North Coast Solar Stocks

December 15, 2009

Yingli Green Energy Announces Major Business Milestones

Filed under: YGE — Tags: , , , , , — Jason @ 6:00 am

Commences Trial Production and Reaches Certain Key Technology and Operating Milestones at In-house Polysilicon Manufacturing Facility
Hits 1 GW in Accumulated Output of PV Modules

6:00 am EST, Tuesday December 15, 2009

BAODING, China, Dec. 15 /PRNewswire-Asia-FirstCall/ — Yingli Green Energy Holding Company Limited (YGE) (“Yingli Green Energy” or the “Company”), one of the world’s leading vertically integrated photovoltaic (“PV”) product manufacturers, today announced that it has successfully commenced trial production and reached certain key technology and operating milestones at Fine Silicon Co., Ltd. (“Fine Silicon”), its in-house polysilicon manufacturing facility with an annual production capacity of 3,000 metric tons (“MT”). The Company also announced that its total output of PV modules has reached 1 GW since the Company began commercial production in 2002.

Commences Trial Production and Reaches Key Technology and Operating Milestones at In-house Polysilicon Manufacturing Facility

Yingli Green Energy announced its in-house polysilicon manufacturing facility, Fine Silicon, has commenced trial production and reached certain key technology and operating milestones. Designed to have an annual production capacity of 3,000 MT, the Baoding-based facility is expected to reach full production volume in late 2010. With state-of-the-art facilities and advanced monosilane-based polysilicon manufacturing technology, Fine Silicon is expected to be capable of producing high quality solar-grade and electronic-grade polysilicon through energy-efficient and environmentally-friendly manufacturing processes. Compared with the trichlorosilane (“TCS”)-based polysilicon manufacturing technology, the advantages of the technology that Fine Silicon has adopted include significant electricity savings and low environmental impact. Fine Silicon’s process utilizes no chlorides or TCS, and sulfate, its by-product, is easily treated.

“With Fine Silicon on-line, Yingli Green Energy will join a limited number of global PV manufacturers with fully vertically integrated business models covering the manufacturing process from polysilicon to PV modules,” Mr. Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy, commented. “As one of the world’s leading vertically integrated PV product manufacturers we look forward to further improving our cost structure, enhancing our operating performance and increasing our flexibility as we expand our global footprint.”

Mr. Miao also noted that Yingli Green Energy completed the construction of Fine Silicon in less than two years.

Accumulated Output of PV Modules Hits 1 GW

Yingli Green Energy also announced that since the Company began commercial production in 2002, it has produced a total of 1 GW of PV modules under the “Yingli Solar” brand.

Through a series of expansions, the Company has increased its annual production capacity for each of polysilicon ingots and wafers, PV cells and PV modules to 600 MW as of September 2009, up from an initial 3 MW in 2002. Annual shipments of PV modules increased from 4.7 MW in 2004 to 282 MW in 2008, and are expected to be between 490 MW and 500 MW for 2009, resulting from high product quality, extensive international sales channels and a well-recognized brand. In total, 1 GW of PV modules has an annual power output of over 1 billion kilowatt hours, which corresponds to displacement of approximately 1,000,000 tons of carbon dioxide emissions annually. In addition, Yingli Green Energy has created nearly 6,000 jobs across various areas of its business.

Mr. Miao noted that as shipment volume of “Yingli Solar” PV modules keeps growing, Yingli Green Energy’s PV technology has made significant advances, and the technical improvements resulting from the Company’s research and development efforts have been instrumental in significantly reducing its manufacturing costs and improving the performance of its products.

December 14, 2009

MEMC Electronic Materials: Citi Cuts Target, Estimates On Lower Poly Prices

Filed under: WFR — Tags: , , , , — Jason @ 1:19 pm

By Eric Savitz

Citigroup analyst Timothy Arcuri today trimmed his price target on MEMC Electronic Materials (WFR) to $16, from $20, and cut his EPS estimates to reflect lower spot market pricing for polysilicon. He now sees the poly and silicon wafer posting a 2009 loss of 22 cents a share, worse than his previous forecast of a loss of 5 cents. For 2010, he goes to 44 cents, from 57 cents.

Arcuri keeps his Hold rating on the stock.

WFR today is off 7 cents at $12.50.

December 9, 2009

Huge Poly Glut Coming In 2010, Soleil Analyst Says

Filed under: none — Tags: , , , , — Jason @ 12:04 pm

By Eric Savitz

The solar industry should brace for a huge glut of polysilicon in 2010, Soleil Securities analyst Paul Lemming warns today, with prices likely to head sharply lower.

