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Wednesday, November 19, 2008

Solar power - Huge Market Opportunities

Globally, energy is fast emerging as a critical issue, especially as existing power generation options have limitations in terms of growth potential and long-term sustenance. solar power is fast emerging as the most viable and eco-friendly power generation option for tomorrow—with no moving parts, no noise and zero emissions.

With the Sun supplying 10,000 times the amount of energy needed every year by Earth, and with technological breakthroughs fast lowering harnessing and distribution costs, solar power is fast emerging as the most viable and eco-friendly power generation option for tomorrow—with no moving parts, no noise and zero emissions.

Solar Market grew by 30% over in the last 18 years. In Year 2006, the global market for PV energy was 2 GW, grew by 41% compared to the previous year. Market is projected to grow from $15.6 Billion in 2006 to $69.3 Billion by 2015. Further California Solar Initiative should add another incremental $13.2 Billion cumulatively.

Two companies we know well and have potential to become Photo voltaic segment leaders and so the future Multi bagger stocks are:
Moser Baer India Limited...Click Here to read research report
XL Telecom & Energy ... Click Here to read more

The PV space is expected to grow five-fold to a global market size of Rs 300,000 crore ($70 billion) by Year 2015 as per Clean Edge Energy research. As the group is one of the early entrants in this space, and having exposure to domestic and international markets since 1994, Saptashva is well-positioned to leverage this explosive growth curve.

UBS’s global demand estimate is for solar electricity to grow from 5GW in 2008 to 22GW by 2012 (a 46% CAGR). It expects Spain, Italy, and France to increase to 35% by 2012 (up from 27% in 2007) of the global market and drive solar growth in the near term. Its estimate for global solar demand in 2010 is 10GW, which is the base case scenario. The aggressive case assumes faster adoption of solar PV in key growth markets of Spain and the US, with the approval of higher feed-in tariffs in Spain and passage of an energy bill in the US, which includes the extension of Solar Investment Tax Credits with removal of the residential cap and utility exemption.

Given the uncertainty of solar in the US market in 2009 and 2010, UBS believes it is more prudent to assume the conservative scenario. However, if the US Energy Bill passes with the solar investment tax credits included, UBS believes the more likely scenario would be closer to its aggressive case of 13GW by 2010.

The conservative scenario assumes a five-year CAGR of 30%, resulting in 5.5GW by 2010, and the aggressive scenario assumes a five-year CAGR of 55%, resulting in 13GW in 2010. The conservative scenario is based on sustaining the 2002-07 solar CAGR of 30%. Global solar demand reached 2GW in 2006, and UBS believes demand could grow by 70% in 2007 to reach 3.4GW lead by demand growth in Spain and Germany. It estimates that global demand will grow at a steady rate above 40% year over year until 2011, as solar PV generated electricity cost approaches grid electricity in regions with high retail electricity rates and high solar irradiance.

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