Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Solar investment-case-mac-solar

23,799 views

Published on

Solar investment-case-mac-solar

  • Paid To Write? Earn up to $200/day on with simple writing jobs. ♣♣♣ http://t.cn/AieXSfKU
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here

Solar investment-case-mac-solar

  1. 1. The Investment Case for Solar Tracking index for Guggenheim Solar ETF (NYSE ARCA: TAN) www.MACsolarindex.com
  2. 2. Long-Term Bullish Factors for Solar Sector • Room for double-digit growth for decades; world needs $4 trillion of new electricity generation through 2030; solar is only 0.3% of U.S. electricity generation now. • Industry has matured after shake-out; survivors are established with best technology and scale; margins are recovering; supply now better matched to demand. • Solar panel demand has persistently surprised to the upside • Solar costs are falling due to improved technology and lower system/installation costs; grid parity is being reached in a progressively larger number of markets. Lower solar cost means increased demand, bigger target market, more unit sales, more profit.
  3. 3. Solar – Long-term Solution for Sustainable Electricity Advantages • Clean & safe electricity solution; unlike nuclear, coal, natural gas • Distributed Generation – avoid grid and utility price increases • Scalable – small or large; residential, commercial buildings, utility. Disadvantages • Day-Use Only – but matches peak electricity usage times; add battery backup • Variable solar intensity – but still economical in northern climes • Cost – Falling fast; grid parity in growing number of areas
  4. 4. Solar PV and Thermal could together become the world’s largest electricity source by 2050 (IEA) Solar PV and Solar Thermal Energy (STE) could together grow from current level of less than 1% to 26% of global energy share by 2050, thus becoming the world’s largest source of electricity. Source: International Energy Agency Technology Roadmaps for Solar Electricity (2014 Edition).
  5. 5. High Growth Industry: 44% Annual Growth Last 5 Years
  6. 6. Leaders: China, Japan, U.S. Take Over From Europe
  7. 7. Solar Installs are Diversifying Geographically
  8. 8. China Solar Developments: •Strong Chinese government support for solar to promote environment and to support top Chinese solar companies and jobs •Government 2014 target is 13 GW •Chinese installs driven by 14-16¢/kWh feed-in tariff (FIT) for utility solar and FIT for distributed generation. •Government has solar company rationalization program to weed out weak players.
  9. 9. Japan Solar Developments: •Fukushima nuclear disaster (Mar-2011) prompted aggressive government push for solar •Highest feed-in tariff in the world at 35-40 ¢/kWh •Japan on track for 10-12 GW of new solar installs in 2014 although some bottlenecks have recently emerged
  10. 10. Europe Solar Developments: •Germany still has world’s largest amount of installed solar •European solar installs have declined due to reduced subsidy support
  11. 11. U.S. Solar Developments: •Top PV states: CA, AZ, NJ, NV, CO •Residential – gold rush for customers due to zero-down and favorable economics. •Solar Securitization: SolarCity sold $54 million solar-lease-backed notes in Nov 13 at 4.8% with investment grade of BBB+. •Easier financing and reduced capital costs (ABS, Yieldcos) reduces solar financing costs. Yieldcos: TerraForm Power (TERP), Abengoa Yield (ABY). •Federal ITC falls to 10% in 2017 from current 30%, leading to 2014-16 install rush to capture 5 cent LCOE advantage; but Deutsche Bank still expects 36 states at grid parity in 2017 with 10% ITC.
  12. 12. Solar Pricing – Polysilicon Has Stabilized Above $20/kg
  13. 13. Solar Pricing – Modules Have Stabilized Near 70¢/watt
  14. 14. Solar Cell Costs Have Dropped 99% Since 1970s
  15. 15. Steady Percentage Solar Cell Price Decline Due to Technology Advances and Scale Manufacturing
  16. 16. Solar Scientific Research Continues at Rapid Pace to Reduce Solar Costs and Increase Efficiency
  17. 17. Solar Pricing Dropped by Half in Past 3 Years to 12-14¢/kWh Source: “Cost of Energy Technologies,” by World Energy Council & Bloomberg Energy Finance Cost reductions shifting to balance of system costs, e.g., inverters, hardware, install, customer acquisition and financing costs.
  18. 18. Many PV Markets Now Below Grid Parity Without Subsidies Source: “2014 Outlook: Let the Second Gold Rush Begin,” Deutsche Bank Solar Industry Update, 6-Jan-2014 Plus 10 U.S. states at grid parity (with subsidies) at 11-15 ¢/kWh: AZ, CA, CT, HI, NV, NH, NJ, NM, NY, VT.
  19. 19. Solar Shakeout Is Ending – Profit Margin Recovery
  20. 20. Solar Performance – Recovering After Shakeout
  21. 21. MAC Solar Index - Methodology • Global solar energy index of qualified solar stocks listed on exchanges in developed countries. • Passive index of qualified solar stocks – no stock picking. • Modified market cap weighting. • Liquidity minimums to add a stock: $150 million market cap and $2 million in average daily trading value. • Exposure Factor 1.0 for pure-play solar stocks (solar revenue above 2/3); Exposure factor of 0.5 for medium-play stocks (1/3 to 2/3 solar revenue) (AEIS, Abengoa Yield, China Singyes, 5N Plus). • Quarterly index review on third Friday of March, June, Sep, Dec.
  22. 22. Advantages of Index/ETF Over Individual Solar Stocks • Own the global solar sector in one trade – reduced transaction costs • Long track record – 6+ year history (launched in April 2008) • Dynamic Portfolio – add solar growth stocks and drop losers • Diversification – across geography, technology, value chain
  23. 23. Diversification Across Value Chain Manufacturer/Project Developer First Solar SunEdison Canadian Solar Yingli Green Energy Trina Solar Sunpower Hanergy Solar Group JinkoSolar JA Solar Holdings Shunfeng Photovoltaic China Singyes Solar Renesola Hanwha SolarOne Comtec Solar Systems Installer/Project Developer Solarcity Vivent Solar Polysilicon GCL-Poly Energy Holdings REC Silicon Daqo New Energy Thin Film Materials 5N Plus Capital Equipment Meyer Burger Technology Solar Panel Components Xinyi Solar Holdings Inverters SMA Solar Technology Advanced Energy Industries Enphase Energy YieldCos TerraForm Power Abengoa Yield
  24. 24. Diversification Across Geography By Company Headquarters: • China: 14 companies • North America: 8 companies • Europe: 5 companies By Stock Listing: •North America: 17 companies •Hong Kong: 6 companies •Europe: 4 companies
  25. 25. For More Information • Solar Sector Research at: www.macsolarindex.com • List of solar information sources at: www.macsolarindex.com/resources

×