Enterprising Investor Forum

Profits from the Sun? Tuesday, July 22, 2008

We hope that most of you regularly pick up a copy of Barron’s but if you haven’t gone through the latest edition, we recommend you pick it up and turn to the article “Forecast: Clouds with Sunshine” written by Eric J. Savitz.

The articles gives a very good and comprehensive update on the solar industry, it’s difficulties and future prospects. As most people know, the big challenge is to produce solar energy at a lower cost than that of other alternative fuels. Furthermore, state aids and overall hype means that this sector has become very crowded and might have gotten a bit ahead of itself for the time being.

No doubt that long-term this will be a winning bet but with governments like Germany and Spain (the two biggest markets worldwide) reducing aids and other short-term disappointments, investors will have to carefully decide with which companies they want to place their bets.