Jeff Siegel

Article / Updated 01-25-2017

Energy investors should know that America is the country that made coal king. Coal from Southern and Midwestern states is what helped build the strongest economy in the world. Some of the companies that made that possible are still around and are still solid investments. Here's a look at some of the major coal mining companies: Peabody Energy (NYSE: BTU) is a large blue chip coal miner with a $5.9 billion market cap and revenue of $8 billion. Sales fell 9.5 percent in 2012 over 2011. Peabody mines both thermal coal and metallurgical coal and has majority interests in 28 coal projects in the United States and Australia. It also trades and brokers coal, serving clients in almost 30 countries on 6 continents. At the end of 2012, Peabody had around 9 billion tons of proven and probable reserves and was well positioned for high-growth Asian markets with sales volumes for thermal and metallurgical coal from Australia both breaking records. CONSOL Energy (NYSE: CNX) is a blue chip coal miner with headquarters in Pittsburgh, Pennsylvania. Consol has a $7.7 billion market cap and revenue of $5.4 billion. Sales were down 12.6 percent in 2011. The company produces Appalachian coal for sale to electric utilities and steel makers worldwide and is also a leading natural gas producer in the Marcellus and Utica Shales. Its coal division mines and processes both metallurgical and thermal coal. It's not a pure play on coal, however, as a substantial percent of its revenue comes from its gas division, which explores for unconventional gas, including coal bed methane. At the end of 2012, it owned more coal reserves than any other U.S. company, controlling 4.5 billion tons. CONSOL also controls 4 trillion cubic feet of proven natural gas reserves. Alpha Natural Resources (NYSE: ANR) is a mid-cap coal miner with a market value of $1.8 billion. In 2012, the company had revenue of $7 billion, which was down 19.8 percent from the year before. Alpha Natural Resources is the world's sixth largest producer of thermal coal and the third largest producer of metallurgical coal. Its operations are located in West Virginia, Virginia, Pennsylvania, Kentucky, and Wyoming, and it ships to customers on five continents. It can export from multiple terminals on the East and Gulf coasts, and it has a 41 percent interest in Dominion Terminal Associates in Newport News, Virginia. The company has 145 mines and controls 4.7 billion tons of coal reserves. Arch Coal (NYSE: ACI) has $1.2 billion market cap on $4.1 billion in sales. Revenue for 2012 fell 27.1 percent over 2011. Arch Coal produces and sells both types of coal from surface and underground mines in the United States. It has mines in every major U.S. basin, including Powder River, Appalachia, Western Bituminous, and Illinois. Arch controls 5.5 billion tons of coal reserves. Walter Energy (NYSE: WLT) is a mid-major with $1.9 billion market cap on sales of $2.4 billion. Walter saw its revenues drop 33.1 percent in 2012 over 2011. It operates surface and underground mines in the United States, Canada, and the United Kingdom and controls more than 330 million tons of reserves. Walter also has a subsidiary specializing in specialized blends of coking coal as well as a coal-bed methane gas division with more than 1,700 wells that produced 18.1 billion cubic feet in 2012. American coal miners have been through a tough slog. Cheap natural gas and oppressive EPA regulations made most investors sell U.S. coal over the past few years, with the major players down more than 50 percent since 2008, as seen in this figure. Since late 2012, some of those stocks have shown signs of appreciation. In the final quarter of 2012, Peabody, Alpha Natural Resources, CONSOL Energy, and Arch Coal all beat the earnings expectations of analysts. And other than Arch Coal, the other companies registered better-than-expected revenue for the quarter. This table shows earnings per share (EPS) and revenue beat for these companies for the fourth quarter (4Q) of 2012. EPS and Revenue Beat for Four U.S. Coal Companies (Fourth Quarter 2012) Company 4Q 2012 Actual EPS ($) 4Q 2012 Est. EPS ($) Earnings Surprise % Revenue Beat % Peabody Energy (BTU) 0.36 0.25 44% 4% Alpha Natural Resources (ANR) (0.19) (0.55) 65% 3% CONSOL Energy (CNX) 0.43 0.24 80% 6.5% Arch Coal (ACI) (0.14) (0.15) 6.7% (3%)

