The Desert Sunlight Solar Farm, which is billed as Southern California’s largest solar plant, was dedicated with much fanfare this week by U.S. Secretary of the Interior Sally Jewell. The solar farm, developed by First Solar Inc. (Nasdaq: FSLR) in a joint venture backed by NextEra Energy Resources, Sumitomo Corp. of America, GE Energy Financial Services and public funding, will generate enough energy to power 160,000 homes.
The 550-megawatt project includes 8 million photovoltaic solar panels and covers six square miles of public land in the desert area east of Los Angeles.
According to the First Solar website, the project is expected to offset “300,000 metric tons of carbon dioxide per year—the equivalent of taking about 60,000 cars off the road.” While the project backers were optimistic, the new project opens at a time when the “uncertainty for future utility-scale solar development in California, which has been slowing in recent years as federal assistance begins to disappear and investor interest fades,” noted the Los Angeles Times.
The loan program from the U.S. Department of Energy in which the project received $1.46 billion, partially guaranteed by a group of private investors, has since been disbanded, according to the Times report.
Another problem confronting large projects like this is the availability of land. Also, the current 30 percent federal income tax credit is slated to be cut to 10 percent at the end of 2016, although Jewell told the Times she will urge Congress to extend the tax credit “just as it has with fossil fuel industries.”
In our last look at small cap solar companies back in November, we noted that the costs of solar power have declined enough that in some areas it is cheaper than coal or natural gas, which many experts consider a tipping point for its bright future.
Let’s see how the three small cap solar companies we have been watching have fared over the past nearly three months. Some of the stronger solar stocks got a boost in early February when the price of oil rebounded, prompting renewed demand for alternative energy.
Canadian Solar Inc. (Nasdaq: CSIQ), based in Ontario, Canada, manufactures high efficiency solar cells, solar modules, solar power systems and off-grid solar power application solutions. Back on Feb. 4, CSIQ stock soared more than 25 percent based on its plans to acquire Recurrent Energy, a leading solar energy developer, from Sharp Corporation. Back on Nov. 26 CSIQ closed at $27.47 with a market cap of $1.5 billion. It closed Feb. 10 at $27.13, up 46 cents for the day, with a market cap of $1.49 billion. Its 52-week trading range is $18.68 – $44.50.
China-based Suntech Power Holdings (NYSE: STPFQ, http://am.suntech-power.com), which bills itself as the world’s largest producer of solar panels, was hit back in December by hefty tariffs from the U.S. government on solar products from China and Taiwan. Suntech closed at $0.16 when we last checked back on Nov. 26 at $0.16 with a market cap of $29 million. On Feb. 10 it closed at $0.07, no change for the day, with a market cap of $12 million. Its 52-week trading range is $0.6 – $0.55.
China-based Yingli Green Energy Co. (NYSE: YGE) makes photovoltaic products including cells, modules and systems. YGE got a bit of a boost earlier this month with the rising oil prices. It closed Nov. 26 at $2.98 with a market cap of $518 million. YGE closed Feb. 10 at $2.03, down 7 cents for the day, with a market cap of $369 million. Its 52-week trading range is $1.86 – $7.15.