Researching Solar for Investment Purposes Proves Difficult

June 4th, 2008

I have a problem.  I have some extra money (not very much - a couple of grand) I want to invest and I really want to invest in a promising solar company - the kind of solar company that is not only Western based, but has a technological edge, leads the pack and yet is still small enough to have some massive growth ahead.  Here’s the problem: I’ve identified two really good solar companies I’m interested in but neither is publicly traded!  Argh.  Guess those private equity guys have it much better than we do.  They not only get to invest in private companies with their deep pockets, but they can also take public companies private if they choose to.  Now you’re probably wondering the names of these companies and what makes them so great?  Sterling Energy Systems and Nanosolar. 

Sterling Energy Systems designs and manufactures sterling engines that uses concentrating solar power as the energy source.  It’s basically a bunch of mirrors pointed at a sterling engine.  It’s extremely efficient and they recently achieved 31.25% conversion efficiency on a solar to grid system.  That is a world record.  SES has two signed contracts (one with Southern California Edison and one with San Diego Gas & Electric) for 1,750 megawatts of power.  These are the two largest solar power contracts in the world and will require 70,000 of SES’s dishes.  The 500 megawatt contract with Southern California Edison will be on 4,500 acres of land.  Oh, and the technology is actually grid competitive - yes, it can make electricity competitively, and in an old Inc. Magazine article from 2005, the founder claimed it can produce electricity for under 8 cents per kilowatt, but refused to say how much under… This is a company with 20 year contracts in hand and is able to make electricity competitively using the sun.  I love it.  Too bad it isn’t public.  Though when I contacted them back in 2005, they had been discussing an IPO in 2008.  But that was nothing more than hearsay from several years ago.  I’ve not heard anything new on an IPO.

Nanosolar is a world leader in thin film solar - a really interesting technology that I think will ultimately make the big fat silicone solar panels of the past obsolete.  They claim to be able to print thin film in an almost printing press fashion to manufacture and sell it for $.99 per watt.  That’s really low and would make solar competitive.  The material is thin enough to be built into many building materials as well.  This is a promising technology and it’s here and being produced… Once again, too bad it isn’t public.  It probably will go public, but not until the company is worth so much money it isn’t necessarily a small cap.  With big name investors like Google founder’s Sergey Brin and Carl & Larry Page and eBay founder Jeff Skoll, and many others, you can bet your money they won’t go public a minute too early - they’ll unlock every penny they can.  By the time a company like this goes public all the big growth is gone.  I’m not saying it won’t be a good investment or grow - it will.  I’m just saying I want in a little earlier -but don’t we all.  I guess we’ll fight over the scraps.   

Now that I’ve found two great companies I really like, I’ll add them to my IPO watch-list.  My next task is to actually find an investment I can make that has lots of upside potential.  I’m looking for a small cap company located somewhere in the Western world that has a competitive solar technology and is currently building it’s manufacturing facilities to put the technology into commercialization.  There are actually quite a few different companies that may fit the bill but I really have to do some more research.  Stay tuned. 

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