Over the next three quarters, he calculates, the amount of polysilicon available to the solar market is going to increase by about 70%. He says it is true that the poly market became “snug” in the third quarter due to a jump in seasonal installations, but adds that conditions will change in the 2010 first half “as every major producer of polysilicon ramps new capacity.”

He thinks the industry is facing the prospect of 60%-80% over supply next year, with no hope of a more balanced market before sometime in 2011 at the earliest.

In Lemming’s view, the spot price of polysilicon is heading to the mid $30s per kg over the next six months – from $50-$55 range – with prices below $30 “not out of the question.” The analyst notes that there is a widespread notion that pricing will hold at current levels over the nest year, but adds that is likely only if things are different this time – “and this time is never different.”

He notes that prices at $55/kg provide “reinvestment level economics for established producers,” and would make polysilicon “the first commodity we are aware of to have pricing – in a grossly over-supplied market – remain at or above reinvestment level pricing.” Lemming notes that “commodity after commodity sees the spot price move to the cash cost of production of the high-cost plant whose output is needed to supply the last kilogram of demand.” He finds that all poly demand can be supplied by plants with cash costs at or below $35/kg. Lemming notes that five years ago, the spot price of poly for the solar market was below $30, and that some business took place at prices below $25. The implication: we could end up at those price levels again in 2010.

LDK Solar Reportedly Plans Polysilicon Spinout

Filed under: LDK — Tags: , , , , , — Jason @ 9:28 am

By Eric Savitz

LDK Solar (LDK) plans to spin off its polysilicon business as an IPO on the Hong Kong Stock Exchange, according to JLM Pacfiic Epoch, which cites a report on the Chinese site that quoted LDK CEO Peng Xianfeng.

Peng reportedly said that he believes poly prices will in the future not exhibit the large fluctuations that have characterized the markets in the recent past.

LDK in November sold a 15% stake in its its polysilicon plant in Xinyu City, China, to Jiangxi International Trust for about $219 million.

LDK this morning is up 25 cents, or 2.8% to $9.30.

December 8, 2009

Hoku sets payment dates with Solarfun, shares rise

Filed under: HOKU, SOLF — Tags: , , , , — Jason @ 1:10 pm

Hoku shares rise after setting payment plan with Solarfun for polysilicon supply deal

1:10 pm EST, Tuesday December 8, 2009

NEW YORK (AP) — Shares of solar products maker Hoku Scientific Inc. (HOKU) soared in morning trading after it said it set payment dates for a polysilicon supply deal it holds with Solarfun Power Holdings Co. Ltd (SOLF).

Shares of Hawaii-based Hoku jumped 42 cents, or 18 percent, to $2.77 in midday trading. Solarfun shares fell 15 cents to $7.32 per share.

In May 2008, Hoku’s subsidiary Hoku Materials Inc. agreed to supply polysilicon to Solarfun unit Solarfun Power Hong Kong Ltd. over a ten-year period. Polysilicon is a key material used in making solar energy products.

Hoku plans to supply the product once construction is completed at its Idaho polysilicon manufacturing plant. In September, Hoku said construction was scheduled to be completed two phases. A 2,500 metric tons of polysilicon production capacity should be completed by March 2010 and the full 4,000 metric tons of capacity should be completed by the end of 2010.

Under the agreement, Solarfun had paid $37 million as a prepayment for future polysilicon deliveries. As of last week Solarfun still held a $13 million past-due balance that was due between July and October. Hoku said last Friday Solarfun paid $8 million of its past-due balance and agreed to pay $4 million in March 2010 and $1 million when Hoku begins its shipment of polysilicon to the China-based solar cell maker.

Solarfun agreed to pay a remaining $5 million balance due January 2010 in $1 million monthly increments in each of the five subsequent months after the month of the first shipment.

December 7, 2009

Solar ETFs Rally As Climate Talks Start

Filed under: FSLR, JASO, KWT, SPWR, STP, TAN, TSL — Tags: , , , , , , — Jason @ 6:48 pm

By Trang Ho
6:48 pm EST, Monday December 7, 2009

Solar energy stocks led the market higher Monday on several analyst upgrades. In addition, the U.N. Climate Change Conference in Copenhagen, kicked off and the Environmental Protection Agency reported greenhouse gases are endangering people’s health and must be regulated.

Claymore/MAC Global Solar Energy (TAN) rose 3% to 10.07 in a little less than average volume. Shares broke above their 50-day moving average last week in scant volume.

The ETF has traded in a price channel between 8 and 11 for the past seven months. It has returned 27% year to date vs. 22% for the S&P 500. It carries Relative Strength and Accumulation/Distribution Ratings of 54 and B-.

