Welcome to another edition of PowerTalk. Iâ€™m your host Chris Versace, editor of the investment newsletter PowerTrend Profits, and these are my one-on-one conversations with the movers and shakers in the business world that take you behind the scenes and in the know. Be sure to check out ChrisVersace.comÂ for more on PowerTrends and past editions of PowerTalk.
Joining me this week on PowerTalk is Michael Gorton, the Chief Executive Officer and Chairman of Principal Solar Inc. (PSWW). Thereâ€™s been a lot of speculation by investors in the solar space, some making big money along the way and others losing it in the shares of companies like First Solar (FSLR), SunPower Corp. (SPWR)Â and of course Solyndra, Inc. Itâ€™s the view by those at Principal Solar that many are thinking about the solar industry the wrong way. Rather than replacing traditional forms of energy — nuclear, coal and natural gas — Michael and his team see solar-generated electricity becoming a self-sustaining, investment grade asset within two to three years.
Driving that transformation are the 40%+ price declines in solar technologies during the last two years, and as Michael tells me, by late 2014 or early 2015 the price will be substantially lower, making them very cost competitive as a generation source for electricity. By riding the innovation wave much like that in the semiconductor industry that has paved the way for personal computers, tablets and smartphones, Principal Solar sees the use of solar expanding dramatically in the coming years.
Perhaps that is why the International Energy Agency (IEA) projects solar will provide up to 25% of global electricity production by 2050. Now, you may not believe that forecast — Iâ€™m not sure I do — but itâ€™s not slowing down solar investments by Germany, China and Japan. Meanwhile, here at home traditional electricity generation companies are preparing for that coming move down the solar cost curve. It sure sounds like Principal Solar is on to something, and sometimes, to see the real opportunity, you have to have a different view on things — and thatâ€™s just what Michael shares with us today.
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