Marc Cuniberti: Shining a light on solar
June 3, 2018
Investing in solar can be done actually in two ways. You can buy or rent a system to provide power to your workplace or abode or add the stocks of solar companies to your investment portfolio. Adding a solar system will help lower both your electric bill and the carbon emissions in our environment.
I actually installed a system on my home about three years ago using the lease system program. I paid nothing for the equipment and now just pay a flat fee to the solar company for each Kilowatt it generates.
The price I pay is a lot lower than the upper tiers of charges PG&E bangs me for so it's a win-win for myself and the company that put my system in. I also pay no maintenance fees and if it breaks they fix it at their expense. Pretty neat deal if I do say so myself.
Although solar stocks have gone up and down with no real clues as to where they might go next, and with a spotty history of success as to returning investor dollars with any positive returns, the latest statistics might point to a change of direction in the future for those throwing their hard earned investment dollars in the suns direction.
California ranks number five in the world geographies in solar capacity. Not too surprising given the number of tree huggers living in the state, as well as having lots of sunshine and also being geographically ginormous.
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The statistic certainly adds an even brighter light to an already sunny state.
Adding even more fuel to the solar fire (pun intended) is the latest ruling from the California Energy Commission which mandated all newly constructed homes have solar panels.
There are of course hooks, crooks and stipulations surrounding the new regulation, but in a nutshell the amount of solar powered homes is expected to jump six-fold by the year 2020. Putting that in real numbers, today about 15,000 new homes and 135,000 occupied homes are fitted each annually. Those numbers jump to an estimated 100,000 new systems and overall about 235,000 in total.
Of course, few things come without a cost and new home owners will pony up an additional $10,000 or more to comply with the mandate.
What this means for homebuilders
The homebuilders meanwhile aren't too wild about having to raise prices to the home buying public, especially sensitive to the latest figures just out on the number of homes being sold coupled with interest rates on the rise. All this likely spells more difficulty for the homebuilders and it remains to be seen just how these companies will cope with the challenges.
Of course there is cheering and jeering from both sides of the room once again as governmental mandates, which alter costs and charges to consumers and companies, always manage to stir the pot of debate and this latest regulation is no exception.
No doubt the environmental advocates will cheer on the regulation as a victory for their side. Meanwhile, the free market proponents will tout this is just another example of government interference and meddling, all the while adding to the ever rising cost of living for the average Joe, not to mention the loss of jobs in the homebuilding industry should sales slow because of it.
No matter where you stand on the issue, no doubt there will be more solar systems sold and that means the companies that make all things solar may reap the rewards. That said, investing is never that easy, and be aware that the news is already public and that means it could already be baked into the proverbial cake of stock prices.
Additionally, the history of solar upstarts is littered with dead bodies and one only needs to look at the last time government dipped its hands into solar when the Obama administration in early 2009 loaned Solyndra $535 million of stimulus money only to see those funds disappear down the rat hole of a bankruptcy filing.
More often they many care to admit, where the government goes, private business often follows in straitjackets, meaning central planning and private enterprise usually don't mix well.
Investors should heed the not so obvious caveats and use more than due diligence before following the governments lead into solar with their investing dollars.
This is not a solicitation or recommendation to buy or sell any securities. Investing involves risk. You can lose money. This article expresses the opinions of Marc Cuniberti and are opinions only and should not be construed or acted upon as individual investment advice. He is an Investment Advisor Representative through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Marc can be contacted at SMC Wealth Management, 164 Maple St #1, Auburn, or at 530-559-1214. SMC and Cambridge are not affiliated. His website is http://www.moneymanagementradio.com
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