Article / Updated 01-25-2017

One reason natural gas investment prospects are better in North America than the rest of the world is that fracking (hydraulic fracturing of rock) is causing a bona fide natural gas boom right now. Most natural gas production in the United States comes from shale and tight gas; these are reserves of natural gas trapped deep in shale and sedimentary rock that are too hard to drill through. Fracking solves this problem by combining water, sand, and chemicals and injecting this mixture at high pressures to fracture the rock and release the gas. U.S. companies have perfected the fracking technique, allowing the U.S. to pass Russia as the world's top natural gas producer. Fracking is now being pursued in many other countries around the world. Here's a look at how fracking affects projections for natural gas production in the U.S. through 2040: Although every other source of U.S. dry natural gas output is set to drop between now and 2040, production from shale and tight gas is projected to increase. Interestingly, many natural gas investors aren't able to separate the two from each other. It may seem subtle, but the differences exist: Tight gas: This source of natural gas is pretty much what it sounds like — deposits of natural gas trapped in a tight rock formation, typically sandstone or limestone, with little to no porosity. Shale gas: Shale gas is found in layers of sedimentary rock such as shale. Because the rock lacks the porosity to let the gas flow freely from the formation, companies combine horizontal drilling with hydraulic fracturing to make these plays commercially viable. These two sources account for nearly all growth in natural gas production to 2040. Shale gas made up nearly one-third of total production in 2011. It's expected to make up half of U.S. total domestic gas output by 2035. This table lists some shale gas plays that are worth checking out further: Top Shale Gas Formations Shale Formation Undeveloped Technically Recoverable Shale Gas (Trillion Cubic Feet) Marcellus 141 Tcf Haynesville 75 Tcf Barnett 43 Tcf Fayetteville 32 Tcf Woodford 22 Tcf Eagle Ford 21 Tcf Antrim 20 Tcf Despite the added benefits and hype surrounding U.S. shale plays, it pays to keep a level head. Two major hurdles for shale companies to overcome are steep decline rates during the early life of wells in these formations and the exorbitant price tag that comes with each one. When you're doing your due diligence when researching a prospective company focusing on shale gas production, always check to see how the company is dealing with these two major hurdles. Encana Corporation (NYSE: ECA), one of the leading natural gas producers in North America, shocked investors in February 2013 by announcing that it would actively drill the Haynesville shale in Louisiana. Encana was able to lower drilling costs by employing a new drilling method called multi-well pad drilling. It's only a matter of months or years before multi-well pad drilling becomes the norm for shale plays throughout the United States. This technique increases efficiency and lowers costs in many ways, as it allows multiple wells to be drilled from a single location, called a pad. Reducing the number of pads but increasing the number of wells: Reduces land and surface disturbance Gives landowners more control over where and how many pads are placed Eases the permitting process because most cities require a permit for each pad Increases efficiency by getting more gas out of a reservoir faster Reduces equipment costs by consolidating operations Companies using this technology, including Devon Energy (NYSE: DVN), are fast gaining an edge over the competition.

