Solar investment-case-mac-solar

Solar investment-case-mac-solar

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  The Investment Casefor Solar Tracking index for PowerShares Solar Portfolio (NYSE ARCA: TAN) www.MACsolarindex.com
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  Long-Term Bullish Factorsfor Solar Sector • Spending on new solar installs will be a massive $3.7 trillion through 2040 and solar will account for 35% of new electricity installs, according to Bloomberg New Energy Finance. • Room for double-digit growth for decades; solar is less than 1% of U.S. utility electricity generation now. • Solar panel demand has persistently surprised to the upside • Solar costs are falling due to improved technology and lower system/installation costs; grid parity is being reached in a progressively larger number of markets. Lower solar cost means increased demand, bigger target market, more unit sales, more profit.
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  Solar – Long-termSolution for Sustainable Electricity Advantages • Clean & Safe - Solar is a clean & safe electricity solution; unlike nuclear, coal, natural gas. • Cost certainty -- Solar has a fixed up-front electricity-generation cost with no fuel cost risk, unlike coal and natural gas where generation costs depend on unknown future fuel costs. • Falling costs - Solar costs are falling steadily due to technology improvements and manufacturing scale. Also, solar has a near-zero marginal cost once installed unlike high fuel operating costs for coal and natural gas. • Distributed Generation – Solar insulates electricity users from grid failures and protects against future utility electricity price increases • Scalable – Solar can be small or large scale; residential, commercial buildings, utility. Disadvantages • Day-Use Only – Solar but matches peak electricity usage times; add battery storage • Variable solar intensity – but still economical in northern climes • Installed Cost – Falling fast; grid parity in growing number of areas
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  Solar PV andThermal could together become the world’s largest electricity source by 2050 (IEA) ▪ Solar PV and Solar Thermal Electricity (STE) could together account for 27% of global energy share by 2050 (16% for PV, 11% for STE) versus current <1%, thus becoming the world’s largest electricity source. ▪ This would prevent CO2 emissions of 6 billion tonnes per year, more than today’s U.S. energy sector emissions or world transport sector emissions. Source: International Energy Agency Technology Roadmaps for Solar Electricity (2014).
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  High Growth Industry:27% Annual Growth Last 5 Years
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  Leaders: China, U.S.,Japan, India Take Over From Europe
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  Solar Pricing –Polysilicon is Mildly Above Record Low
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  Solar Pricing –Modules down by 76% over last 7 years
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  Solar Cell CostsHave Dropped 99% Since 1970s
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  Steady Percentage SolarModule Price Decline Due to Technology Advances and Scale Manufacturing
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  Solar Scientific ResearchContinues at Rapid Pace to Reduce Solar Costs and Increase Efficiency
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  MAC Solar Index- Methodology • Global solar energy index of qualified solar stocks listed on exchanges in developed countries. • Passive index of qualified solar stocks – no stock picking. • Modified market cap weighting. • Liquidity minimums to add a stock: $150 million market cap and $750,000 in average daily trading value. • Exposure Factor 1.0 for pure-play solar stocks (solar revenue above 2/3); Exposure factor of 0.5 for medium-play stocks (1/3 to 2/3 solar revenue). • Quarterly index review on third Friday of March, June, Sep, Dec.
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  Advantages of Index/ETFOver Individual Solar Stocks • Own the global solar sector in one trade – reduced transaction costs • Long track record – 10+ year history (launched in April 2008) • Dynamic Portfolio – add solar growth stocks • Diversification – across geography, technology, value chain
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  Diversification Across Geography ByCompany Headquarters: • North America: 9 companies • Asia: 7 companies • Europe: 6 companies By Stock Listing: •North America: 12 companies •Hong Kong: 4 companies •Europe: 6 companies
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  For More Information •Solar Sector Research at: www.macsolarindex.com • List of solar information sources at: www.macsolarindex.com/resources