North Coast Solar Stocks

June 8, 2009

Analysts See Solar Demand Rebound, Lower Silicon Prices

Filed under: FSLR, JASO, SPWR, WFR, YGE — Tags: , , , , , — Jason @ 6:16 pm

Posted by Tiernan Ray
barrons.com

Better late than never, I thought I’d mention two solar technology industry reports out today. Reports from analysts last week following an industry conference indicated demand for solar panel modules was picking up, but concerns about pricing of product has remained a concern.

Today, Barclay’s Capital Research analyst Vishal Shah writes that the price of the basic ingredient, polysilicon, could decline to $50 per kilogram from the current $65 to $75 per kilogram by the end of this year as “the next phase of supply ramp” begins in the second half. Specifically, he’s forecasting the industry to produce 90,000 metric tons of poly-si this year, up from a prior estimate of 83,000. He sees supply rising to 138,000 in 2010 and 166,000 in 2011, up from prior estimates of 122,000 and 153,000. This is a negative for MEMC Electronic Materials (WFR), a major producer of poly-si, and could cause the company to scale back its own production plans. Nevertheless, he still rates MEMC stock “Overweight” on a recovery in the semiconductor business. Shah is also positive on JA Solar Holdings (JASO), Yingli Green Energy (YGE), SunPower (SPWRA, SPWRB) and First Solar (FSLR).

Meantime, Broadpoint/Amtech analyst John Hardy says panel demand should pick up next year as a result of the “sunset” on Treasury Department provisions for tax rebates on solar panel installations. Specifically, Hardy writes that the American Recovery and Reinvestment Act passed by Congress in February allows for a 30% rebate on capital costs for solar installations within 60 days of the completion of a project.

That could pry open some pockets to get projects started that have been stalled by a lack of financing, he thinks. ”While the US market remains stagnant due to continued lack of liquidity and delays in establishing the process for physically accessing the funds, we believe the Department of Treasury is targeting an updated application process for the June/July time frame, and that this could provide a catalyst for demand.”

Today, solar stocks were mixed:

* First Solar rose $1.87, or 1%, to $183.97;
* SunPower fell $1.68, or 5%, to $29.89;
* JA Solar rose 2 cents to $5.15;
* Yingli rose 37 cents, or 2.5%, to $15.28;
* and MEMC fell 28 cents, or 1.4%, to $19.51.

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