I like FAN more than TAN because:
1. I already have a "solar play" in AMAT.
2. Wind is now a mainstream technology, with 35% of new electrical capacity in the U.S. from wind, for the last several years. 5244MW of new wind power was installed in 2007 in the U.S, and 7500MW in 2008. For comparison, photovoltaics had only 190MW new capacity in 2007 (can't find 2008 stats).
3. With today's technology, wind has a cost advantage over solar. Caveat: both technologies are developing rapidly, and costs are falling faster for solar. Another caveat: costs/KW produced is highly dependant on location, so "grid parity" is a broad range: wind will always win over solar in Alaska and Denmark, while solar will be preferred in Arizona and Italy. There's room for both technologies to succeed.
4. In solar, I think much of the industry and its supply chain, is going to be like airlines and memory chips: a brutally cyclical commodity industry, with high capital costs and demand uncertainty. There aren't any big barriers to entry into the polysilicon or solar panel industries, no proprietary technology unavailable to competitors, so high margins will attract new entrants, and then oversupply. I'm hoping an equipment maker like AMAT can make profits from solar, but I'm not sure if anyone else will.
5. The pure-play wind companies are foreign, mainly European, and too small to have their stocks available on U.S. exchanges. If I want to invest in the sector, I have to buy an ETF. With solar, I can pick individual companies.
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The American Wind Energy Association (AWEA) second-quarter report [PDF] predicts that total additions for the year (2008) will come to 7,500 MW, boosting U.S. wind capacity by 45 percent. worldwatch.org
Over the past ten years, global wind energy capacity has continued to grow at an average cumulative rate of more than 32 percent. renewableenergyworld.com
254 megawatts of photovoltaic and concentrating solar power were installed in 2007. This included 150 MW of grid-tied PV, 40 MW off-grid (total 190MW of photovoltaic)...U.S. Installed grid-tied PV grew 45 percent in 2007 from 2006... reuters.com
In 2007, wind attracted more investment than nuclear or hydro, and accounted for more new generation capacity in Europe than any other power source...The U.S. wind energy industry installed 5,244 megawatts (MW) of wind power capacity in 2007 energytoday.com.au
The U.S. electric power industry’s total installed generating capacity was 1,089,807 megawatts (MW) as of December 31, 2007. cleantechnica.com |
