market research – Page 2 – ZacharyShahan.com

Will Solar Stock Returns Keep Growing?

Originally published on Roen Financial Report. Any way you slice it, solar investing has been on a tear for the last year. Of the 69 solar stocks that the Roen Financial Report tracks, three-quarters are up for the year. On average solar stocks have gained 85% for the year, with 60% of solar companies up in the double digits.

Will Solar Stock Returns Keep Growing? was originally published on CleanTechnica.

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By Guest Contributor | March 27, 2014 | Solar Energy |

Germany Fossil Fuel Production Drops, Electricity Exports Soar

Originally published on RenewEconomy. As Germany chancellor Angela Merkel said last month, if Germany can succeed with its ambitious energy transition then other countries could too. “If we succeed, then she (the Energiewende) – and I’m convinced of it – will become another German export hit,” she said. “The world looks with a mixture of a

Germany Fossil Fuel Production Drops, Electricity Exports Soar was originally published on CleanTechnica.

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By Giles Parkinson | March 26, 2014 | Solar Energy, Wind Energy |

6 German Renewable Energy Charts

One of our readers, Kanaga Gnana, recently sent along a November report from the Fraunhofer Institute that has a number of interesting charts in it. I pulled out 6 for sharing here. Have a look. In this first one, you can see CSP vs PV vs CPV levelized cost of energy (LCOE) estimates for Germany:

6 German Renewable Energy Charts was originally published on CleanTechnica.

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By Zachary Shahan | March 25, 2014 | Solar Energy, Wind Energy |

Going Off Grid Nears Tipping Point, Morgan Stanley Reports

Originally published on RenewEconomy. Investment bank Morgan Stanley says it has been overwhelmed by the response to its recent analysis which suggested that the falling costs of both solar modules and battery storage presented a potential tipping point that would encourage huge numbers of homeowners and businesses in the US to go off grid. The

Going Off Grid Nears Tipping Point, Morgan Stanley Reports was originally published on CleanTechnica.

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By Giles Parkinson | March 25, 2014 | Energy Storage, Solar Energy |

EnergyTrends.org Ranks Renewable Energy Leaders

Lisanne Boling, EnergyTrends.org Vermont, Pennsylvania and California ranked as the most friendly to renewable energy according to new rankings from EnergyTrends.org. EnergyTrends.org’s ranking system takes not only state policies into account but also energy consumption and generation data. Other factors considered include growth of renewable energy, state programs for renewable energy, and other factors. Bonus

EnergyTrends.org Ranks Renewable Energy Leaders was originally published on CleanTechnica.

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By Guest Contributor | March 24, 2014 | Media, Solar Energy, Wind Energy |

Commercial Solar Grid Parity Now Reality In Italy, Germany, & Spain

The days when solar power was more expensive than other power sources are quickly passing us by. News out of Europe is that commercial solar power is now at grid parity in some major European countries.

A new study, the PV Grid Parity Monitor, conducted by consulting firm Eclareon, has found that commercial solar power hit grid parity in Italy, Germany, and Spain in 2013. Based on levelized cost of energy (LCOE) calculations, commercial solar now competes with retail electricity in these European countries.

“In countries such as Italy and Germany, both at grid parity and with proper regulation, PV systems for self-consumption represent a viable, cost-effective, and sustainable power generation alternative,” said David Pérez, partner at Eclareon in charge of the study.

As you can see in the chart above, of the 7 countries studied, 4 are yet to hit commercial solar grid parity. Of them, Mexico certainly looks the best-positioned to hit it next, and France seems to be next in line after that.

You can also see large variation in the solar policies of these countries. For example, Spain is infamous now for its retroactive solar feed-in tariff cuts. It has also made it illegal for people to consume electricity they generate from their own solar panels.

Italy and Germany, on the other hand, have largely cut solar feed-in tariffs as initially scheduled. Overall, their solar policies have been much more stable. They also have policies supporting the adoption of energy storage, which is a good supplement to rooftop solar, especially if costs can be brought down as they were with solar panels.