Market Vectors Solar Energy (KWT) surged 4.7% to 15.31 in higher than usual volume. Shares have traded in a sideways band between about 12 and 16 for the past six months.

KWT has gained 18% this year. Its 44 RS and B- Acc/Dis Ratings are technically weaker than TAN’s.

“If both TAN and KWT break out above the channels they are trading in, then expect them to move to the price level of the recent high,” said Tom Bulkowski, a technical analyst and founder of “That means TAN could run to 11.50 and KWT to 18.”

Industry Developments

Barclays Capital upgraded JA Solar Holdings (JASO), SunPower (SPWRA, SPWRB) and Suntech Power Holdings (STP) Monday to overweight from equal weight. The three companies popped 10% to 12% on the news.

Suntech Power said last week it won a 17-megawatt supply contract for 2010 from a Canadian firm. Its shares have spiked 68% year to date.

A top holding in both ETFs, First Solar (FSLR), added to last week’s gains and closed at 135.05 in average volume. The stock has been trending lower, forming lower lows and lower highs, since May. It trades below both its 200- and 50-day moving averages. It is flat for the year.

Shares rallied Thursday. They continued higher Friday after Collins Stewart upgraded the stock to buy from hold. Pricing pressures in the solar market eased in recent months and demand is beginning to pick up, analyst Dan Ries wrote in a client note. First Solar fared better than its competitors during the recession because its cadmium-telluride panels are cheaper to make than the silicon-based ones that dominate the market.


December 4, 2009

LDK Solar and Q-Cells Announce Continuation of Supply Contract

Filed under: LDK — Tags: , , , , — Jason @ 11:10 am

11:10 am EST, Friday December 4, 2009

XINYU CITY, China and SUNNYVALE, Calif. and BITTERFELD-WOLFEN, Germany, Dec. 4 /PRNewswire-FirstCall/ — LDK Solar Co., Ltd. (LDK) and Q-Cells SE jointly announce that the two companies have reached an agreement to continue their supply contract for solar wafers from 2009 to 2018. During recent amicable negotiations, the two companies resolved all differences of opinion over the interpretation of the agreement and neither side will pursue legal action. Q-Cells also agreed to no longer pursue measures to collect the bank guarantee. Joint business activities between the two companies remain unchanged.

LDK Solar and Q-Cells have agreed to increase the flexibility of the delivery schedule. Flexible pricing based on market levels and Q-Cells’ preferred customer status will apply for the entire remainder of the contract term. A portion of shipments scheduled in the years 2009 to 2011 have been postponed to the period 2012 to 2018. Q-Cells will receive around 20% in the current year and at least one third of the originally agreed volumes in 2010 and 2011. Q-Cells also has the option to increase these volumes if needed. The total delivery volume for the entire ten-year term of the contract remains unchanged at approximately 6 Giga Watts. In addition to the amendment, the parties have finalized an agreement to expand their cooperation in the areas of cell and module processing. Q-Cells will supply solar cells to LDK Solar on a tolling basis and LDK Solar will supply modules to Q-Cells on the same basis.

About Q-Cells SE

Established in 1999, Q-Cells is one of the biggest photovoltaics companies in the world. In 2008, the company manufactured solar cells and thin-film modules with a total output of 574 Megawatt peak (MWp). At Q-Cells, more than 250 scientists and engineers are working on enhancing the technology in order to achieve the company’s aim: reducing the costs of photovoltaics quickly and permanently, and making the technology affordable and competitive. In addition to the activities in the core business, several subsidiaries of Q-Cells SE have been producing photovoltaic modules based on various thin-film technologies since mid-2008. With Q-Cells International GmbH, the company also plans and develops large photovoltaic systems. The company currently has around 2,600 employees. Q-Cells SE is currently commissioning a production facility in Malaysia, has branches in Hong Kong, China and Japan and is listed on the Frankfurt stock exchange (QCE; ISIN DE0005558662) and in the German technology index TecDAX.

November 25, 2009

Hoku Announces Amendment to Contract With Jinko

Filed under: HOKU — Tags: , , , , — Jason @ 4:15 pm

4:15 pm EST, Wednesday November 25, 2009

HONOLULU, HI and JIANGXI, CHINA–(Marketwire – 11/25/09) – Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (HOKU) established to manufacture and sell polysilicon for the solar market, and Jinko Solar Co., Ltd. (Jinko), formerly named Jiangxi Jinko Solar Co., Ltd., a vertically-integrated manufacturer of silicon ingots, silicon wafers, solar cells and solar modules in China, today announced the amendment of the polysilicon supply agreement in effect between the two companies.

