Another solar boom may be breaking on the horizon


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The solar power industry saw its star decline over the last few years, hammered by a toxic combination of political controversy, massive oversupply in the solar cell market and competition from cheaper Chinese manufacturers. The highest-profile problems came as congressional Republican assailed the Obama administration over its handling of a $535 million guaranteed loan to Solyndra, which later went bankrupt.

That setback pushed the government farther out of the solar financing game, which it dominated in the boom years. Since its peak in 2008, shares of the most important US manufactuer, First Solar, declined ( FSLR ) from over $300 to less than $30. That decline mirrors the fall in the Guggenheim Solar ETF ( TAN ), which declined more than 90 percent over the same period.

As energy prices continue to rise, however, some private investors are getting back into the game. Bloomberg News reports that investing heavyweights like Berkshire Hathaway (BRK.A), Google ( GOOG ) and KKR have jumped back into investing in solar projects, seeking out the regular returns of 15 percent or more that an established solar infrastructure project can generate.

"A solar power project with a long-term sales agreement could be viewed as a machine that generates revenue," Marty Klepper, an attorney with Skadden Arps Slate Meagher & Flom LLP, told the news source. Klepper's firm reportedly helped Warren Buffett broker a major solar deal.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: News Headlines , Business
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