President Obama is pressuring the Department Of Defense for a major emissions-reduction target by 2020, giving these two solar stocks yet another crucial push at the federal level…
Despite my ongoing bullishness for oil and gas, it’s hard to deny the inroads that solar energy has made over the past few years.
The interest that we’ve seen for alternative energy sources is remarkable, given how much they were panned for issues such as their sizeable carbon footprint, poor quality, and intermittent nature.
From expensive and expansive manufacturing requirements to defective photovoltaic (PV) panels to poor reliability, the solar sector has been questioned numerous times about its ability to alleviate our reliance on fossil fuels.
But the industry hasn’t died, thanks to unwavering government support.
And with taxpayer dollars funding the industry, companies have been free to experiment with different power solutions to fuel the many facets of our economy.
One sector that’s taking a particular liking to solar is our military.
It should come as no surprise to people that defending our great nation requires a lot of juice.
Whether it’s powering base camps or fueling aircraft and vehicles, billions of gallons of crude are consumed by the military each year.
By switching over some of that fuel into energy harnessed from the sun, the Department Of Defense (DOD) says it can save a significant portion of the $20 billion that it spends annually on oil.
And wherever the President sees cost savings without sacrificing jobs or efficiency, you can bet it’s something he’ll look to prioritize within his government.
Four years ago, President Obama announced that his government would reduce its greenhouse gas (GHG) emissions by 28% come 2020.
This target will reduce the equivalent of 205 million barrels of oil and taking 17 million cars off the road for one year.
Within this mandate, the DOD declared plans to have up to 3 gigawatts of renewable energy installed by 2025.
Steps have already been taken to begin achieving these goals.
Back in 2010, a company by the name of SkyBuilt Power was awarded a contract to provide a number of rapidly deployable renewable energy power stations for missions in Afghanistan.
They were able to save up to 97% of standard fuel use by troops on the battlefield.
In 2011, a 6-megawatt PV system was installed at the US Air Force Academy in Colorado.
The benefits? It supplies 11% of the base’s electricity, removes 9,400 tons of CO2 emissions annually, and saves the military a half-million dollars in energy costs each year.
A larger, 14-megawatt solar project was built at the Naval Air Weapons Station in California in 2012. It generates 30% of the base’s energy requirements and will save the base an estimated $13 million over the next 20 years.
The US Army is also deploying portable, solar powered tents for soldiers on the front lines. These units are flexible and quiet, and saves significant weight from battery loads that soldiers normally have to carry during their missions.
source: Solar King
Obviously, solar energy won’t be able to replace all the petroleum needs within the military.
But in the areas where they are a suitable substitute, the military will be turning to these two companies to provide the most cost-effective solutions.
Top Solar Stocks
The number of renewable energy projects at U.S. military bases has increased by 43% from 454 in 2010 to 700 in 2012, according to a new study by energy consulting firm, Navigant.
If the Pentagon is committed to being as environmentally sustainable as possible, the majority of future procurement projects will likely go to solar companies that are “Made In America”.
One preferred company is San Mateo, California-based SolarCity Corp. (NASDAQ:SCTY).
SolarCity is a diversified solar installer with a customer base that includes government, commercial, and residential markets.
The Company is heading into its second year of a five-year plan known as SolarStrong to install more than $1 billion in solar power systems for military housing communities across the country.
Upon project completion, up to 120,000 housing units and 300 MW of solar power capacity will be provided, making it the largest residential solar project in US history.
More contracts are certain to head SolarCity’s way with the success of SolarStrong thus far.
A second company that’s also in the DOD’s good books is St. Peters, Missouri’s SunEdison Inc. (NYSE:SUNE).
In 2010, the US Air Force awarded SUNE with a 14.5 MW solar service contract to be constructed at the Davis-Monthan Base in Tucson, Arizona.
Construction began last June, and will be the Air Force’s largest solar project to date when it comes online this year.
A 25-year power purchase agreement will see the Davis-Monthan base purchase electricity from SunEdison while the Company will continue to operate and maintain the facility after construction.
While there were no upfront costs to the Air Force, the revenues that SunEdison is expecting to make back over the next quarter century will likely amount to tens of millions of dollars every year.
Both of these projects help put SunPower and SunEdison in strong contention for upcoming defense contracts that will be pouring in during the coming decade.
3 gigawatts is a lot of power that’s required by 2025, and the military has made but a small dent in this colossal number. Expect these two companies to make a serious impact.
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