According to the terms of the amendment, both companies have agreed to reduce the term of the sales agreement by one year, and to delay the first shipment date from December 2009 to December 2010. This will result in a ten percent reduction of the total volume of polysilicon to be sold by Hoku to Jinko. The pricing and other commercial terms of shipment for the remaining nine years remain unchanged.

“This amendment provides clear benefits to both parties by adjusting our agreement to account for the financing-related delays experienced by Hoku during the past year and the realities of the polysilicon market today,” said Dustin Shindo, chairman and chief executive officer of Hoku Scientific. “Jinko maintains its long-term pricing hedge and supply stability, and Hoku will enjoy some additional flexibility during our first year of production, the year in which our production cost per kilogram of polysilicon is expected to be the highest. We look forward to beginning our regular deliveries of polysilicon to Jinko in 2010.”

“This amendment shows Hoku’s continued commitment to its partnership with Jinko,” said Xiande Li, Chairman of Jinko Solar. “We look forward to receiving polysilicon from Hoku’s Pocatello plant in 2010.”

Hoku reported that Tianwei New Energy Holdings, Hoku’s prospective majority investor, had consented to the amendment.

About Jinko Solar Co., Ltd.

Jinko Solar Co., Ltd. is a large vertically-integrated solar product manufacturer based in China. Specializing in the production of silicon ingots, silicon wafers, solar cells and solar modules, Jinko’s silicon industry assets currently include monocrystalline furnaces, multicrystalline furnaces, wire saws, wire squarers, solar cell and solar module production lines, and related production facilities, among others. Jinko is an overseas funded, high technology enterprise wholly owned by JinkoSolar Holding Co., Ltd., a company incorporated in the Cayman Islands.

For more information, visit

November 24, 2009

Yingli Slips As Broadpoint Downgrades

Filed under: YGE — Tags: , , , , , — Jason @ 10:58 am

By Eric Savitz

Yingli Green Energy (YGE) Shares are trading lower this morning after Broadpoint.Amtech analyst John Hardy cut his rating on the stock to Neutral from Buy.

Hardy says a beat-and-raise solar earnings season is now finished; with “big guidance for Q1,” he writes, the risk is now that the 2010 first half will disappoint.

In particular, he sees risks for Yingli as it gets ready to turn on significant polysilicon manufacturing capacity. “With commercial production expected to begin in Q4, we believe this will likely become an even bigger focus for investors,” he writes. Hardy notes that early cost targets are in line current spot poly pricing at $60/kg, creating risks to margins in the early stages of the project.

Hardy also says that the company’s balance sheet “remains an eyesore,” with $389 million in cash against $820 million in debt. But the stock nonetheless trades in line with other solar companies at about 17.5x 2010. He says paying more than 15x-16x is not warranted ahead of the poly ramp.

“Despite our view that the industry will enjoy a strong [2010 first half] and that YGE will benefit through volumes and firming ASPs, we do not see the risk/reward as favorable ahead of significant poly
manufacturing ramp coupled with current state of the balance sheet,” he writes.

YGE today is down 57 cents, or 4.1%, to $13.29.

November 23, 2009

China’s LDK posts surprise Q3 profit; shares up

Filed under: LDK, STP, TSL — Tags: , , , , , , , — Jason @ 12:50 pm

Mon Nov 23, 2009 12:50pm EST

* Q3 profit $0.27/ADS vs. est. loss of $0.10/ADS

* Sees sequentially higher shipments in Q4

* Sees Q4 sales above estimates

* Shares up 8.4 pct at $8.67 each

LOS ANGELES, Nov 23 (Reuters) – Chinese solar wafer maker LDK Solar Co Ltd (LDK) reported a surprise third- quarter profit on Monday and forecast better-than-expected fourth quarter sales and sequentially higher shipments, sending its shares up 8 percent in regular trading.

For the fourth quarter, LDK forecast sales between $280 million and $310 million, well above analysts’ estimates of $258.7 million, according to Thomson Reuters I/B/E/S.

The company also expects higher wafer shipments of between 320 megawatts to 340 MW, compared with the 320.5 MW it shipped in the third quarter.

The company’s surprise profit was due to stronger gross margins and better material costs, as well as nearly $14 million in government subsidies, Needham and Co analyst Edwin Mok said.

“I am incrementally more positive about the company,” Mok added.

But he noted the balance sheet was “still an investor concern.”

LDK ended the third quarter with $1.1 billion in current assets, including $67.8 million in cash and cash equivalents, and $2.45 billion in current liabilities.

