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Solar demand is picking up in the U.S. just in time to take some of the pressure off Europe. In the first quarter, solar installations grew 66% from a year ago to 252 MW, and the U.S. now has 2.3 GW of solar power connected to the grid. And that's without a cohesive national plan for renewable energy.
But one demand source is growing into a true force: the U.S. military.
The U.S. Army has created the Energy Initiatives Office that's charged with building enough renewable energy for the Army to get 25% of its power from renewable sources by 2025. Early numbers indicate that $7.1 billion will be spent over 10 years and that 2.1 million MW hours will be generated annually.
The military may not initially seem like a perfect demand source for renewable energy and some will point to political incentives, but on closer look the military is perfect for renewable energy. In the field, energy is a commodity the military can't do without, and lives are risked to protect fuel lines and oil and gas convoys.
Secretary of the Navy Ray Mabus has been a big renewable energy supporter, noting that lives are put in jeopardy to protect energy sources. If getting power from solar, wind, or other renewables can save a few people, it's in the military's best interest.
So the question for investors is: Who becomes a big supplier to the military?
For forward bases, which need to remain energy independent, solar power seems like the most logical choice. Wind is too difficult to install, while biomass, geothermal, and other renewables would be nearly impossible to make feasible.
First Solar (Nasdaq: FSLR ) and SunPower (Nasdaq: SPWRA ) come to mind as probably winners because they're U.S. based and would likely get some sort of preferential treatment. And Energy Conversion Devices may make sense for its thin, light solar panels.
But A123 Systems (Nasdaq: AONE ) may be a company to keep an eye on. A123 is working on energy storage with grid operators, something the Department of Defense is very interested in. If solar power is indeed the military's power of choice, it will need to be stored somehow.
In a tough quarter for solar manufacturers, it's good to see both that U.S. demand is growing and that a big demand source like the military understands the virtues of renewable energy. Stay on top of what happens with all of our Foolish analysis in one easy spot with My Watchlist.