Invest Where Solar Beats 10 Oil

"By Jeff Siegel"

In Dubai, solar is now cheaper than oil at 10 a barrel.

Yes, you read that correctly.

As reported by the National Bank of Abu Dhabi:

Dubai set a new global benchmark in December 2014: at 5.84
US cents per kW hour, the bid for Dubai Electricity and Water
Authority's 200 MW solar PV plant was cheaper than oil at
US10/barrel and gas at US5/MMBtu.

You see, while oil in the U.S. is used primarily as a
transportation fuel, in the oil-rich Middle East, the shiny black
stuff is used to generate electricity. In fact, in Saudi Arabia,
oil accounts for more than 65% of all electricity production. In
Kuwait, it's as high as 71%, and in Yemen, it's nearly 100%.

Oh, to be a fly on the mud-brick wall when the proverbial poop
hits the fan.

Meanwhile, consider this...

In the absence of Saudi Arabia's own domestic oil consumption,
the desert kingdom could have generated an extra 43.8 billion in
2013.

With that kind of scratch in play, it's not surprising that the
smart money is piling into a burgeoning solar industry in the
Middle East.

GRID PARITY FOR ALL!

In a new report written for the National Bank of Abu Dhabi,
researchers have found that renewable energy technologies are fast
approaching grid parity in most parts of the world.

And this was no Greenpeace report, either. This thing was
actually produced primarily for the finance community in the Gulf
region.

Here are some of its findings...

* More than 50% of investment in new generation capacity
worldwide is now in renewables.

* 260 billion a year has been invested in renewable energy
technologies worldwide for the past five years.

* Green bond issues to pay for low-carbon energy projects
reached 36.6 billion in 2014, more than triple the previous
year.
* Prices for solar PV modules have fallen over 80% since 2008.

* Solar PV will be at grid parity in 80% of countries in the
next two years.

* Solar PV is already cheaper than grid electricity in 42 of the
50 largest U.S. cities.

* Industrial applications of energy efficiency can deliver 100%
payback in five years.

* Modern wind turbines produce 15 times more electricity than
the typical wind turbine in 1990.

* The cost of energy storage is expected to drop to 100 per kWh
in the next five years. Today it's about 250.

These data points are music to the ears of Middle East kings,
presidents, and prime ministers. After all, in the Gulf region,
oil is the lifeblood of many economies. And make no mistake -
the cheap oil party going on right now won't last forever.

Truth is, in the Middle East, there is no greater choice for new
electricity generation than solar. You know, because it's a
freaking desert!

QUIET INTEGRATION

While I remain bullish on solar in the U.S., I'm becoming more
and more attracted to the opportunities that could soon be spawned
throughout the Middle East. In fact, I'm planning a research
junket to the region sometime this year to get a firsthand look at
what could soon be one of the most lucrative solar markets on the
planet.

In the meantime, keep a close eye on the solar and solar-related
companies that are actively investing in the region right now.
These include, but are not limited to:

* ABB (NYSE: ABB)

* SunPower (NASDAQ: SPWR)

* First Solar (NASDAQ: FSLR)

* Schneider Electric (OTC: SBGSY)

* SunEdison (NYSE: SUNE)

* Trina Solar (NYSE: TSL)

This list will continue to grow, too.

Because while the Saudis and the U.S. play their game of
chicken, behind the backdrop of all this nonsense and rhetoric, a
strong and vibrant solar market is quietly integrating itself into
a fossil fuel-addicted world. And it's doing so profitably.

Invest accordingly.

To a new way of life and a new generation of wealth...

Jeff Siegel is Editor of Energy and Capital, where this article was first published.