Article / Updated 01-25-2017

For energy investors to successfully trade oil and gas futures, understanding the basic drivers behind oil and gas prices is imperative. In a perfect world, a market’s fundamentals would revolve entirely around demand. That is, you have a buyer with a specific amount in mind, willing to pay a certain price. Rarely, however, is that the case. You’ve seen firsthand that oil and natural gas prices aren’t set in stone. One day you fill up your gas tank for $4 per gallon, and the next day you regret the decision because prices are suddenly 20 cents cheaper. Three basic factors are at work here: a mishmash of supply, demand, and market opinion (from both a geopolitical and technical perspective) that come together to shape prices over the short and long term. An economics professor would tell you that everything comes down to supply and demand and that price is simply a reflection of the relationship between the two. In a nutshell, higher supply leads to lower prices and vice versa. By now, you should know that oil markets don’t play by the usual rules. How high the price at the pump climbs doesn’t matter because, chances are, your car (and more than 90 percent of the transportation sector) won’t run on a different fuel at the drop of a hat. If your house runs on heating oil, that leaves you relatively few options during the winter months — buy more heating oil or pay to switch fuels. You can lower the thermostat, but you’re still going to heat your home. Supply It takes different crudes to move the world, and not all crudes were created equal. You may only be familiar with the top grades of crude: West Texas Intermediate (WTI) and Brent Blend from the North Sea. The quality of crude oil is based on its American Petroleum Institute (API) gravity, which measures the weight of the liquid compared to water. Typically, having an API gravity higher than 10 indicates that the crude is lighter than water. Anything less than 10 is heavier and sinks. The sulfur content of crude oil is also measured. When it has a sulfur level of more than 0.5 percent, it’s considered sour. Anything less than 0.42 percent sulfur is considered sweet. Overall, light, sweet grades of crude are more desirable for refineries because they’re cheaper and easier to refine. In total, there are more than 100 different grades and types of crude oil. This table is a list of some of the more familiar ones found within the United States. Types of U.S. Crude Oil Type API Gravity Sulfur Content Alaska North Slope 31.9 0.93% Bakken Blend 42.0 0.17% Bayou Choctaw Sour 32.2 1.43% Bayou Choctaw Sweet 36.0 0.36% Bonito Sour 35.5 0.99% Heavy Louisiana Sweet 32.9 0.35% LA Mississippi Sweet 40.7 0.34% Light Louisiana Sweet 35.6 0.37% Mars Blend 30.3 1.91% Port Hudson 45.0 1.97% South Louisiana Sweet 35.9 0.33% West Texas Intermediate 39.6 0.24% West Texas Sour 31.7 1.28% Williams Sugarland Blend 40.9 0.20% For a long time, West Texas Intermediate was considered the global benchmark for crude oil. Its top quality makes it ideal for refiners to produce gasoline. Location is an added bonus — WTI is produced close to the Midwest refiners, as well as those found along the Gulf Coast area. Members of the Organization of Petroleum Exporting Countries (OPEC) control about 80 percent of the world’s oil reserves. The OPEC reference basket is also used as an important benchmark for oil prices. It’s the average of prices for its members’ crude blends, which you can find in this table. OPEC publishes its basket price daily on its website. OPEC Oil Basket Crude Blend Country Saharan Blend Algeria Girassol Angola Oriente Ecuador Iran Heavy Iran Basra Light Iraq Kuwait Export Kuwait Es Sider Libya Bonny Light Nigeria Qatar Marine Qatar Arab Light Saudi Arabia Murban United Arab Emirates Merey Venezuela Within the last few years, Brent Blend crude oil successfully replaced WTI as the global benchmark for crude pricing. The two have historically traded relatively close, but the price gap began to widen in 2010, and Brent now trades at a considerable $15 per barrel premium to WTI. This figure shows the price divergence since 2007. Although it usually comes down to who you ask, it seems that more analysts and government reporting agencies are starting to accept that Brent crude is a better reflection of a global price benchmark. In fact, the EIA adopted Brent crude for its price forecasts for the first time in its Annual Energy Outlook 2013. Brent Blend is made up of production from about 15 different fields in the North Sea. The API gravity of Brent crude is 38.3, with a 0.37 percent sulfur content. In other words, it’s not exactly as light as WTI. Demand Contrary to popular belief, future demand growth for crude oil won’t come from the United States. America may account for one-quarter of global demand today, but that dynamic is going to change dramatically over the course of a few decades. The largest growth will come from countries outside the Organisation for Economic Co-operation and Development (OECD), specifically from China, India, and countries in the Middle East. This demand growth is illustrated in this figure, which is taken directly from BP’s Energy Outlook 2030 report. There’s a good reason why demand slows or declines in these developed countries. Oil and liquids demand is centered on the transportation sector. Countries with high consumption rates (like the United States) experience a decline in demand for various reasons, such as better vehicle efficiency or the substitution of other fuels in place of oil. In non-OECD countries like China, for example, total liquids demand is projected to reach 17 million barrels per day (mb/d) in 2030, nearly double its current consumption rate.

