Hey There Income Hunter,
Biden declared a 24-month tariff exemption on Monday for solar panels from four Asian nations.
So, my initial thought was that this is a positive for foreign policy, but then I read that the move is a victory for the Asian solar panel installers at the expense of U.S. solar panel manufacturers.
If this is just another loss for US manufacturers …
Why not keep the tariffs in place and subsidize US manufacturers?
On one hand, the discussion has focused on energy independence and building up domestic solar supply chains … Now the decision is to go backwards and send more money to China instead.
Here is the worst part: China has been avoiding the tariffs by having the panels delivered from Asian countries that were not included in the tariffs like Vietnam and Malaysia.
So, now there is an investigation on Chinese companies accused of circumventing tariffs that has thrown the entire US renewable-energy industry into chaos.
This is not the only outrage …
Today I reveal the costs involved to transition from fossil fuels to green energy ….
The $131 Trillion Black Hole
The master plan for limiting global warming to 1.5 degrees Celsius is $131 trillion … so far.
Meanwhile, economists warn that it will cost many more trillions than anticipated.
Here is a rough distribution of funds:
According to the Wall Street Journal, the money will be split between public and private companies.
So, let’s get this straight.
Just as we are heading into a long drawn out global recession, which could take two years to recover from, we are staring at another $131 trillion+ of debt?
The first thing that is planned is to phase out fossil fuels. This will be done by redirecting $24 trillion dollars budgeted for fossil fuels to energy transition technologies.
OK, so instead of building capacity in energy that is available today, we will add another $131 trillion in debt to the current $300 trillion global debt.
Carbon taxes, along with subsidies, higher taxes, and direct investments will all be used to incentivize this transition.
Governments will have to retrain existing fossil fuel workers for new jobs in the clean energy sector.
No Turning Back Now
I could not think of a worse time to introduce a colossal global project than the midst of an energy crisis. Can you imagine how bad this will look in two years when raw materials needed are in short supply and much higher in cost?
Do they really think older age workers that have been digging coal or working on oil rigs will be interested in putting screws into solar panels all day?
There is no turning back, so let’s take the next step.
Let’s … Make Money?
Well, one thing is for sure.
Removal of the tariffs allows solar installers and utilities to resume all the projects that were put on hold.
I have been writing about solar recently and you can read about it here .. Solar is the NOW Play .
The ETF I selected is the Invesco Solar ETF (Ticker: TAN), and the good news is that TAN's holdings include the top companies in China and the US.
Here is an update on TAN from yesterday’s trade:
Notice the price is flirting with the 200-day moving average (DMA) at $76.90. I own a simple 76/79-strike call spread.
I sold half my position here since the stock is getting overbought and could back test the breakout above the downtrend.
You may want to be patient and jump in just below the $74 price if you have the chance.
Bring It Home
You know the old saying … If you can beat ‘em … join ‘em …
The green revolution rolls on.
I can only imagine how high the price tag for clean energy will ultimately be … However, it will be a massive buildout and there will be some awesome trends to trade in the process.
Also look for opportunities in silver and copper, which will both be in demand for electric grid upgrades, solar and EV …
I think the weeks ahead are an ideal time to accumulate the commodities because as you may know … The Fed will be printing money again in no time.
Have a great day and as always …
Live and Trade With Passion My Friend,
Griff