“The results are not as good as they appear at first blush,” Soleil Securities analyst Paul Leming said, adding that government grants and subsidies and other items helped the company’s earnings.

“Their level of debt is extremely worrisome. The fact that they still do not have their polysilicon plant up and running is bothersome.”

The solar wafer maker is working to produce its own polysilicon — a key raw material in the solar industry — in order to reduce costs.


LDK Solar Reports Financial Results for Third Quarter 2009

Filed under: LDK — Tags: , , , , , , , — Jason @ 7:00 am

7:00 am EST, Monday November 23, 2009

XINYU CITY, China and SUNNYVALE, Calif., Nov. 23 /PRNewswire-FirstCall/ — LDK Solar Co., Ltd. (“LDK Solar”; LDK), a leading manufacturer of multicrystalline solar wafers, today reported its unaudited financial results for the third quarter ended September 30, 2009.

All financial results are reported in U.S. dollars on a U.S. GAAP basis.

Recent Highlights:

* Third quarter 2009 revenue was $281.9 million;
* Shipped 320.5 MW of wafers, up 26.8% year-over-year;
* Gross margin for the third quarter of fiscal 2009 was 20.1%;
* Net income was $29.4 million, or $0.27 per diluted ADS;
* Increased wafer capacity to 1.7 GW and started pilot production at first 5,000 metric ton (MT) train in 15,000 MT polysilicon plant; and
* Sold a 15% ownership stake in 15,000 MT annualized capacity polysilicon plant to Jiangxi International Trust and Investment Co., Ltd. for RMB1.5 billion (equivalent to approximately US$219 million)

Net sales for the third quarter of fiscal 2009 were $281.9 million, compared to $228.3 million for the second quarter of fiscal 2009, and $541.8 million for the third quarter of fiscal 2008.

For the third quarter of fiscal 2009, gross profit was $56.8 million, compared to negative $205.5 million in the second quarter of fiscal 2009, and $122.9 million for the third quarter of fiscal 2008.

Gross margin for the third quarter of fiscal 2009 was 20.1%, compared to negative 90.0% in the second quarter of fiscal 2009 and 22.7% in the third quarter of fiscal 2008.

Income from operations for the third quarter of fiscal 2009 was $37.1 million, compared to a loss of $235.0 million for the second quarter of 2009, and compared to income from operations of $107.8 million for the third quarter of fiscal 2008.

Operating margin for the third quarter of fiscal 2009 was 13.2% compared to negative 102.9% in the second quarter of fiscal 2009 and 19.9% in the third quarter of fiscal 2008.

Income tax expense for the third quarter of fiscal 2009 was $6.6 million, compared to income tax benefit of $29.5 million in the second quarter of fiscal 2009.

Net income for the third quarter of fiscal 2009 was $29.4 million, or $0.27 per diluted ADS, compared to a net loss of $216.9 million, or $2.03 per diluted ADS for the second quarter of fiscal 2009.

LDK Solar ended the third quarter of 2009 with $67.8 million in cash and cash equivalents and $72.7 million in short-term pledged bank deposits.

“We were pleased to see wafer demand strengthen across multiple geographies during the quarter, rebounding from the lower levels seen earlier this year. Our financial results for the third quarter reflect the recent improvement in the operating environment for the solar industry,” stated Xiaofeng Peng, Chairman and CEO of LDK Solar. “During the third quarter, we continued to take steps to further strengthen our business. In addition to reaching important milestones for ramping our polysilicon production, we made great strides to further diversify and grow our business and improve our operating flexibility by increasing our near-term financial resources, while we continued to closely manage costs.


November 20, 2009

LDK Solar Completes Sale of 15% Ownership Stake in its 15,000 MT Polysilicon Plant

Filed under: LDK — Tags: , , , , — Jason @ 3:15 am

3:15 am EST, Friday November 20, 2009

XINYU CITY, China and SUNNYVALE, Calif., Nov. 20 /PRNewswire-FirstCall/ — LDK Solar Co., Ltd. (LDK), a leading manufacturer of multicrystalline solar wafers, today announced that it completed the sale of a 15% ownership stake in its 15,000 metric ton (MT) annualized capacity polysilicon plant to Jiangxi International Trust and Investment Co., Ltd. for RMB1.5 billion. The proceeds from the sale have been received by LDK Solar.

November 19, 2009

Trina Solar Announces Third Quarter 2009 Results

Filed under: TSL — Tags: , , , , , , , — Jason @ 4:45 am

Shipment Volume, Gross Margin Exceed Company Guidance

4:45 am EST, Thursday November 19, 2009

CHANGZHOU, China, Nov. 19 /PRNewswire-Asia-FirstCall/ — Trina Solar Limited (TSL; “Trina Solar” or the “Company”), a leading integrated manufacturer of solar photovoltaic (PV) products from the production of ingots, wafers and cells to the assembly of PV modules, today announced its financial results for the third quarter ended September 30, 2009.