Article / Updated 01-25-2017

Energy investors find that it is impossible to have a discussion about national oil companies (NOCs) without shining a light on OPEC. By the end of 2011, more than 80 percent of the world’s proven oil reserves rested in the hands of the 12-member oil cartel. OPEC was created in the 1960s by five founding members: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. At the time, international oil companies ruled the world’s oil supply. The ten largest NOCs are in OPEC. Only one of them, however, holds all the cards: Saudi Arabia. This figure breaks down OPEC reserves by individual members. Saudi Arabia’s Ghawar oil field is the largest of its kind. Considered a super-giant oil field, Ghawar pumps out a monstrous 5 million barrels per day and has been in production for more than 60 years. Four of the top ten oil-producing countries in the world are OPEC members — Saudi Arabia with 10.5 MMbbls/d, Iran with 4.2 MMbbls/d, United Arab Emirates with 2.8 MMbbls/d, and Nigeria with 2.4 MMbbls/d. Because OPEC members raise and lower their production targets and quotas based on the current supply and demand, the amount of spare capacity has become a major issue. Spare capacity refers to the ability of a country to produce more oil. Basically, will OPEC be able to increase production in the event of a supply constraint? This is a more serious problem for OPEC than you may first think because the only member with significant spare capacity is Saudi Arabia. In the event of a supply constraint, the entire world is relying solely on Saudi Arabia to turn on the taps and pick up the slack. Failure to do so would result in a spike in oil prices. Although you can’t directly trade state-owned oil companies in OPEC like Saudi Aramco, the 12-member cartel can provide vital information and greatly influence global oil markets. Periodic meetings can swing oil prices in both directions depending on any changes in production. Don’t confuse government-owned national oil companies with multi-national corporations, which are simply companies that operate in more than one country.

Cheat Sheet / Updated 03-27-2016

Investing successfully in energy involves a lot of research into many different aspects of energy production and consumption. You can invest in commodities such as coal, oil, and natural gas, or you can purchase stock in an oil company or a company that builds natural gas power plants. You need to keep an eye on not only the energy markets but also the global economy and the news of the day.

Article / Updated 03-26-2016

You've likely heard about the highly controversial subject of hydraulic fracturing — referred to as fracking by today's media — at one point or another within the last few years. But contrary to popular belief, it's only fairly recently that the fractious row began over this drilling technique. Hydraulic fracturing has actually been around for over six decades. Oil and natural gas companies frac to create fractures in a rock formation; they do this by blasting the rock with a high volume of water, proppant (sand, in most cases), and chemicals. Mixtures can differ from company to company, but the typical makeup of frac fluid is about 99 percent water and sand, with the rest consisting of a variety of chemicals. Even though fracturing technology dates back as far as the U.S. Civil War, it wasn't until 1949 that the Stanolind Oil used hydraulic fracturing on a well in Kansas. More and more companies followed suit. Today, more than a million wells have been fracked since Stanolind successfully did it in Kansas. So why is there so much public outrage now, after the technology has been in use for so long? It's likely because for the first time in history, hydraulic fracturing is standing front and center in a U.S. oil and natural gas production boom. You have to understand how critical hydraulic fracturing is to tight oil and gas production (shale). True to its namesake, a tight rock formation has extremely low permeability, which means the oil and natural gas doesn't flow freely. Thus, companies will utilize hydraulic fracturing technology to successfully "crack" the rock and extract the resource. Of course, shale drilling has reached a feverish pitch today, with horizontal wells (the telltale sign of shale production) accounting for over 60 percent of the total wells drilled in the U.S. And U.S. reliance on fracking doesn't end there. Haliburton estimates that 90 percent of all onshore oil and natural gas wells need some form of fracture stimulation to be economical. In the future, U.S. oil and natural gas production will become even more dependent on hydraulic fracturing. The Energy Information Administration reported in its latest Annul Energy Outlook that shale — both oil and natural gas — will account for virtually all of U.S. production growth between now and 2040. Referring back to the title of this article, perhaps a more realistic question to ask is whether we can afford not to frac.

