After a Beating, Solar Energy Is Ready to Shine

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". . .$20 billion in tax incentives for renewable energy by the Obama administration, is the ultimate boost to the solar sector."

The crashing oil price is one reason behind selloff in the solar stocks, as many believe that solar energy has to compete with crude generated electricity. The fact is that the cost of solar energy has nothing to do with crude price. With solar wafer price coming down sharply, silicon-based PV panel makers such as Canadian Solar and Suntech Power are here to benefit in 2009. The second reason investors avoided solar stocks is the whole market condition was worsening during the last six months. Every single sector was experiencing selloff, including the solar sector.

With stimulus money under the way into the economy, the demand of crude is rising. The crude price has jumped off its low and is approaching $40 per barrel. Most importantly, the $43B investment into energy technology, including $20 billion in tax incentives for renewable energy by the Obama administration, is the ultimate boost to the solar sector. Investors should notice that the European total solar incentive of the last five years is estimated at less than $5B. In other words, $20B in the stimulus is enormous for this industry, on top of that, we have the Chinese stimulus package, in which over RMB$100B (~US$13B) is dedicated to renewable energy.

We are in an unprecedented age of green energy with governments around the globe pledged to support renewable energy.

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