One of the more absurd phenomena in energy discussions is the reverence accorded to Wallstreet. If an investment bank says something nice about renewables this is treated as uniquely credible message. That it is often people with left wing sympathies who do this, makes the phenomenon even more absurd. This is how the process works. Bankers write non-peer-reviewed report on something. Then copy-pasters in environmental/renewables media credulously repeat what was said (minus conflicts of interests statements) without ever linking to the original report. Here is a recent example from UBS and Citigroup (also in Guardian). If you read the report there is not much. Strong claims are backed up mainly by hot air and some comparisons are so absurd as to be comical. For example, one talking point was that electric vehicle is already cost competitive with a conventional car. What was not highlighted by the bankers, was that their “conventional car” was Audi A7, “an Audi limo for those who like to drive as well as waft about in luxury”
In recent years some of these reports have been written by Vishal Shah for the Deutsche Bank. He has told us, for example, how “solar will Dominate World Energy Supply in Just 15 Years” or in 2014 how second solar gold-rush was imminent. Both reports had “important conflict disclosures” and readers were encouraged to read them elsewhere. (They disclose important financial stakes in companies whose stocks they recommend.)
But who is Vishal Shah? Googling him reveals that before being hired by Deutsche he contributed to the success of Lehman Brothers (and Barclays). Being a financial analyst he has left behind a trail of recommendations which help us to understand how clear his crystal ball actually is.
- In 2008 Shah predicted that polysilicon prices will increase by another 20%. As if on cue, prices collapsed.
- He promoted Evergreen solar stocks. The company promptly drifted to bankruptcy.
- He has been cheerleading First solar, whose stock collapsed.
- He has also been cheerleading Suntech Power, which (this is getting boring isn’t it?) went bankrupt.
- When the second gold rush was supposed to begin, solar stocks proceeded to drop substantially.
His ranking among the analysts is less than stellar. Poor guy. I don’t in fact think that Shah is worse than other analysts. He has the misfortune to work in a field that has been a lousy investment. He came to my sights only because he happens to generate very visible nonsense on a topic that I follow rather closely. It is a cause for concern when people base their faith on fighting complex long term challenges such as climate change on analysts whose work is, after all, about selling financial instruments during the next quarter. These people do not have a special crystal ball that makes them any wiser than random person from the street.