Of course, Brazil and Mexico are seen as having the most supportive policies for solar PV electricity self-consumption.

Notably, LCOE for commercial solar power has been coming down in all 7 countries a great deal, but, as might be expected, they’ve been coming down slowest in the countries already at grid parity, which have more mature solar PV markets and have less incentive to further cut prices:

For more details, check out the full PV Grid Parity Monitor.

This was the first commercial solar grid parity monitor from Eclareon. I’ll keep you up to date with changes in the coming ones.

Commercial Solar Grid Parity Now Reality In Italy, Germany, & Spain was originally published on Solar Love!.

Is Tesla Stock Worth $65, $320, $229, or… ?

Admittedly, this article is jumping off of an article that is ~3 weeks old, which is probably ancient in the world of investing, but I think it’s still useful and interesting for the underlying points.

At the end of February, Adam Jonas of Morgan Stanley projected that Tesla stock could go up to $320 within 12 months, one of the higher estimates on the table, while John Lovallo of BofA Merrill Lynch had its target at $65. Kirk Lindstrom, decided to examine the arguments behind each case over on Seeking Alpha.

Jonas vs Lovallo

Jonas’ $320 was a doubling of Morgan Stanley’s previous target price of $153! From the article:

Key assumptions are:

“Tesla’s annual sales to reach almost 400,000 units by 2020, and around 1.1 million units by 2028.” This would give Tesla a global market share of roughly 0.9% by 2020.
The new “Gigafactory” will cut the cost of the battery nearly in half: “With full-scale battery operations, Tesla battery packs used in the Model S, which currently cost over $15,000, could eventually cost close to $100 per kilowatt hour (kWh), or around $8,500 apiece.”
Much arm-waving about the benefit of being in the Silicon Valley with a lot of us smart people: “Tesla is Ideally Positioned to Lead the Autonomous Cars Segment.”
Opportunity in Energy Storage for the Home and business markets. “Electric utility demand in the US is currently a $400 billion business and a $2 trillion business globally. Morgan Stanley believes the opportunities in this space are boundless.”

Lovallo, meanwhile, thought that there wouldn’t be demand for anywhere close to 500,000 Teslas by 2020. Furthermore, he noted:

“We believe it is important for investors to remember that Tesla is an auto manufacturer, first and foremost, which is an inherently capital intensive business…. In our view, the Gigafactory investment will translate to even more capital intensity and add further pressure to margins and returns.”

Lindstrom’s Follow-up Points

Now, Lindstrom then went further and examined how much growth Tesla really needs to see in order to compete with leading competitors (or the closest thing to them) — Mercedes and BMW.

If we assume that Tesla can meet the bullish forecast for 400,000 cars by 2020, that would put it at number 33 in a world ranking of auto production by manufacture for 2012 according to The International Organization of Motor Vehicle Manufacturers, or OICA.

1.1 million units would place Tesla in 20th place, several slots below Daimler AG (OTCPK:DDAIF) (Mercedes) at #12 and BMW at #14, which I believe are Tesla’s main competition.

Unlike Tesla, BMW is already building over two million autos a year at a profit, while paying a 3% dividend.

According to Bloomberg, BMW has a market cap of 53,917 million euros (about US$74B), with a 2.98% dividend yield and a PEG ratio of 2.5.

If you believe Tesla can grow earnings by 52% a year for five years, then you can make a case based on PEG that it will grow into its current valuation and it would look cheap compared to BMW if it could pay a 3% dividend. Growing earnings at over 50% a year for five years is difficult, especially when the competition is so large.

Indeed, as much as I think Tesla can disrupt the auto industry, that’s essentially betting that almost everything goes right, which is a risky bet. I think I’d take the stance Elon took last year: Tesla investors are putting a lot of faith into Tesla achieving some very considerable targets.

