Warren Buffett just made his second sizeable investment in the U.S. solar industry this month, adding more fuel to the debate over whether U.S. solar is on the cusp of a comeback. Berkshire Hathaway's MidAmerican Energy Holdings bought a 49% stake in NRG Energy's
Last week Kapitall reported on Buffett's first-ever investment in U.S. solar, where MidAmerican Energy Holdings bought the $2 billion Topaz power plant from First Solar
Tax incentives were cited by analysts as one of the reasons for last week's purchase. According to Jefferies analyst Gerard Reid, "tax credits for wind in the U.S. expire at the end of next year, while solar ones run till 2015."
Buffett's most recent purchase may reflect the same thing, however according to analyst at Mizuho Securities Paul Clegg, Buffett's foray into solar shows that utility-scale power plants offer good returns with little downside risk.
According to Bloomberg, competition from China has forced U.S. solar companies such as First Solar to shift from selling panels to rooftop developers to building larger scale power plants.
Warren Buffett is one of the world's most renowned investors -- where he sees value, others follow. Do you think his investments will cause others to reevaluate the clean energy market?
To help you explore the market, we ran a screen on clean energy stocks for those trading well below their most pessimistic analyst target prices, possibly indicating that these stocks are undervalued.
List sorted by potential upside implied by target price. (Click here to access free, interactive tools to analyze these ideas.)
1. Maxwell Technologies
3. Newpark Resources
4. Progressive Waste Solutions
5. Clean Energy Fuels
8. Waste Connections
10. Green Plains Renewable Energy
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Alexander Crawford does not own any of the shares mentioned above. Target price data sourced from Thomson/First Call (via Yahoo! Finance)