Third Quarter 2009 Financial and Operating Highlights
— Solar module shipments were approximately 123 MW, above the Company’s previous guidance of 90 MW to 110 MW, representing an increase of 91.9% sequentially and 84.7% year-over-year
— Net revenues were $249.7 million, representing an increase of 66.5% sequentially and a decrease of 14.1% year-over-year
— Gross margin was 28.5%, above the Company’s guidance of 23.5% to 26.5%, compared to 27.4% sequentially and 22.4% year-over-year
— Operating income and operating margin were $45.5 million and 18.2%, respectively, compared to $18.6 million and 12.4%, respectively, in the second quarter of 2009
— Net income was $40.1 million, compared to $18.9 million in the second quarter of 2009
— Earnings per fully-diluted ADS was $1.29

“We are very pleased with our strong third quarter performance, which saw the highest shipment volumes and net income in our operating history and exceeded our previous guidance in shipment and gross margin,” said Jifan Gao, Chairman and CEO of Trina Solar. “We are seeing even stronger demand in the fourth quarter, reflecting increasing brand recognition for our products and a further improvement in financing conditions. Additionally, our focused strategy to deliver the highest product quality and performance to a diversified portfolio of end-markets has afforded us with increasing visibility into 2010’s first quarter despite seasonal market effects.

“With our third quarter results, successful follow-on public offering and five-year syndicated credit facility for our East Campus capacity expansion project, we have further strengthened our balance sheet as we continue to improve our market leading manufacturing efficiencies.”


November 18, 2009

Solarfun Reports Third Quarter 2009 Results

Filed under: SOLF — Tags: , , , , , , , — Jason @ 6:57 am

6:57 am EST, Wednesday November 18, 2009

SHANGHAI, Nov. 18 /PRNewswire-FirstCall/ — Solarfun Power Holdings Co., Ltd. ( “Solarfun” or the “Company”) (SOLF), a vertically integrated manufacturer of silicon ingots, wafers and photovoltaic (PV) cells and modules in China, today reported its unaudited financial results for the quarter ended September 30, 2009.


* Total net revenues were RMB 986.8 million (US$144.6 million) in the third quarter of 2009, representing a decrease of 22.6% from RMB 1,274.8 million in the third quarter of 2008 and an increase of 15.5% from RMB 854.6 million in the second quarter of 2009. The sequential increase was primarily related to higher shipment volumes reflecting improved industry demand.
* PV module shipments reached 102.6 MW in the third quarter of 2009, an increase from 41.8 MW in the third quarter of 2008 and from 64.3 MW in the second quarter of 2009. The increase from the second quarter of 2009 was due to increases in both PV module shipments and PV module processing services. PV module processing services represented approximately 40% of the total PV module shipments in the third quarter of 2009. In the third quarter of 2009, excluding module processing, the Company recorded greater geographic diversity in its sales, with Germany accounting for 60% of the Company’s total PV module shipments, down from 83% in the previous quarter. The Czech Republic, a relatively new market for the Company, continued to grow to 9% of total shipments, and a rebound was seen in Portugal and Spain, representing 11% and 6% of total shipments, respectively. Australia, Italy and Korea combined for another 14% of total shipments.
* Average selling price, excluding module processing services, declined, as expected, to US$2.03 per watt in the third quarter of 2009 from US$2.66 per watt in the second quarter of 2009, primarily due to the decrease in the market prices of PV products.
* Gross profit was RMB 204.4 million (US$29.9 million) in the third quarter of 2009, compared to a gross profit of RMB 46.1 million in the third quarter of 2008 and a gross loss of RMB 53.0 million in the second quarter of 2009. Gross margin was 20.7% in the third quarter of 2009, compared to negative 6.2% in the second quarter 2009. No provision for pre-payments on supply agreements were made in the third quarter of 2009, compared to a provision of RMB 236.5 million in the second quarter of 2009. Gross margin in the third quarter of 2009 reflected lower raw material costs primarily as a result of renegotiated supply agreements and increased spot market purchases. Vertical integration to the ingot and wafer level also led to reduced costs from higher utilization and continued process improvements.
* Operating profit was RMB 129.4 million (US$19.0 million) in the third quarter of 2009, compared to an operating loss of RMB 25.9 million in the third quarter of 2008 and an operating loss of RMB 121.9 million in the second quarter of 2009. The operating margin for the third quarter 2009 was 13.1%. The Company continued to maintain tight discipline on operating expenses, which as a percent of revenues should trend lower as revenues grow.
* Interest expense was RMB 40.8 million (US$6.0 million) in the third quarter of 2009, an increase from RMB 21.6 million in the third quarter of 2008, and an increase from RMB 36.1 million in the second quarter of 2009.
* Fair value of the conversion feature of the Company’s convertible bonds increased by RMB 82.4 million (US$12.1 million) in the third quarter of 2009, due to a number of factors including changes in the Company’s ADS prices during the third quarter of 2009. This line item has fluctuated, and is expected to continue to fluctuate quarter-to-quarter in line with standardized accounting practices, of which the Company has no control.
* Net income attributable to shareholders was RMB 136.6 million (US$ 20.0 million) in the third quarter of 2009, compared to a net loss of RMB 44.3 million in the third quarter of 2008 and a net loss of 319.9 million in the second quarter of 2009. Net income per basic ADS was RMB 2.53 (US$0.37) in the third quarter of 2009, compared to a net loss per basic ADS of RMB 0.86 in the third quarter of 2008 and a net loss per basic ADS of RMB 5.95 in the second quarter of 2009.