Article / Updated 03-26-2016

A new discovery in northern Saskatchewan, Canada could quickly become one of the top ten uranium deposits in the world. MacArthur River, also located in Saskatchewan, is widely agreed to be the largest deposit, containing high grades of uranium totaling about 324 million pounds. This new discovery, called Patterson Lake South, has only had a few holes drilled and is already shown to contain around 50 million pounds of uranium at high grade. Given that high grade, and the fact that uranium mineralization was found in each of the first four zones, analysts are already expecting there to be 100 million pounds of uranium, or more. The discovery was made via a joint venture between the companies Alpha Minerals (TSX-V: AMW) and Fission Uranium (TSX-V: FCU). It contains the largest uranium boulder field in the Athabascan Basin, and radioactivity readings for samples from the first four zones were reported as "off the chart." Once a potential deposit reaches reserve estimates totaling 50 million pounds or more, the major drilling companies, like Cameco, Denison, Areva, and others, start to get interested in acquiring it. These uranium majors will soon start sniffing around the Patterson Lake project, if they haven't already. Current valuation estimates show the Patterson Lake deposit, even at only 50 million pounds of uranium, could fetch a buyout price between $500 million and $750 million. Since it's a 50-50 joint venture, that equates to between $250 million and $375 million for both Alpha Minerals and Fission Uranium. As an investor, you should keep your eye on the Patterson Lake deposit and those two companies. Each have market capitalizations well below $200 million, meaning impressive upside for each if a buyout offer ever happens.

