Japan Nuclear Woes Boost Solar Energy Industry
03-15-2011
No one is celebrating the dire condition of the nuclear reactors in Japan and the risk to the people of Japan. The specter of nuclear disaster loom ever so large and everyone is hoping and praying that the Japanese will be able to contain the nuclear reactors before a meltdown. But as the events in Japan unfold, the investment community is already looking for cover.
Nuclear energy, which looked like it was poised to make a major comeback in industrialized countries throughout the world, is now the subject of tight scrutiny-and investors are selling as quickly as they can. This from the Wall Street Pit: "It should come as no surprise that Uranium stocks are down with the predictable anti-nuclear backlash coming worldwide in the wake of the events unfolding in Japan. One question is whether the market reaction is overblown, as often happens, or whether this is just the beginning of the demise of nuclear power in the world." The article reported that solar stocks were up as much as 7% yesterday.
The article in Wall Street Pit concludes that because of this heightened scrutiny in the nuclear industry, "the likes of which the industry has never seen, solar will likely begin to get more serious attention, subsidies or not."
But the effect of the earthquake and its aftermath will not leave the solar industry unscathed. Solar needs energy to manufacture those solar panels that you put on your roof. As reported in seekingalpha.com , "Japan accounts for 1/4th of global solar production, including solar panels and polysilicon. Most of these products are sold in domestic markets, some polysilicon is shipped overseas. Some [Japanese] facilities are not severely damaged, but what impacts the industry is the infrastructure. It is believed that at least 2-3 months will be needed to repair the power grid. Without electricity, the solar industry will remain shutdown for foreseeable future. The supply chain is not there any more. It will even take longer to repair the roads and ports in the northern coast. "
The article concludes that sentiment is shifting and even hard-nosed bottom line investors have no choice but to look at solar energy "as governments from Japan, China, France, Italy and Germany are considering boosting the solar energy shares in their renewable energy portfolios. People of these countries are putting lots of pressure on politicians to shift their energy policies to favor solar energy." And over the coming months, these major solar markets will likely enact new policies to promote the quick deployment of solar energy.
