J.P. Morgan Expands Its Investment In Solar Energy

Today I learned for the first time that J.P. Morgan (JPM) has a sizeable portfolio of alternative energy investments. Through J.P. Morgan’s Energy Investments group the company has grown a 6 gigawatt portfolio over the last 7 years. This multi-billion dollar portfolio is co-owned with 13 energy firms and is mainly focused on wind energy.

On Wednesday, JPM executed on its plan to expand its solar investments with its first distributed generation solar energy program. JPM selected SunEdison, a subsidiary of MEMC Electronic Materials, Inc (WFR), for this $60 million project:

“Under SunE Solar Fund X, SunEdison will finance, construct, monitor and maintain photovoltaic power plants at client (host) locations. In return, the solar hosts will buy the energy produced to offset their demand from the grid typically at prices at or below retail rates. The JPMorgan financing will help public and commercial clients realize the benefits of solar without the upfront capital costs typically associated with solar deployments.”

This is a tiny bit of good news for WFR which has suffered through a series of disappointing earnings reports over the last two years. For example, the earnings report from last May led to a 19% one-day decline. I thought the selling was overdone at that time, but the selling pressure was relentless. It did not end until a 15% one-day drop in reaction to July’s earnings finally created the wash-out conditions that I thought had occurred in May. Several analysts threw in the towel with downgrades to “underperform” and “sell.” Volume surged to more than three times normal, just short of the volume surge in May. WFR is now right at the edge of a breakout above its 200DMA and within sight of its closing lows from May’s earnings report.

(Click for a larger view)

(Click for larger view)
*Chart created using TeleChart:

(Interesting side note: At the of 2009, JPM commissioned a very interesting report on China’s “Clean Revolution” as part of its Hands-On China Series. The report was written under the direction of Changhua Wu, Greater China Director, The Climate Group. Click here to download the report from J.P. Morgan’s website).

Be careful out there!

Full disclosure: long WFR