Article / Updated 03-26-2016

There are many reasons to invest in energy and all its related sectors and companies. Energy is always in demand; its use is expected to grow; and investing in energy gives you opportunities to shape the future while earning income. But what, specifically, makes energy a fertile market for investment? The following list provides some insight. The size of the energy market Valued at around $7 trillion globally, energy is the most valuable market segment on earth. Delivery of usable forms of energy to the world's seven billion people is responsible for 10% of the world's annual gross domestic product. A look at the ten worldwide companies that earn the highest annual revenue reveals that nine out of ten of them operate in the energy industry. That's because energy is so pervasive. It's required for every human endeavor. Because energy generates more revenue than any other industry, it is a prime place to stash your investment dollars. Future growth According to the International Energy Agency, global energy demand will grow by more than 30% by 2035. China, India, and the Middle East will account for two-thirds of that growth. By then, global oil demand will be around 100 million barrels per day (mb/d) — up from 89 mb/d in 2012 — as the number of cars on the road will double to 1.7 billion. What's more, oil prices are expected to rise to $125 per barrel by then. Demand for electricity is forecast to grow twice as fast as total energy consumption, leading prices to rise 15% by 2035. Projected investment To meet rising energy demands, the world must invest $37 trillion in related production and supply infrastructure across all sectors of the energy industry over the next two decades. Over half of that total — $19 trillion — will be required by the oil and gas sector for exploration, transportation, and production increases. The remainder will go toward the electricity sector, with $17 trillion slated to be invested in upgraded natural gas and renewable generation, and an upgraded transmission and distribution network that maximizes efficiency. Recent returns As a result of constantly rising demand and prices, energy investments have returned above-average results for decades. For example, look at ExxonMobil (NYSE: XOM): Between 2003 and 2013, Exxon returned 140% compared to the Dow Jones' 40%. The same holds true between 1993 and 2013, with Exxon delivering 472% and the Dow returning 324%. And it's not just Exxon. Over the last 15 years, The Energy Select SPDR ETF (NYSE: XLE), which holds a broad ranges of energy companies, outpaced the Dow Jones Industrial average by over 220%. Diversity What do you think of when energy is mentioned? Oil perhaps? Electricity? Solar power? Wind? The fact is the energy market is so big that it encompasses a diverse array of market sectors. Oil, gas, coal, and nuclear energy only scratch the surface of the industry's offerings. Biofuels require input crops, so energy investing is also agriculture investing. Most electricity plants, no matter the energy source, need water to be cooled, so energy investing is also water investing. And in the case of solar and other clean technologies, investments and revenue more resemble the semiconductor market, so energy investing is also technology investing. Income and growth Aside from diversified companies, energy investing allows you to pursue various investment goals. You also have blue chip value plays, growth companies, income opportunities, and the chance to hit it big with start-ups and exploration companies. You'll need to determine the strategy that is most appropriate for your economic situation. But once you do, energy investing can help you accomplish it. Integrated oil and gas companies provide value and dividends, pipeline operators and master limited partnerships offer steady income payments, and immature oil and gas explorers can deliver hefty returns to the investor willing to take on a bit more risk. Insight Somewhere someone is always asking why gas prices are increasing. You never have to be that person if you invest in energy and follow it closely. You'll know that gas prices are about to tick up a few pennies when you see crude oil futures head higher. Or you'll know that when refiners switch off their summer blend, gas will be a bit cheaper in the fall. When you're invested in something, you take notice and pay attention to what affects it. With energy, you'll know how the market is impacting your day-to-day life. Conscience If you invest your money using a certain set of principles, energy investing can be a great tool. In the era of global warming and climate change, many individuals are seeking out investments that are good for their portfolios as well as the planet. In energy, you can do that by investing in companies that promote energy efficiency or produce electricity with few emissions. There are smart grid companies; solar, wind, and biofuel companies; and funds that specialize in each. DIY With the advent of exchange-traded funds (ETFs), many investment strategies are now available to the retail investor. The ability to buy an entire sector with one fund, profit from commodity prices, and employ leverage and shorting can be effectively accomplished with ETFs in the energy sector. You can buy a coal ETF, for example, to gain broad exposure to the global coal market without betting on one company. Or you can buy a leveraged fund that returns two or three times the daily price of a specific commodity. Everything requires energy Try flying a plane without energy. Or building a car. Or turning on the lights and computers at a bank. Hardly anything we do can be done without exerting energy. It's a requirement. So unlike some sectors that are dependent on consumer discretionary spending or others that have short-lived trends, energy is in constant demand. And while it's not entirely immune to swings and recessions, energy is certainly a safe and stable place to invest.

Article / Updated 03-26-2016

While the use of coal as an energy source may be on the decline in the United States, Canada, and other parts of the Western World, it's growing like gangbusters in Asia. If you aren't careful, geographically-biased news will blind you to one of the biggest developments underway in the energy sector, because news coverage in the Americas and Europe virtually ignore what's happening in the rest of the world with regards to energy production and use. In Western news, shale, wind, and solar get all the attention from the press. Meanwhile, the media ignores what is really happening in the global market right now. Coal is becoming a relic of the past in the developed world — that much we all know. Solar and wind power are rapidly growing, and we shouldn't ignore their potential. Think of it this way: The countries that are leading natural gas and renewable energy production pretty much have 100-percent market saturation for electricity. You just can't find many buildings in the U.S., Canada, or Western Europe without electricity. Meanwhile, there are 1.3 billion people in other parts of the world who don't have electricity in their homes. And still more billions of people are rapidly consuming more and more power, driving up per capita energy use. This is especially true in Asia, where China and India need to ramp up power generation as quickly as possible to prevent widespread blackouts that will hinder economic growth. According to the Energy Information Administration, the U.S. is going to see domestic coal consumption drop about 14 percent by 2017 as government intervention makes coal power prohibitively expensive compared to natural gas. On the other side of the Pacific, however, China is going to build 160 new coal-fired power plants, and India will build 46 within the next four years. The developing world is going to drive growth that will catapult coal to the number one world fuel source within seven years, surpassing oil for the first time since the 1960s. Ninety percent of the worldwide increase in coal demand will come from China and India, and 77 percent will be from China alone. China is the world's largest producer of coal. It mined 46 percent of the world's coal last year. At the same time, China imported about 223 million tonnes of coal — which represents 20 percent of the coal it burned and a 78 percent year-over-year increase. By 2016, Chinese imports are projected to reach as high as 450 million tonnes, averaging out to 50 percent year-to-year growth in a very short time frame. A lot of the coal needed to feed Chinese and Indian demand will come from Australia and Mongolia. However, U.S. and Canadian coal exports will be competing for sales. In particular, coal mining operations on the western side of the North America, especially from British Columbia and Wyoming, will be shipping more and more coal overseas.

