar (NYSE: TSL) announced that fourth quarter revenues would beat expectations.

It’s an unexpected bit of data when many were starting to count the solar sector out – and not for good reason. After our last energy crisis, many alternative energy producers, like solar, were simply forgotten about when gas prices came back down.

With the average price per gallon at around $1.96, who could blame them if they expected the same thing to happen? But the interesting thing is that it hasn’t.

Trinity Solar follows news from Suntech Power (NYSE: STP), the world’s largest solar module producer, that it expects production to increase – almost 60%. That’s quite the opposite of a drop-off.

Granted, there are just as many solar losers, as winners. Canadian Solar (Nasdaq: CSIQ) reported negative numbers along with a number of others, from Applied Materials (Nasdaq: AMAT), JA Solar Holdings (Nasdaq: JASO) and GT Solar International (Nasdaq: SOLR).

But the fact that we are seeing resilience form the solar sector and companies holding their own, means that this time around might be a little different than last. And that’s a good signal for us to keep our eyes on solar.

Because any strength in this market is impressive, regardless of where it is.

Source: Sun Still Shines on Trina Solar (TSL)

The study pits hard economics against White House politics and feel-good special-interest groups. The new evidence begins to show that even the most starry-eyed optimists of the green movement may not be the best friends of individual investors looking for speculative returns in alternative energy.

Articles in the Wall Street Journal and elsewhere have recently begun to call attention to the elephant in the room: that today’s state of economics simply don’t make sense for a major renewable-energy push in America. Low oil prices, tight credit and the highest unemployment in decades have conspired to make renewable energy a losing proposition.

Investors who believe otherwise may soon find themselves in the red.

Massive blackouts in the East Cost over the past decade certainly provide evidence for a grid overhaul. But to do it in the name of a greener America presents investors with a misleading business case for the investment.

The study was sponsored by the most powerful players in the electricity industry, including the Tennessee Valley Authority, PJM Interconnection LLC, Midwest Independent System Operator, Mid-Continent Area Power Pool, the SERC Reliability Region and the Southwest Power Pool. It was funded to probe the financial challenges of weaning America off fossil-fuel power plants.

The results are especially pertinent as the Obama administration sets a mandate of sourcing 20% of the country’s electricity through renew energy by 2024. In 2007, the U.S. drew about 7% of its electricity from renewables, according to the Energy Information Administration.

As a result of Washington’s green-mania, headlines have been luring investors into alternative energy. The new report underscores the importance of due diligence in making forays into this type of investments where profits are driven more by hype than by real returns.

The report concludes that the revamped national grid would cost up to $100 billion. On top of that, an additional $720 billion would be required for wind turbines to meet the guidelines of the Obama administration. The overhaul could take at least 15 years, doing little if anything at all to fulfill the mission rebuilding the current wrecked economy.

The Wall Street Journal article reported that the $100 billion would fire the opening shot of a political and legal battle that could stall the massive project indefinitely. “Getting the high-voltage power lines build across the country would require the assent of local authorities and landowners, and might require federal intervention.”

In short, it would constitute a full-employment act for lawyers at almost every level. Since most wind and solar installations are in remote locations, the installation of high-voltage, intelligent transmission lines into the closest grid would fire up landowners and environmentalists look to protect their land and the endangered species affected by the construction.

Once again, investors should be cautious about get-rich-quick schemes in alternative energy. To reiterate our position, renewable energy could one day turn ordinary investors into millionaires. We’re just not sure we’ll live long enough to see it.

The about-face article, which appeared in today’s edition, was written by Kate Galbraith – one of the three new green correspondents the Times has been trumpeting.

The Times reports that wind and solar energy are suffering from the credit crisis and “economic downturn.” These market realities are our core argument against alternative energy for the present time and foreseeable future. You see, the green contingent engages in a dangerous group-think that says if we all hold hands and click our heels, the financial argument for green will make sense in a world of cheap oil and high unemployment.

Apparently, the “feel-good finances” that we’ve been railing against simply aren’t working.

The Times reports “Factories building parts for these industries have announced a wave of layoffs in recent weeks, and trade groups are projecting 30 to 50 percent declines this year in installation of new equipment, barring more help from the government.”

The article quotes Mayor Richard Mattern of Fargo, ND who fell under the green spell. He told Ms. Gailbraith, “I thought if there was any industry that was bulletproof, it was that industry,” he said referring to the wind-turbine factory in his home town, which recently 20% of its workforce.

We take no delight in dancing on the pink slips of the unemployed. Our gripe is with Mayor Mattern himself, who espouses the same claptrap as the Obama administration. The difference is that when the edict comes from Washington, it falls into the category subsidized energy rather than viable business model.

The wind and solar industries are apparently hopeful that President Obama’s green thumb will help them flourish, according to the Times. But as the article states, these renewable energy plans “will take time, and in the interim they [wind and solar companies] are making plans for a dry spell.”

Even tax credits don’t seem to be working. According to the Times, “Banks have invested in renewable energy, lured by the tax credits. But with banks tightly controlling their money and profits, the main task for the companies is to find new sources of investment capital. Wind and solar companies have urged Congress to adopt measures that could help revive the market. But even if a favorable stimulus bill passes, nobody is predicting a swift recovery.”

Again, we do believe that alternative energy is viable – inevitable.  Unfortunately, it’s not the place to put your money today.