It was in 1991 when I got my first barstool lesson in human behavior.
Nursing a $0.90 draft at a local bar in York, PA, a sour old bartender saved me from what could've ended up in a reassembling of my "know-it-all" attitude by a 30-something barfly who didn't take kindly to the loud-mouthed opinions of college kids.
I don't exactly remember how it happened, but at some point, I made an unpopular comment about a local bureaucrat who, apparently, was much loved by the locals.
Fortunately, before it got ugly, the bartender interrupted my diatribe and told me something that I've heard hundreds of times since then.
He said, "Son, there's two things you don't talk about in a bar. Politics and religion. So end it or move on"
I suppose everyone has to learn this lesson at some point. But if you're ever in Baltimore, and you decide to grab a drink at a local watering hole, I might suggest not talking about electricity prices and rate hikes, either.
Certainly, I got an earful last weekend after taking on this one.
Enslaved by Reality
In 2006, the state imposed rate caps in Maryland expired.
The result?
A lot of pissed-off consumers, and a lot of scrambling politicians.
You see, instead of transitioning consumers to prepare them for higher rates, they were hit with price hikes in excess of 70 percent overnight.
And to this day, Maryland residents are still fired up.
But you don't want to talk about it. As I found out last weekend after telling a few people at a neighborhood bar something their elected officials should've had the cojones to tell them from day one.
I told them that they are now paying the appropriate rate of electricity. Not a discounted rate, which is what they had been receiving for the past seven years.
Oh how quickly a polite conversation can turn ugly!
I knew I wouldn't win any new friends by speaking the truth, so I paid my tab and walked out before I was thrown out.
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It's no wonder so many local politicians blatantly lied to voters last year when the proverbial poop hit the fan.
No one wanted to hear the truth. And no one was going to accept it either.
Heck, I came across an article just a few days ago where a local man said . . .
"We are being enslaved by Constellation [the local energy company] and the political establishment is aiding and abetting. . . . We're not being protected."
Enslaved? Really?
Don't you think that's a bit much?
Constellation is simply doing what it's supposed to be doing. Providing electricity and making money. And there's nothing wrong with that.
What are they supposed to do? Continue selling electricity at rates below their costs?
Nonetheless, what we're seeing in Baltimore today is something the rest of the country can soon look forward to.
Because like it or not, electricity rates are going up.
In fact, this past Monday, the Energy Department's Energy Information Administration reported that the average retail price of electricity increased by more than 9 percent last year.
The culprit?
Well, in the East it was primarily due to the lifting of retail electricity price caps.
But even if you disregard the price caps, electricity prices have increased at a 2.5 percent annual rate since 2000.
And there's little chance of that decreasing anytime soon.
But despite being persecuted by local Baltimoreans, I have to say, there's a silver lining in all of this.
Money Changes Everything
One of the main reasons you don't see solar on every roof in the U.S. is because for years, it's just cost too damn much.
Sure, it would be nice to produce your own power and never get an electric bill. But not if it's going to take 20 to 40 years for a return on your investment.
Fortunately, those days are quickly coming to an end.
The fact is, those electricity rates will continue to climb (even if at only an estimated 2.5 percent). But the cost of solar will continue to fall dramatically.
Take a look:
Sometime between now and 2015, the price of solar will dip into the average rates charged by utilities.
As a result, market penetration by solar will skyrocket . . . and investors who jumped in early, while the naysayers continued to sing their "too expensive" song, will make a fortune.
The only question is, with so many solar companies, where do you put your money now?
This past year especially, we've seen some insanely impressive gains in this sector.
From major players like First Solar (NASDAQ:FSLR), SunPower (NASDAQ:SPWR) and Trina Solar (NYSE:TSL) to smaller firms like Hoku Scientific (NASDAQ:HOKU) and my favorite, WorldWater & Power (OTCBB:WWAT)
Just look at this beautiful chart:
Of course, while some of these will continue to head north, the big money's already been made.
But that doesn't mean there won't be a whole new class of solar stocks delivering massive gains in 2008.
The race to deliver cheaper, more efficient solar isn't over yet.
In fact, we're currently following two young thin-film players right now as possible recommendations in the next few months.
As well, we just recommended this stock to our readers a couple of months ago.
So far, we're up 17 percent. But 2008 is when this thing's really going to break out.
So if you've been sitting on the sidelines, waiting for a good time to get in . . . this is it.
Join Green Chip Stocks today, and get your piece of the solar bull market right now.
Until next time...
Jeff