Peter Xie, President of Solarfun, commented, “We are extremely pleased with the continued progress achieved in the third quarter of 2009. Of particular note were quarterly shipment volumes exceeding 100 MW for the first time in the Company’s history, gross margins reaching 20%, and a return to profitability. We also improved our capital structure by reducing short-term bank borrowings and raising additional equity capital.”


November 17, 2009

LDK Solar sells 15 pct stake in plant for $219 mln

Filed under: LDK — Tags: , , , , , , — Jason @ 5:58 pm

Tue Nov 17, 2009 5:58pm EST

* To sell stake to Jiangxi International Trust

* To use proceeds to strengthen financial position

* Shares up 13 pct in after-hours trade

LOS ANGELES, Nov 17 (Reuters) – Chinese solar wafer maker LDK Solar Co Ltd (LDK) said on Tuesday it agreed to sell a 15 percent stake in its Chinese polysilicon plant to Jiangxi International Trust and Investment Co Ltd for about $219 million, lifting its shares as much as 14 percent after hours.

LDK makes silicon wafers for the solar power industry and is working to ramp up a plant for polysilicon, a prime commodity in the solar industry, as part of its strategy to reduce costs.

Prices for polysilicon and for solar panels have tumbled in the last year.

Needham and Co analyst Edwin Mok said the deal helps LDK “in terms of alleviating their liquidity concerns given that the company’s cash flow is pretty tight on that end.”

Mok said that he does not expect the deal to impact the plant’s operations, but it could signal that the company may sell more stakes in the facility.

Xiaofeng Peng, the company’s chief executive and chairman, said in a statement that the sale would “significantly strengthen our financial position and increase our near-term operating flexibility.”

The news follows the sudden departure in October of the company’s head of manufacturing, who was in charge of ramping up the plant in China.

LDK is also facing a contract dispute with Germany’s Q-Cells, among the world’s largest makers of solar cells, that could prompt other customers to renegotiate their contracts.

Shares of LDK Solar were up 13 percent at $7.59 in trading after the bell. They closed at $6.71 on Tuesday on the New York Stock Exchange.

(Reporting by Laura Isensee in Los Angeles and Arundhati Ramanathan in Bangalore; Editing by Deepak Kannan, Leslie Gevirtz)

LDK Solar Sells 15% Ownership Stake in Its 15,000 MT Polysilicon Plant

Filed under: LDK — Tags: , , , , — Jason @ 4:30 pm

4:30 pm EST, Tuesday November 17, 2009

XINYU CITY, China and SUNNYVALE, Calif., Nov. 17 /PRNewswire-FirstCall/ — LDK Solar Co., Ltd. (LDK), a leading manufacturer of multicrystalline solar wafers, today announced that it has entered into an agreement to sell a 15% ownership stake in its 15,000 metric ton (MT) annualized capacity polysilicon plant in Xinyu City, China. Jiangxi International Trust and Investment Co., Ltd. has agreed to purchase this interest for approximately RMB1.5 billion (equivalent to approximately US$219 million).

“We are very pleased with the continued support of our business from local financial institutions, as evidenced by this recent development,” stated Xiaofeng Peng, Chairman and CEO of LDK Solar. “Jiangxi International Trust and Investment Co.’s investment in our 15,000 MT polysilicon plant will significantly strengthen our financial position and increase our near-term operating flexibility. We are pleased with the ongoing progress in ramping our 15,000 MT plant and look forward to providing a comprehensive update during our upcoming earnings call.”

