Saturday, September 18, 2010

Solar Stocks Singled Out by the Stimulus

So the stimulus is spending over $50 billion on clean technology in an effort to increase our use of renewable energy and improve our decrepit power grid.

Now what?

Most of the top stocks pick that should've received a nice bump on word of billions of dollars of federal funding have mostly fallen flat. Take a look:

U.S. clean infrastructure stocks

Of course, there was (and still is) plenty of money to be made by using the stimulus to your benefit. Some of those hot stocks gained 85% or more from early December to early January in anticipation of a "green" tinted stimulus package.

And green tinted it was!

But a lackluster bank plan, mounting foreclosures, and rising employment have diminished the response in the stock market, to say the least. Yesterday, broad market indicators slid to their lowest levels in 12 years—talk about a lost decade.

Not to worry. The green provisions in the stimulus are too large for the market to ignore. The best stock that should've risen on its passing have been swept up in yet another market sell-off beyond their control, presenting us with the perfect opportunity to buy in and ride them up when the panic selling subsides.

And I have the perfect plan to do it.

Stimulus Guarantees Solar Winners

It may not be the pure free market economics we're used to, but desperate times...

The government has clearly selected the industries it feels need the most attention and can provide the most benefit to be winners in this plan. By leveraging what is now law—a guaranteed market—you can walk away with certain profits.

Now that the language of the bill is clear, I've been able to figure out not only which sectors will benefit, but exactly which companies are about to get a distinct business advantage.

Solar, thanks to strong lobbying efforts, is in a particularly sweet spot.

Investors are now able to take a 30% federal refund on the value of a new installation before deducting any state incentives. So a theoretical $100.00 dollar solar system in North Carolina (35% state credit) now only costs the investor $35.00—because both federal and state incentives are now calculated from the full price. Best part is, those federal incentives have no cap and the project need only be finished by 2017 to qualify.

This incentive alone will rapidly increase solar demand as homeowners and investors alike rush to get discounts on solar installations on the taxpayers' dime. But there are many more solar provisions in the stimulus that will only magnify the gains that can be taken on the right solar stocks investing.

There's also $6 billion dedicated to paying the fees on guaranteed loans. This clause is aimed at encouraging banks to make loans for renewable projects. Most estimates say that $6 billion in guarantees will translate into $60 in new loans.

And Congress didn't stop there.

They also guaranteed profits for you by setting aside $5.5 billion so federal buildings (including schools) can increase energy efficiency and their use of renewable energy. The U.S. General Services Administration (GSA) estimates that 75% of the projects that receive this funding will use solar technology.

The only catch? To qualify for those incentives projects must use solar panels that are GSA-listed. This is also known as the "Buy American" clause. And it's precisely how I know exactly which stocks will benefit the most.

Solar Winners Guarantee Profits

That tiny little "Buy American" clause has some pretty heavy investment implications. While GSA-listed solar panels can also come from the EU, Japan, Korea, and Singapore, it's most likely that the bulk of solar panels installed the next few years will be American-made.

Massachusetts-based Evergreen Solar (NASDAQ: ESLR) will be a likely beneficiary. Down nearly 90% in the past six months, any benefit from the stimulus could be worth a fortune.

Even so, I'm more interested in the three other solar stocks that accompany Evergreen in this chart:

buy american solar stocks

They've been able to stay a bit more buoyant than ESLR over the past few months (If you can call down ~60% "more buoyant."), implying they have more inherent strength and intrinsic value.

I can tell you for sure that they have much higher sales, production, and brand recognition, and will be the "go to" manufacturers of solar panels over the next few years.

And if all the previously listed benefits weren't already enough, the stimulus also includes a manufacturing tax credit that will allow companies to knock 20% off the cost of building a wind turbine plant or solar cell or panel plant here in the States. So not only do investors get a boosted discount for using American-made panels, but the companies making the panels get a 20% tax credit to build factories to crank out even more panels.

It's the motherload of federal stimuli! And investing now in the companies that will prosper could deliver you a fortune. I've outlined them all for you in the new report, "Buy American: Three Solar Stocks for Profit."

The companies I'm talking about here—stalwarts of the solar industry—are down over 50% since last September. One of them has gone from over $85.00 to just about $30.00 as economic worry hit the country and the rest of the world. That's a 65% loss.

Getting in now and riding it back up to $85.00 or higher could be a 280% gain in your portfolio. And my new report offers you a way to do that three times over, offering profit potential of several hundred percent.

But you have to hurry. In my haste to find profit opportunities arising from the stimulus, I've beaten Wall Street wonks to the punch. Of course, they'll find out about this opportunity and exploit it as they always do. And when that happens, it could be too late for the average investor.

By getting access to my new report today, you can take your position early and ride the wave as the rest of Wall Street tries to play catch-up.

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