Article / Updated 03-26-2016

Renewable energy stocks are on the mend, particularly in the solar space. After a few years of margin erosion, supply gluts, and hostile trade negotiations, solar investors who picked up cheap solar shares towards the end of 2012 are sitting on a mountain of profits today. But the question is, will it last? The answer is yes. And the reason can be summed up in one word: competition. After the market imploded in 2008, burgeoning solar manufacturers, both large and small, were quickly wiped out, leaving only a handful to survive in an incredibly hostile environment. But this turned out to be a good thing, as it allowed the industry to evolve at a much faster rate than it would have otherwise. Think of it as a necessary Darwinian smack-down that buried the weak and empowered the strong. Today, those left standing have been naturally selected and are becoming healthier and healthier in an environment that has thinned out the herd and consolidated the powerful. The result is a stronger solar sector that, according to Navigant Research, will provide a product that will be cost-competitive with retail electricity prices throughout most of the world by 2020 — without subsidies. For those looking to invest in solar energy, there are a few options, mostly cell and module manufacturers. The China-based players are the most prominent and have delivered unbelievable gains this year. Trina Solar (NYSE: TSL), JA Solar (NASDAQ: JASO) and Canadian Solar (NASDAQ: CSIQ) have been some of the biggest winners, all with gains in excess of 100 percent over the past seven months. The only concern with these companies over the long-term is that they're heavily dependent upon support from the Chinese government. Without that support (in the form of unsustainable subsidies and mandates), it would be nearly impossible for these companies to remain competitive. That being said, right now there is no evidence that China is looking to relent on its dedication to its domestic solar industry. In fact, China officials have announced they now plan to more than quadruple China's solar capacity to 35 gigawatts by 2015. To give you an idea of how much that is, today, the United States, which is one of the largest solar markets in the world, has close to 9 gigawatts of cumulative installed solar capacity. And that's after decades of steady growth. The Chinese solar industry isn't at any risk of crumbling anytime soon, but if you prefer to stick with non-Chinese players, U.S.-based SunPower (NASDAQ: SPWR) and First Solar (NASDAQ: FSLR) are two of the most successful and aggressive manufacturers on the planet. They can compete with China's low-cost production with technologically-superior products, and both are also now successfully competing outside of the United States as well. Another way to get solar energy into your stock portfolio is through financing and leasing companies. SolarCity (NASDAQ:SCTY) is a quality pick. The company is one of the most successful solar financing and leasing companies in the United States, and in two years it plans to introduce storage systems for its customers. This effectively means that its customers can generate electricity during the day, store it in an advanced battery packs, and use it at night, when the sun goes down. Basically, SolarCity has figured out a way to make solar energy work at night. This is a major game-changer that could take SolarCity to new highs. And, along the way, the company continues to land major deals with companies like Honda (NYSE: HMC), Wal-Mart (NYSE: WMT), and PulteGroup (NYSE: PHM) — not to mention the deals it already has in place with the U.S. military. SolarCity is probably one of the smartest solar investments you can make in the near future.