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Monday, April 6, 2009

Solar Energy Technologys Top Smallcap Companies

By James Brumley

Solar energy does work, and it can be profitable. Thats no longer in question. The next focal point for the industry is going to be making solar power more cost effective, and/or more efficient. A handful of small, publicly-traded companies are working on technological advancements that will not only bring solar energys cost closer to gas or coal energy prices, but also make it feasible to integrate the technology into our current infrastructure.

Below youll find brief descriptions of solar energys next technological leaps, and some stocks of the companies making them happen. They may prove to be outstanding investments.

Paint On Solar Panels

Do you hink a solar panel is a large, flat piece of equipment that you have to securely mount? Thats what they are now, but a new development may change the definition of solar panel in the future. In tests, the photovoltaic materials used in a traditional solar cell have also successfully been painted onto a solid structure, and then successfully converted solar power into electricity. Mounting a panel may not be necessary if the paint can be made to work well enough.

There are no publicly-traded companies with a significant focus on painted solar panels at least not yet. Like most technologies however, once its proven that it can generate a profit, corporations may start to commercialize a competitive product.

Paper-Thin Solar Panels Make Like Much Easier

Formerly, solar cell panels were heavy and fragile, and therefore difficult to install " one of their limiting factors. Recent advancements have flattened solar panels to paper-thin widths, without sacrificing efficiency. Best of all, these thin film panels arent rigid like previous ones. That flexibility makes thin-film panels considerably easier to mount without the risk of breaking.

One of the leaders of this technology is First Solar Inc. (NASDAQ: FSLR). First Solar manufactures a cadmium telluride thin film that costs less than $1.00 per watt.

Bigger may not necessarily be better though. Smallcap company XsunX, Inc. (OTCBB: XSNX) believes that its ASI-120 (amorphous silicon) solar module can provide an even lower cost per watt while supplying electricity in a wider variety of geographical environments. The companys thin-film modules find a balance between the common silicon wafer modules, which are more costly, and lower rated power thin film modules, which are fairly ineffective.

Another small stock of interest is Energy Conversion Devices (NASDAQ: ENER). Its wholly-owned subsidiary Uni-Solar Ovonic manufactures a triple-junction silicon solar cell that is proving to a vast improvement on already0advanced thin film panels.

Making It Is One Thing; Storing It Is Another

For solar energy to really be functional, it has to supply power even when the sun isnt shining. but the amount sunshine we receive is one thing we cant improve. The solution to the problem is simple " a battery that stores this electricity. Thats easier said than done though.

Most modern batteries simply wont work well enough to allow for complete dependence on solar power. The solid components in most rechargeable batteries degrade relatively quickly, and are slow to charge. Plus, they dont last long. The development of liquid components rather than solid materials appears to be a potential solution to all those challenges.

Though the liquid battery to date is only being developed as part of a test at MIT, it shows a great deal of promise. And, once the technology shows real promise, we anticipate for-profit corporations becoming involved with their own versions.

Thats not to say investors have to wait for the liquid battery to become commercialized though. Several solid-component battery manufacturers are producing products that still meet current demands. One of them is Valence Technology Inc. (NASDAQ:VLNC), which has a great deal of the large-capacity battery market the kind that utility companies would be interested in. Advanced Battery Technologies Inc. (NASDAQ: ABAT) and EnerSys (NYSE: ENS) are also key players in the battery market, and could play a major role as the need for power storage is increased.

That said, there are at least a couple of dozen battery companies that could actually meet the needs created by the continued growth of solar power. Some are better than others, but thats not a function of size.

Bio-Backsheets

Its a little ironic that solar power was largely designed to be an alternative to the use of petroleum, yet petroleum is used to manufacture solar panels. Where? Not the solar collection cells themselves " those are made of silicon. However, these cells are covered by a protective coating called a backsheet, most of which use petroleum in their design.

Of course, this means the cost to build backsheets can vary with the price of oil " volatility that most technology companies just cant tolerate. To avoid that kind of price volatility in addition to improving the quality of backsheets, a small company called BioSolar Inc. (OTCBB: BSRC) has designed an effective solution. Rather than use petroleum in backsheets, use a plant material to make what are effectively bio-based backsheets.

The bulk of BioSolars previous work was supplying bio-backsheets for common crystalline silicon solar cell panels. However, the newer copper-indium-gallium-selenide and cadmium telluride panels are growing in popularity and may soon be the new standard. Therefore, BioSolar has also begun to develop bio-backsheets for those kinds of solar panels.

Electricity-Generating Windows

A lack of transparency clearly limits where and how photovoltaic panels can be used, since a window blocked by a solar panel isnt a window at all. However, not utilizing the surface area of windows " particularly for large, glass-covered buildings " is a waste of potential energy. The solution is a see-through solar panel.

Turning glass into an effective solar panel without sacrificing transparency isnt science fiction for New Energy Technologies, Inc. (OTCBB: NENE). This small company has devised a way to coat windows with silicon nanoparticles that actually convert ultraviolet light into electricity. Needless to say, if an entire building could become a self-contained electricity supply, the implications would be enormous.

Advice to Investors

As enticing as some of these afore-mentioned companies may be, bear in mind its ultimately the technology that will determine their profitability. While these stocks are presently the most interesting, be vigilant about finding the companies that will actually reach the proverbial finish line first. At the same time, remember the best technology is one thing, but profits may be another.

In our experience, the smaller companies and their stocks tend to be better opportunities. These organizations and their management are nimble, and intensely focused (not to mention highly motivated). No matter what though, small or large, dollars are going to flow to some of these companies.

The paradigm shifts in solar powers technology are no small matter, but for serious investors who need details of their commercialization potential, keeping tabs can be tough. Thats why we strongly recommend subscribing to our free newsletter. Well inform you of the industrys advances, and the stocks that can let you tap into that progress. - 23223

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