3 Signs Your Solar Investment Is All Wrong

2013 was an enormous growth year for solar -- but not everyone's in on it.

May 4, 2014 at 10:10AM

Solar Fix

Source: PG&E. 

Solar energy is soaring, and 2013 was no exception. A new report from the Solar Electric Power Association reveals three of the latest solar trends, and they've got little to do with residential rooftops. Here's what you need to know.

1. 2013 was a stellar year for solar
It's been a long time coming, but solar is finally getting some serious scale. Before 2013, solar capacity clocked in at 6,298 MW. While that might seem like an impressive number, it accounts for around 1.3% of our nation's total 467,900 MW of generation capacity. 

But with 4,211 MW of new capacity added in 2013 alone, that percentage jumped to around 2.2%. And while that's hardly on par with wind energy or stalwarts like nuclear, coal, and natural gas, it's making solar increasingly hard to sneeze at.

2. Utilities are running the solar show
Investors are pouring money into solar growth stocks that promise to blanket every residential rooftop with a solar panel. And while this may someday be the case, utilities have finally gotten the message -- and they're not leaving solar generation to regular citizens. In 2013, utility-scale solar installations maxed out at 2,627 MW -- nearly four times residential's relatively lackluster 679 MW. The U.S. Energy Information Administration's (EIA) numbers put utility capacity additions even higher (2,959 MW), but the additions are enormous, either way.

Utility Capacity Additions

Source: EIA.gov. 

3. Not everyone's stoked about solar
Despite federal tax credits, improved technology, and increasingly expensive traditional fuels, solar isn't for everyone. California-based PG&E (NYSE:PCG) topped the list of utilities for 2013 solar capacity additions, increasing its stake by a whopping 1,471 MW. With Sempra Energy's (NYSE:SRE) San Diego Gas & Electric Company in second place with 643 MW, it's easy enough to see where the sun's shining brightest. 

California's solar capacity clocks in at 5,537 MW -- just over half that of the country's entire capacity. Compare that to 10th-place Florida, which boasts just 188 MW, and the story of concentrated solar growth becomes increasingly clear. 

California's own sunny weather creates a good starting point for solar, but it's the state's regulators and support structure that have truly pushed its capacity forward. The California Solar Initiative has set a goal of 3,000 new MW of solar power by 2017, and the California Public Utilities Commission has allocated over $2.1 billion in incentives to boost capacity. 

Where to invest?
If you're looking for a solar investment with steadier growth and smaller risk than rooftop start-ups, utilities are an increasingly attractive option. Their regulated earnings, long-term power purchase agreements, and pre-scaled infrastructure give investors the option of a stable solar stake. Utilities have shown solar investors they mean business -- and in 2014 and beyond, it could prove to be a profitable business indeed.

Top dividend stocks for the next decade
With a solar utility stock in your portfolio, you're also adding a lucrative dividend to your own cash flow. The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Justin Loiseau has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers