First Solar is expected to report EPS of $0.92 on revenue of $584 million. Last quarter the company posted EPS of $1.33. Chinese producer Canadian Solar Inc. (NASDAQ: CSIQ) today named a new CFO and also reported that its gross margins for the second quarter would be at the lower end of its outlook. LDK Solar Inc. (NYSE: LDK) and Trina Solar Ltd. (NYSE: TSL) have also recently replaced CFOs as a variety of accounting issues have begun to plague Chinese solar makers.

Solar producers make up a significant portion of the investments in several clean energy ETFs. These funds include the Guggenheim Solar ETF (NYSE: TAN), the iShares S&P Global Clean Energy Index (NYSE: ICLN), the PowerShares WilderHill Clean Energy ETF (NYSE: PBW), the PowerShares Global Clean Energy ETF (NYSE: PBD), the PowerShares Cleantech Portfolio (NYSE: PZD), and the Market Vectors Solar Energy ETF (NYSE: KWT).

The Guggenheim Solar ETF (NYSE: TAN) holds about $150 million in total assets, and First Solar is its largest holding, at more than 19%. Trina and SunPower Corp. account for another 9% of holdings. Year to date the best performers in the fund have been GT Solar International, Inc. and GCL-Poly Energy Holdings Ltd., neither of which makes modules. First Solar has lost more than -4.5% of its value so far this year, while GT Solar is up more than 66% and GCL-Poly is up more than 52%. LDK Solar (-28.36%), Canadian (-22.28%), and Trina (-16.14%) indicate the direction of Chinese solar makers’ shares. So far this year the fund is down -6.3%.

The iShares S&P Global Clean Energy Index (NYSE: ICLN) holds total assets of $67 million, but unlike TAN the fund invests in non-solar as well as solar stocks. The fund’s three largest holdings are First Solar, GT Solar, and Trina. Year to date the fund is off nearly -2%. Nearly a third of the fund’s holdings are in solar-related stocks.

The PowerShares WilderHill Clean Energy ETF (NYSE: PBW) holds total assets of about $415 million. The fund recently replaced First Solar as its top holding with Emcore Corp., a maker of solar cells and concentrating solar PV systems. Like ICLN, this fund is diversified throughout the clean energy sector, but year-to-date results have been poor, down -15.5%.

The PowerShares Global Clean Energy ETF (NYSE: PBD) is an equal weighted fund that holds about $180 million in assets among nearly 100 stocks, none of which accounts for more than 2% of holdings. The fund is down more than -5% so far this year.

The PowerShares Cleantech Portfolio (NYSE: PZD) holds about $148 million in total assets. The fund is styled as a mid-cap growth fund and includes 71 stocks spread across the spectrum of clean energy development. First Solar is the only solar PV maker in its top 20 holdings. Year to date the fund has returned 6.7%.

The Market Vectors Solar Energy ETF (NYSE: KWT) is the newest and smallest of these clean energy funds. Assets total $25 million, and like TAN, the fund is narrowly focused on the solar sector. First Solar is the funds top holding at nearly 11%, followed by GT Solar. Trina and Suntech are among the top 10, which account for 64% of holdings. So far this year the fund is down more than -9%.

The solar sector is currently struggling with excess capacity, shrinking margins, and lower government subsidies. Many of the China-based companies are also plagued with accounting issues, raising questions about the companies’ financial footings.

Even if First Solar reports an outstanding second quarter (not terribly likely), the effect on the sector and on the ETFs that are heavily invested in solar stocks ought to remain muted.

Paul Ausick

In addition to the PowerShares fund, we’ll take a quick look here at the Guggenheim Solar ETF (NYSE: TAN), Market Vectors Global Alternative Energy ETF (NYSE: GEX), iShares S&P Global Clean Energy Index Fund (NASDAQ: ICLN), and Market Vectors Solar Energy ETF (NYSE: KWT).

PowerShares WilderHill Clean Energy (NYSE: PBW) is a non-diversified index tracker. The largest of its 58 holdings is SunPower Corp. (NASDAQ: SPWRA) at 3%, followed by Tesla Motors Inc. (NASDAQ: TSLA), GT Solar International Inc. (NASDAQ: SOLR), Sociedad Quimica y Minera de Chile S.A. (NYSE: SQM), and Polypore International Inc. (NYSE: PPO). The fund’s market value is $448.7 million, and its 52-week range is $7.98-$11.42. PBW’s NAV is 9.00.

Guggenheim Solar ETF (NYSE: TAN) invests at least 90% of its assets in  stocks included in the MAC Global Solar Energy Index. It’s top five holdings are First Solar Inc. (NASDAQ: FSLR) at 14.38%, Hong-Kong listed GCL Poly Energy Holdings Ltd. at 8.99%, Meyer Burger Technology AG (OTC: MYBUF), Trina Solar Ltd. (NYSE: TSL) at 5.3%, and SunPower Corp. (NASDAQ: SPWRA). Assets under management total $165.2 million and the NAV at June 7th was $7.12. The 52-week range is $6.12-$9.16.

Market Vectors Global Alternative Energy ETF (NYSE: GEX) tracks the price and yield performance of the Ardour Global Index, and invests at least 80% of assets in stocks included in that index. The fund’s top five holdings are First Solar at 8.8%, Vestas at 8.37%, Cree Inc. (NASDAQ: CREE) at 6.21%, Enel Green Power SpA at 6.1%, and Iberdrola Renovables SA at 5.73%. The fund has $140.3 million of assets under management and its NAV is $19.22. The shares’ 52-week range is $17.81-$22.76.

iShares S&P Global Clean Energy Index Fund (NASDAQ: ICLN) tracks the price and yield performance of the S&P Global Clean Energy Index. The top five holdings are Germany’s Verbund AG (OTC: OEZVF) at 5.58%, Iberdrola Renovables at 5.47%, Empresa Nacional de Electricidad S.A. (NYSE: EOC) at 5.46%, China Longyuan at 5.44%, and SunPower at 5.4%. The fund’s net assets total $71.1 million and the NAV is $16.54. The shares’ 52-week range is $14.09-$19.00.

Market Vectors Solar Energy ETF (NYSE: KWT) is an index tracker for solar energy companies. It’s top five holdings are First Solar at 9.54%, MEMC Electronic Materials Inc. (NYSE: WFR) at 8.89%, Trina at 8.54%, SunPower at 6.35%, and Norway’s Renewable Energy Corp. ASA at 6.07%. The fund’s assets under management total just $29 million and its NAV is $10.55. The shares’ 52-week range is $9.04-$14.33.

Many of these funds (and their components) are down considerably and they are down so much against the 2008 peak-energy highs that many investors would rather not be reminded.  24/7 Wall St. has maintained for quite some time that many alternative energy investments may really just be leveraged oil bets in disguise.  These have not even lived up to that universally when oil rose.  Now investors will hope that the decommissioning of nuclear plants can be the next frontier for growth.  If not, global austerity measures may force solar projects to actually be evaluated on their real underlying costs basis just like other projects.

Paul Ausick

Nuclear related shares are getting pounded now as politicians and activist groups are calling for a significantly geared down approach to nuclear approach now.  So who wins?  Think solar.  Solar power plants melting down only causes black goo on the ground.  Coal… who cares if it is dirty at this point compared to nuclear fallout.  Wind and other alternative energy… Same for solar.  Natural gas is back… Many power plants run on this, and if nuclear power gets curbed too much ahead then natural gas is going to benefit just like coal does.  Here are eight ETFs that are trading higher as a direct result of the Japan quake knocking out the nuclear sector.  Oh year, a “Short Japan Fund”…

Market Vectors Coal ETF (NYSE: KOL) is up 1.75% at $47.01 against a 52-week range of $28.35 to $49.80.

Guggenheim Solar (NYSE: TAN) is up 6.3% at $7.83 against a 52-week trading range of $6.02 to $9.34. There is also the  Market Vectors Solar Energy ETF (NYSE: KWT) up 7.1% at $12.39 against a 52-week trading range of $9.04 to $14.33. PowerShares WilderHill Clean Energy (NYSE: PBW) is up 0.9% at $10.00 against a 52-week range of $4.00 (low from Flash Crash) to $11.42.

ProShares UltraShort MSCI Japan (NYSE: EWV) is up a whopping 15.6% at $39.30 against a 52-week range of $29.83 to $52.78… This one is 200% the inverse of the daily performance of the MSCI Japan Index.

United States Natural Gas (NYSE: UNG) is now up only 0.25% at $10.42 but this one was up as high as $10.78 earlier today.  The iPath DJ-UBS Natural Gas TR Sub-Index ETN (NYSE: GAZ) is also now ‘only’ up 0.57% at $7.09 but it was up as high as $7.31 earlier today.  Finally, the Teucrium Natural Gas ETV (NYSE: NAGS) is still up 3.1% at $22.97 but this one has extremely thin trading volume. 

Japan is one of those situations that is unfolding as a tragedy and it will have an impact on GDP ahead.  These are just the financial winners in exchange-traded products as far as what the stock market vote is today.

JON C. OGG

MEMC reported that its fourth quarter EPS was $0.25 on revenue of $850 million. Analysts had been expecting EPS of $0.34 on revenue of $901 million. On a non-GAAP basis, revenue totaled $949.5 billion, which includes adjustments for GAAP real estate and lease accounting.  It is the guidance ahead that drove shares.  For 2011, MEMC sees non-GAAP sales of $3.4 to 3.7 billion and earnings of $1.00 to $1.30 EPS. Estimates for all of 2011 were only $1.00 EPS and $2.65 billion in sales.  MEMC shares are trading up 11.3% at $12.95 on the day against a 52-week range of $9.19 to $16.99.

Reporting after the close today is GT Solar International, Inc. (NASDAQ: SOLR) and it is participating in the rally as well.  Thomson Reuters has estimates of $0.38 EPS and $251.9 million in revenues.  If it offers guidance, those estimates for next quarter ar $0.38 EPS and $228.9 million in revenues and the annual 2011 estimates (actually March-2012) $1.26 EPS and $869.13 million in revenues.  Shares are up 2.7% at $11.50 and the 52-week range is $4.90 to $11.95.  GT Solar shares are up 2.7% at $11.50 versus a 52-week range of $4.90 to $11.95.

JA Solar Holdings Co., Ltd. (NASDAQ: JASO) reports late next week.  Of the recent solar names, it seems to have been battered more than others as analysts downgraded the shares. With a $1.2 billion market cap, shares are up today by over 6% to $7.40 versus a 52-week range of $4.22 to $10.24.

SunPower Corporation (NASDAQ: SPWRA) reports on or about February 17, and its shares are up 6.5% at $14.75 today against a 52-week range of $9.61 to $22.19.

First Solar Inc. (NASDAQ: FSLR) is one we are still awaiting an earnings date on.  The company’s most recent guidance was given in December for a full 2011 outlook.  On December 14, 2010, First Solar gave a 2011 outlook as follows:  For 2011… net sales in the range of $3.7 to $3.9 billion, up about 46% year over year; the net sales forecast is comprised of $2.8 to $2.9 billion of module sales and $0.9 to $1.0 billion of EPC/project development sales. Earnings of between $8.75 to $9.50 EPS and consolidated operating income was put at $875 to $975 million with operating cash flows put at $1.0 to $1.1 billion for the year.  First Solar also noted that it plans to invest $1.0 to $1.1 billion of capital to nearly double production capacity by year-end 2012, to maintain existing capacity and to add infrastructure to support growth.  Shares of First Solar are up over 5% at $164.13 and shares hit a new 52-week high today of $165.90.

Another issue helping the sector is word that Germany has apparently reached terms on solar feed-in tariff cuts for 2011.

The Guggenheim Solar ETF (NYSE: TAN) is a pure-play ETF for solar stocks and it is up 4.8% at $8.51 today against a 52-week range of $6.02 to $9.34.  The PowerShares WilderHill Clean Energy ETF (NYSE: PBW) has a large portion of its holdings tied to solar and its shares are up 1.9% at $10.88 versus a 52-week range of $4.00 to $11.10.

JON C. OGG

Photo-voltaic solar installations are expected to outsell large-scale solar thermal projects, as governments keep a careful eye on spending and incentives. We’ll look only at solar PV companies in this story because that’s where the large, publicly traded companies compete. The solar PV players we’ll look at are First Solar, Inc. (NASDAQ: FSLR), Suntech Power Holdings Co. Ltd. (NYSE: STP), LDK Solar Co. Inc. (NYSE: LDK), JA Solar Holdings Co. Ltd. (NASDAQ: JASO), Sunpower Corp. (NASDAQ: SPWRA), Energy Conversion Devices, Inc. (NASDAQ: ENER), and Trina Solar Ltd. (NYSE: TSL).

Here’s a short table showing the tickers, the current price, the mean target price from Thomson Reuters, the implied upside to that target, and the 52-week trading range. We’ll have some comments on these companies following the chart.

Both NRG and SunPower have made acquisitions in the last year of project pipelines. NRG is trying to get on top of renewable portfolio requirements, and SunPower wants a captive market for its solar PV panels. Other solar PV makers, including First Solar, Inc. (NASDAQ: FSLR) and MEMC Electronic Materials, Inc. (NYSE: WFR) have also purchased project development companies in an effort to widen their revenue streams.

The market for solar PV modules is expected to soften as a result of the economic weakness in Europe and slow recovery in the US. Prices for modules and cells are expected to fall in the first half of next year, and many of the solar companies that not invested in captive project pipelines will get squeezed even harder, at least until the second half of next year. We looked at some solar companies’ troubles in this story.

Clearly a nicely stuffed project pipeline alone won’t save SunPower or any other company from falling module prices and tumbling margins. The solar PV makers have got to wring out more from their production costs, or increase the efficiency of the cells they make. Neither is easy, and SunPower especially could have some trouble. It is the current market leader in efficiency, but its products are more costly than those from other makers.

Solar PV makers face an uncertain year in 2011. Prices are almost guaranteed to fall, competition from low-cost providers in China will be fierce, and a weak global economic recovery are all going to weigh on revenue and profits. Project pipelines will surely help. But will that be enough?

SunPower’s shares are up nearly 4% today, and the Guggenheim Solar ETF (NYSE: TAN) is up about 3%, followed by the PowerShares WilderHill Clean Energy ETF (NYSE: PBW), up by about 2.5%.

Paul Ausick

Trina Solar Ltd. (NYSE: TSL) beat earnings and raised capacity projections ahead.  It could not avoid the mud slide and shares closed down 6.5% at $22.32 versus a 52-week range of $14.85 to $31.89.  Auriga USA research noted today on Trina, “Trina Solar provided a bigger beat and raise than even our bullish preview had expected. Higher sales and better cost programs led the charge, with bullish commentary on 2011 pricing and volume supporting our above consensus view on 2011. Qualitative fears rule the day, however, and continued volatility in the dollar/euro exchange rate will likely keep investors cautious until companies — TSL included — provide 1Q11 guidance. We maintain our Buy rating and $38 target on slightly increased 2011 estimates.” A $38 target implies upside of 70% to a $22.32 close.  Unfortunately, the world is not heading the right way.

LDK Solar Co. Inc. (NYSE: LDK) was noted as a possible double in a year, and the lower prices just made a double from the lows all that much more possible.  This saw an 8.6% drop to $10.00 today, yet the 52-week range is $4.97 to $15.10.  Suntech Power Holdings Co. Ltd. (NYSE: STP) closed down 1.8% at $7.14, but the stock managed to hit a new 52-week low of $7.05 today.  Ouch.  JA Solar Holdings Co., Ltd. (NASDAQ: JASO) continued its slide from highs with shares down 4.9% at $6.94.  It is still up 100% from lows as the 52-week trading range is $3.85 to $10.24.

First Solar, Inc. (NASDAQ: FSLR) managed to actually close up on the day.  It is hard to celebrate a gain of 0.4% to $122.85, but this was a 4140 stock just about two weeks ago and it was over $150 a month ago.

The ETF picture shows the real directional issue in the sector today: Guggenheim Solar ETF (NYSE: TAN) closed down 3.5% at $6.85 while the PowerShares WilderHill Clean Energy (NYSE: PBW) closed down 2.14% at $9.61.

Solar energy stocks often have severe moves up and severe moves down.  When things are bad, they are awful; when things go right, everyone loves solar.  It is a sector that if Clint Eastwood made a movie or documentary for it, he could name it “The good, the Bad, and the Fugly.”  Today was the latter.

JON C. OGG

Predicting markets and economic patterns is difficult over the next 20 years because there are many unknowns.  After all, who will be President in 2016?  What will tax laws be in 2020?  Which of today’s deadly diseases will be cured in 2020?  Which regions will experience wars by 2020?  This is why futurism may be one of the more unique approaches in investing. ETFs are often called the mutual funds of the future and our goal is to meld a futurist outlook into an investing strategies.

A rule of long-term investing is that what investments feel good today, such as those in Chinese and Indian markets, may not generate returns tomorrow.  Investors will face short-term pain for long-term gain. Futurists are always thinking beyond the next recession and the next boom behind it.

Beyond Emerging Markets… Frontier Markets

If you are thinking about China or India over the next 10 to 20 years, there is plenty to consider.  Both countries have grown exponentially as they became some of the world’s largest economies. Think post-Chindia and post-BRIC.  ”Frontier markets,” a term which has come up in recent years that goes beyond ‘emerging markets’ is ‘frontier markets.’  These “frontier market” economies still have room for growth.  Perhaps nothing illustrates this better than The NatGeo World Map at Night.

When it come to Africa and other Frontier Markets, there are three exchange-listed vehicles that we usually choose.  All are generally more volatile than the broader market stock indexes in the developed world.  Many frontier funds base performance  off of the MSCI Emerging Markets Index rather than the S&P 500.

Morgan Stanley Frontier Emerging Market Funds, Inc. (NYSE: FFD) is a small closed-end fund with roughly $105 million in assets.  This fund has diverse investments in banks, breweries, miners and utilities.  At its semi-annual report, the fund listed holdings in 21 nations including Nigeria, Argentina, Bangladesh, U.A.E., Kenya, Kuwait, Pakistan, Serbia, Qatar, Lebanon and Greece.  Average volume is light at just under 20,000 shares in a day and its 52-week range is $10.52 to $15.23.

Market Vectors Africa Index ETF (NYSE: AFK) from Van Eck seeks to track the performance of the Dow Jones Africa Titans 50 Index, which is full of companies that are headquartered in Africa or that generate the majority of their revenues in Africa.  It holds banks, breweries, miners, utilities, and more.  South Africa is where the largest number of the fund’s holdings are based. Assets under management were listed as $92 million in mid-November, its 52-week trading range is $26.60 to $34.88, and average daily volume is close to 25,000 shares per day.

iShares MSCI South Africa Index (NYSE: EZA) is an ETF that seeks to track the MSCI South Africa Index and it is one of the largest  vehicles out there since South Africa has a more established markets and is more politically stable compared with other African nations.  The fund invests in South African companies and has roughly $520 million in assets.  It trades close to 400,000 shares a day, and its 52-week range is in the low-$50s to $72.77 (flash crash low was listed as $23.00).  Its holdings include Anglo Platinum, AngloGold Ashanti, Firstrand, Gold Fields Ltd., Sasol, and Standard Bank.

Is Africa risky?  Are many other nations in the Frontiers markets risky? Absolutely.  But many of these nations have some of the biggest undisturbed deposits of natural resources.  That’s why we have highlighted these ETF and fund products rather than make individual picks.

Are You Ready For The International Water Wars?

Americans, Canadians, and many Europeans take potable water for granted.  However, Montezuma’s Revenge and many water-borne illnesses are rather common around the globe.  Building water filtration systems and desalination plants is costly. Nations are already setting limits on water resources.  Don’t ever discount the future of water.  Wars could be fought over potable water sources.  If you refer to that Nat-Geo World at Night Map, you can guess where much of the water resources are needed.

Many speculators have invested in the water industry for years.  It is no wonder that GE, 3M, and many other conglomerates have invested in the sector.  PowerShares Global Water (NYSE: PIO) and PowerShares Water Resources (NYSE: PHO) are two ETFs that compete in the world of water investing.

The PowerShares Water Resources (NYSE: PHO) seeks to track the Palisades Water index and it tends to have more of a U.S. focus.  Of course, many of these companies were hurt because they built new infrastructure ahead of housing developments that were scraped when the bubble burst.  PowerShares Water U.S. assets are close to $1 billion. It trades well over 200,000 shares per day, and its 52-week range is $14.70 to $18.68. (outside flash crash listed low of $6.99) to $18.68.

The PowerShares Global Water (NYSE: PIO) seeks to track the Palisades Global Water index, and it invests in U.S. companies and large international companies.  This is a smaller fund than the domestic water fund (PHO) from PowerShares.  Still,  it has more than $300 million in assets and trades close to 60,000 shares per day, and it has a 52-week range of $15.60 to $19.46.

J.P. Morgan Asset Management and Water Asset Management acquired Southwest Water, and that Water Asset Management is a private investment vehicle.  These are four small water mutual funds: Kinetics Water Infrastructure Advantaged Fund (KWIAX), PFW Water Fund (PFWAX), Allianz RCM Global Water Fund (AWTAX), and Calvert Global Water Fund (CFWAX).

NANO-NANO… Take Me To Your InnerSpace

The word nanotechnology, or nanotech for short, is another futurist technology. Many aspects of nanotechnology are already in use today in chemicals and other products.  This may also be one of the most controversial issues in the world of technology.  Think about atomic and molecular scale systems comprised of compounds between 1 to 100 nanometers, or one billionth of a meter.  There have been fortunes made by investors and there have been many fortunes lost.

Imagine machines so small that they could operate and move freely in your blood.  Imagine coatings that are comprised of molecules and materials small enough that they get a perfectly flat surface.  Unfortunately, you also have to consider toxicity, regulation, and the potential for a destructive use for such small products.  There is one ETF in the PowerShares Lux Nanotech (NYSE: PXN).

The PowerShares Lux Nanotech (NYSE: PXN) from Invesco seeks to track the the Lux Nanotech index.  It is comprised of some well-known companies and many companies have nanotech as a portion of their business.  The ETF has been around since the end of 2005 and has never recaptured its former highs.  It is also small at about $6 million in assets and trades under 25,000 shares a day on average.  Its 52-week range is $7.74 to $10.85.  Some of the companies in the fund include A123 Systems, Elan, 3M, GE, and Headwaters; but this ETF has some very risky and very volatile holdings as well.

Harris & Harris Group, Inc. (NASDAQ: TINY) is a nanotech venture capital fund whose website address tinytechvc.com tells what it is all about.  Its market capitalization is roughly $137 million, it trades close to 100,000 shares per day, and its 52-week range is $3.70 to $5.50.  While this is not a fund, it is close enough as the VC-company’s portfolio has more than 30 investment company holdings.  The company claimed a net asset value of $4.51 per share as of September 30, 2010, but founder Charles Harris also passed away at the end of September 2010.

Advanced Batteries… High on Lithium

All of those rechargeable batteries, batteries in consumer electronics and electric cars need lithium, which makes it a trend for futurists to consider.  There are two key risks here for this precious commodity: it could eventually run out or become uneconomical.  Moreover, China and Russia are major suppliers, which gives the sector an element of political instability.

Is it possible a better technology could come along?  Of course.  Still, there are many opportunities in the industry and it is probably no accident that behemoths such as General Electric have already invested in advanced batteries and have vowed to continue to do so. Lithium demand has nearly doubled in the past decade from above 15,000 metric tons in 2002 and is expected to rise to 55,000 metric tons by 2020 , according to the TRU Group.

Global X Lithium ETF (NYSE: LIT) is a very new ETF that launched in the summer and its holdings are solely in companies active in exploring and mining of lithium and producing lithium batteries.  So far it has been a big success.  The fund seeks to track the Solactive Global Lithium Index. Some key holdings are Sociedad Quimica Y Minera De Chile (above 22% of the fund), FMC Corp., Rockwood Holdings, Sanyo Electric, Ener1 and A123 Systems.  Assets under management are $91.5 million, it trades over 100,000 shares on an average day, in a range of $15.63 to $21.30.
Alternative Energy, In A Broader Sense

Investing in alternative energy may hold the promise of the future.  It has also been very painful even for futurists with a decade or longer outlook.  True futurists may seek an answer out of wind, solar, wave, geothermal, biofuels and even nuclear energy.  Not all alternative energy is technically renewable.  But the world needs alternative energy sources.  That is no longer even debated in public by most oil executives.

A problem that arises even for futurists with a ten-year outlook or longer is that the oil and gas giants of today may be the leaders of alternative energy in the future.  BP plc (NYSE: BP) has one of the worlds largest solar operations, and it is not unchallenged by other oil and gas giants.  Another caveat is that you do not need to be a futurist to see how many alternative energy and renewable energy investments are often considered nothing more than highly leveraged bets against the future price of oil.

PowerShares WilderHill Clean Energy (NYSE: PBW) is one of the go-to ETF products in alternative energy.  The fund is meant to track the performance of the WilderHill Clean Energy index.  Its largest holdings do seem to be more geared toward solar, which is most established alternative energy technology.  Some of its key components are First Solar, Broadwind Energy, IDACORP, JA Solar, and Suntech Power.  The fund has more than $550 million in assets, it trades over 300,000 shares per day, and its 52-week range is roughly $8.25 to $11.95.  The biggest issue is performance as it was worth over $25 at the 2008 peak versus close to $10.00 currently.

PowerShares Cleantech (NYSE: PZD) is the international and smaller competing version of the PowerShares Wilderhill Clean Energy ETF.  It is meant to track the price and yield performance of the Cleantech index.  Some of its top holdings are ABB, Corning, First Solar, IBERDROLA, Novozymes, Siemens, and Vestas Wind Systems.  Assets are about $150 million, it trades only about 14,000 shares a day and its 52-week range is $20.00 to $25.95.  This too suffers from poor performance as its shares were above $35.00 in the 2008 peak versus under $25 today.

An even more international focus in clean energy is the PowerShares Global Clean Energy (NYSE: PBD).  Its focus is to track the performance of the WilderHill New Energy Global Innovation index and many more companies are global.  Most of its larger constituent members are not known to most US investors.  The market cap is fairly small at about $160 million, it trades about 40,000 shares a day, and its 52-week range is $11.51 to $17.64.  It is far from alone in performance anxiety as this was above $30 at the peak and it is closer to $13.00 in November-2010.

Rare Earth… Not So Rare, But….

Any investors thinking of investing in rare earth should consider what happened in 2010 before putting on a futurist’s hat and taking a shot.   All caveats aside, nations such as the United States have to depend upon foreign sources of rare earth materials and these are critical for defense equipment  autos, clean energy, electronics and medical devices.  It is vital that these REOs and REEs have a local source and it is vital that we have our own sources.  The risks in investing in this might be like comparing biotech to DJIA components.  Futurists down the road will likely concede that many of the companies in this field were little more than Hail Mary passes with a story rather than real assets that could be monetized economically.

The Market Vectors Rare Earth/Strategic Metals ETF (NYSE: REMX) is the only current fund-oriented instrument that revolves around the REE and REO trade.  It is extremely new, its methodology is unproven, and its company constituents are often very risky companies with promises rather than operating histories.  The launch came at the end of October-2008 and it has been very actively traded.  For 2010, we are going to not discuss price ranges, performance, and more because of all the risks here.  Either way and regardless of how this performs, the rare earth theme is unlikely a theme that purchasing managers will not have to consider for the future.

Back to futurists and secular themes in general…

If you want to learn more about futurist thoughts and ideas, one source I have used for some time is the World Future Society.  This is not an investment web site.  It has offered insight for futurists and those who think beyond the next month for years and years.  It publishes The Futurist magazine, has free email newsletters, conferences, books, blogs, and links to many local chapters throughout the U.S. and around the world.

Predicting markets and sectors is a tricky game, and most forecasting models have a hard enough time getting the next week or month accurate.  Modeling for a decade or a generation is that much harder.

JON C.  OGG

After the close of trading on Wednesday, First Solar announced that it has signed agreements with 7 key customers that will generate an increase of some 380 megawatts in orders for 2011 that is above its previously announced volumes.  After looking through various forecasts, our data showed that there is an expected 2,124 MW of capacity expected in 2011

While there has been much concern over levels in Europe over subsidies ending periods and over tighter budgets, the company went on to say that the expanded contracts are with existing customers and will serve predominantly European markets.

It further noted that its customers continue to expect robust growth in the market for solar electricity in Europe in 2011 and this additional sales volume will allow the company to continue to scale up.

As far as when these were brought in, the new contracts were said to be “all signed in recent weeks and follow announcements that First Solar is planning to add manufacturing capacity in Germany and France in order to better meet local demand and to encourage the development of the market for utility-scale solar electricity.”

First Solar shares closed down 2.8% in regular trading today at $138.64, and shares rose 1.5% to $140.80 in the after-hours session.

First Solar has a weighting only about 2.24% of the PowerShares WilderHill Clean Energy (NYSE: PBW), but it has the largest weighting in the Claymore/MAC Global Solar Energy (NYSE: TAN) or Guggenheim Solar ETF (NYSE: TAN) with a weighting of 12.79%.