Do I think Tesla won’t achieve them? No, I think Tesla will. But I also wouldn’t put my money on a stock based on such large growth that is based on so many difficult things going well. As much as I am a Tesla fanboy and think I will buy a Tesla someday, I don’t think I could justify such assumptions when there are so many other, safer buys out there.

Other Comments

Before closing, there were a handful of comments under the article that I wanted to highlight. Here’s a big one from user 6012571:

MY roommate’s boyfriend works at TSLA and he’s been selling his shares since they hit $120. Since they have restrictions on the stock they have to wait unitl the restictions come off. He, and I, and her, laugh all the way to the bank.. I bought at $40 and sold out at $180 with no regrets. He has told me all of the other employees dump the stock the first chance they get and are buying condos, houses, ect… NOT TESLA CARS. WALL ST can be so dumb.

Here’s a simple but elegant one, from NetworkBob:

A $30B market cap for a company that produces less than 40K automotive units annually is a stretch.

Here’s on on the other side, from Ford Prefect 1969:

This whole Ford is better than Tesla conversation brings to mind a funny story told by Steve Jobs around the time of his return to Apple.

It went something like this:

“So they told me Apple is like a ship with a hole in the bottom, and they asked me…. could I help to steer it in the right direction”

Tesla is the hole in the bottom of the ship called the auto industry. It really does not matter how big the industry players currently are or what direction they turn in, until such a time as they can address the fact that Tesla is producing vehicles that are far more advanced and desirable and far better value for money in their class, Tesla will continue to flood the ship.

It is not a question of what Tesla is worth. The burden of proof now rests on whether F, GM, TM, etc will be worth anything at all a decade hence.

One thing is for sure, TSLA will be worth a lot more in 10 years time than it is now. The same cannot be said for any other member of the balance of the auto industry.

Another from him:

Not sure that it matters that Tesla does not currently compete with Ford.

It will do, imminently in auto industry timescales, and Ford is nowhere near ready for that.

This: http://bit.ly/1gAn52z

Is a screen grab from a Tesla recruitment video hosted on Vimeo.

It is not a Model S and it fits the description of the Model E. It probably is an early CAD rendering of it.

This thing at $35K with free long distance travel, no pain at the pump and not for profit servicing I think will more than challenge anything from Ford that starts with a base price in excess of $20K and make a laughing stock of the C-Max, Lincoln hybrids and Fusion energi products at around the same sticker price.

It will take a while for Tesla to gain mega scale production, but I cannot see anything on the horizon to prevent Tesla behaving as a monopoly and absorbing market share absolutely as fast as practicality and cash flows permit. That is another problem for the current crop of big auto. Tesla’s business model allows it to expand cash flow positive in excess of 50% annually and I believe 100% without burning any cash.

Evidently it also has as much access to capital as it wants. $2bn is nothing, I was amazed that it asked for so little. I am sure $5 bn would have been no problem either. Think on that when in less than 2 years Tesla reports that it has a million reservations for the car in the picture above.

That is the risk Ford and others are facing, the auto market is Tesla’s playground now. That much is clear for the sake of looking. Relative production volumes at the dawn of massive change are a smoke screen.

DeepValueLover gets to the heart of the matter, imho:

If Tesla’s current price is based on the rate of growth then why is the price 2.56 higher than that pace of growth?

…and that is with Tesla growing earnings at 100% per year.

The stock price is ~2x the value of future growth.

There will be a SEVERE pullback…probably this year.

But I’ll also at Ford Prefect 1969‘s response to that comment:

@DeepValueLover

I think the starry eyed shorts will be SEVERLEY disappointed.

There may well be a gradual tapering of earnings multiples over a period of years. Set against that is the fact that the forward looking statements of this company are ridiculously conservative.

The big money knows it, that $2bn of bonds targeting $360 is big money.