JON C. OGG

iSuppli has data out today showing that PV installations in 2011 will slow somewhat compared to the blistering pace of 2010.  The data noted, “Assuming the U.S. dollar/euro exchange rate remains above $1.20/€, iSuppli predicts crystalline silicon solar cell prices will not increase in 2010 and instead will decline by 5 percent compared to 2010.  Prices for installations in 2011 will fall slightly more, decreasing by approximately 10 percent on average in Europe. Installation prices will decline to compensate for reduced subsidies in the largest markets of Germany, Italy and France.”

There is a lot more to this story.  First, there are some positives for PV-makers and the companies that supply parts and materials around them.  Growth is expected to remain.  Just like the argument over an expansion continuation or a double-dip recession, it is the contraction of the growth that makes it seem so muted.

The other issue at hand is that this still leaves a growth in 2010 and in 2011.  We are now in the second half of 2010 and stock markets try to act as discounting mechanisms that try to factor in the economic trends for six months to twelve months out.  If that is the case, then in just six months or from now the stock market is going to be factoring in significant slowing of growth trends in the sector.

A last issue is the notion of pricing.  With a $1.20/Euro rate holding, iSuppli predicted that crystalline silicon solar cell prices will not increase in 2010 “and instead will decline by 5 percent compared to 2010.  Prices for installations in 2011 will fall slightly more, decreasing by approximately 10 percent on average in Europe.”

Last week we saw First Solar, Inc. (NASDAQ: FSLR) beat earnings and raises 2010 guidance from a range of $6.80 to $7.30 EPS to a new range of $7.00 to $7.40 EPS.  Shares fell from over $135.00 down to under $130.00.  The stock now is around $126.50.  The company has what iSuppli feared working against it: subsidy cuts in Europe.  It leads the race in the price to lower and lower costs for utilities and power companies.  That may lead to more market share, but this is a race to see who can keep their operating margins at a rate of decline that is less than the decline in prices.  It claims 18% share or so and has produced over 26 million solar modules.  First Solar said gross margin compressed to 48.3% from over 56%, but it cut approximately $0.05 off of its PV per-Watt module manufacturing cost to about $0.76.

MEMC Electronic Materials Inc. (NYSE: WFR) was also recently downgraded by Jefferies with 2010 acting as a peak earnings year and peak margin year.  Too bad considering a price drop in shares from $90 to $10… ouch.  Its last earnings report failed to enthuse investors and shares are danger-close to 52-week lows.

Solarfun Power Holdings Co. Ltd. (NASDAQ: SOLF) announced plans last month to increase its cell capacity by 50 MW via more manufacturing capacity while also converting 160 MW of its existing cell lines into high-efficiency selective emitter technology by early 2011.

SunPower Corporation (NASDAQ: SPWRA) was downgraded in the middle of last month over at Jefferies because of its leveraged balance sheet and higher cost structure despite a brand-premium and price-premium.

Applied Materials Inc. (NASDAQ: AMAT) recently announced that it would restructure its solar energy division by cutting jobs and effectively closing down unprofitable thin-film solar panel production lines.  What does that tell you on margin expectations elsewhere ahead?

ETF-trading has not offered much solace for Green Investing.  Claymore/MAC Global Solar Energy (NYSE: TAN) is up Monday but the $7.84 price compares to a 52-week trading range of $6.02 to $11.47.  The PowerShares WilderHill Clean Energy (NYSE: PBW) is more diversified and up 1.4% at $9.29 its 52-week trading range is $4.00 to $11.95.

Barron’s recently panned First Solar (FSLR) shares, although much of the reasoning behind that was a secular-issue around being a solar company.  Germany, Italy, and Spain have all either cut subsidies or are expected to.  China is a wild card, but the Chinese solar panel makers are going to win there if it is even a financial win situation.

What appears to be happening is the reality that green energy lovers have hoped would come or would get close: pricing parity, and ultimately price discounting.  For solar investors that is not a good thing.  That means that solar modules can be bought cheaply enough that the price for the same watt and megawatt becomes the same cost as conventional energy solutions.  Or cheaper.  Guess what happens to margins for solar panel manufacturers there.  At least power companies, residences, and businesses will be able to get around some at least of the high costs and uncertainties around the pricing of traditional power.

JON C. OGG