Closing Look At Tesla & A Few Stocks

Here are the market caps for a handful of auto companies as I write this (all values are in USD):

And here are 2013 vehicle sales for those companies (in millions) as well as a 500,000 estimate for Tesla in 2020:

Is Tesla Stock Worth $65, $320, $229, or… ? was originally published on EV Obsession.

Why Solar Beats Out Other Stocks

Originally published on RenewEconomy. Solar stocks are certainly having their place in the sun, outperforming all other sub-indices in the global stock market to deliver the best returns over the past 15 months. After “taking off” in mid 2013, the 32 stocks in the global solar index monitored by global investment bank HSBC gained 65

Why Solar Beats Out Other Stocks was originally published on CleanTechnica.

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By Giles Parkinson | March 22, 2014 | Solar Energy |

The Non-Food Biofuel Sector Should Grow Significantly, Lux Reports

Originally Published in the ECOreport.

The biofuel industry has been enjoying a 19.6% annual growth since 2005. That is about to change. The World’s 53.2 billion gallon biofuel industry could grow to over 60 billion gallons during the next few years. Much of this will come from riskier next generation technologies.

Approximately 65.9% of global biofuel capacity in 2013 was ethanol, and this should increase slightly over the next few years.

Biodiesel shall continue to be the worlds’ second largest biofuel, and capacity should reach around 18.6 billion gallons a year by 2017.

The strongest growth will be in products like non-food diesel, butanol, biojet, and biocrude, which should increase at a rate of about 18.7% a year and control 3.3% of the market by 2017.

“Next-generation feedstocks like waste oils and cellulosic biomass are not tied up in the food supply and could unlock significant economic advantages, assuming novel conversions commercialize,” said Andrew Soare, Lux Research Senior Analyst and the lead author of the report titled, “Emerging Feedstocks and Fuels Spark Biofuel Capacity Expansion through 2017.”

“Meanwhile, next-generation fuels like renewable diesel will break down current barriers and drive long-term biofuel capacity expansion,” he added.

“Of the 782 MGY of announced cellulosic ethanol capacity, we expect 384 MGY to come to fruition, led by companies such as Beta Renewables, POET-DSM, and Abengoa,” the report states. “Renewable diesel from waste will emerge as a key biofuel process, while butanol and biocrude producers have the flexibility to sell into the chemicals market, and their effect on overall biofuel capacity remains minor.”

Close to 80% of the renewable diesel capacity over the next few years is already online, with players like Neste Oil and Diamond Green Diesel leading the market.

Gevo owns the only existent butanol facility and that is expected to come online soon.

AltAir has signed a 15 million gallon biojet contract with United Airlines. While this amount is relatively insignificant, it could signal the beginning of a shift in the industry.

Algal biofuels, such as Sapphire Energy’s much talked about green crude, are still years away from making a significant contribution to the market.

Americas’ biofuel industry enjoys high utilization and significant export, but is still threatened by regulatory instability.

There should be considerable growth in Europe, which has a 10% blending target for 2020, and in China. Non-food biofuels could meet China’s energy needs.

Lux Research analysts compiled a database of over 1,700 biofuel production facilities in 82 countries for this study

The report, “Emerging Feedstocks and Fuels Spark Biofuel Capacity Expansion through 2017,” is part of the Lux Research Alternative Fuels Intelligence service.

The Non-Food Biofuel Sector Should Grow Significantly, Lux Reports was originally published on CleanTechnica. To read more from CleanTechnica, join over 50,000 other subscribers: Google+ | Email | Facebook | RSS | Twitter.

This New Electric Car Is Demolishing The Competition In China

It’s hard to keep up with the Chinese electric car market — it’s harder to find a good, reliable source for Chinese EV news. Oh yeah, wait, there were hardly any EV sales in China last year — not much has been going on there. But things may be changing fast. The BYD Qin, which

This New Electric Car Is Demolishing The Competition In China was originally published on CleanTechnica.

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By Zachary Shahan | March 21, 2014 | Electric Cars |