About Jiangxi International Trust and Investment Co., Ltd

Jiangxi International Trust and Investment Co., Ltd. is engaged in economic development in Jiangxi Province through the operation of financial trusts, management of enterprise assets restructuring, mergers and acquisitions, project finance, corporate finance, and other intermediary business, on behalf of the custody business, by bank deposit, interbank offered loans, or investment using its own funds, managing the financial lending and other business approved by the People’s Bank.

November 16, 2009

Suntech hopes Arizona plant to ease US job worries

Filed under: STP, YGE — Tags: , , , , , , , — Jason @ 3:03 pm

Mon Nov 16, 2009 3:03pm EST

* Plant to start at 30 MW in third quarter of 2010

* Co expects to keep same margins for U.S.-made panels

* Co hopes new plant will ease worries on green jobs

By Laura Isensee

LOS ANGELES, Nov 16 (Reuters) – Suntech Power Holdings Co Ltd (STP), China’s largest solar panel maker, hopes its first U.S. manufacturing plant in Arizona will ease worries that China may be taking green jobs from the United States, an executive said on Monday.

Suntech said on Sunday that it picked Arizona as the site for its U.S. panel assembly facility, which will use solar cells shipped from China.

Shares of Suntech, which is set to report quarterly results on Thursday, were up nearly 13 percent at $15.47 in trading on Monday on the New York Stock Exchange.

“This is truly an international marketplace, especially when you’re talking about solar. It always has been. It makes a very positive statement — here’s a Chinese solar company that’s literally exporting jobs from China to the U.S.,” said Roger Efird, managing director of Suntech.

“We’re hoping that this kind of action helps to alleviate the worries that some people have about alternative energy jobs moving overseas,” Efird said.

Suntech plans to open its new plant in the third quarter of 2010 with an initial capacity of 30 megawatts and a staff of 75 people. The plant is part of its long-term strategy for the United States, which the company expects to be its biggest market in three years.

Piper Jaffray analyst Jesse Pichel said that Suntech’s plans for U.S. manufacturing are primarily political for now but could pay off economically in the future.

“If you want to be a global player, you have to have global production to meet local market demand,” Pichel said.

“In the future if the U.S. can be the size of the German market, then putting (manufacturing) in the States will have some economic benefit. But clearly right now, it’s a political move. Everyone wants jobs,” Pichel said.

He noted that federal buildings may require U.S.-made solar panels. “Given that Suntech uses a lot of silicon made in Texas and with module assembly in Arizona, they would be as ‘Made in the USA’ as anybody,” Pichel said.


Cheap Solar: Plunging Silicon Gives Asian Solar Companies an Edge, HSBC Says

Filed under: LDK, STP, TSL, YGE — Tags: , , , , , — Jason @ 10:37 am

By Keith Johnson

Solar prices have already collapsed, but they still have plenty of room to keep falling. That’s actually good news for the industry—and for Asian solar-power companies in particular, HSBC says in a new report.

Thanks to the glut of polysilicon, prices for solar-power modules have collapsed, falling 50% over the last year, the bank says. Since there’s still a supply glut, prices will keep falling—another 20% by the end of 2010.

The bad news, such as it is, is that falling prices squeeze margins at lots of solar companies, slamming share prices and forcing layoffs.

The good news is that as solar power gets cheaper, demand should pick up after a terrible year. HSBC figures that cheaper silicon makes solar power only two to two-and-a-half times more expensive than traditional power sources, compared with five to six times more expensive just a year ago.

That should spur rapid growth, consolidation, and scale economies—all of which could push the cost of solar power even lower. HSBC renewed its forecast of solar grid parity in some big markets by 2013.

The other big effect of cheaper silicon prices is that it makes the cost of silicon less important and other costs more so—giving an advantage to Asian solar-power players who enjoy advantages in things like labor and manufacturing costs.

HSBC says: “We estimate silicon will account for one-third of module costs by 2011, down from more than two- thirds in 2008. As a result, we believe leaders in downstream non-silicon costs will enjoy higher market share, better margins or both.”

For the investment bank, that means that companies such as Trina Solar (TSL) and Suntech Power (STP) are becoming more attractive. The bank initiated coverage on Trina at “overweight” and upgraded Suntech to “neutral” from “underweight.”

Less attractive? Yingli Green Energy (YGE) and LDK Solar (LDK), both burdened by in-house silicon production. HSBC downgraed Yingli to “underweight” from “overweight” and reiterated LDK’s “underweight” rating.

ReneSola Ltd Announces Third Quarter 2009 Results

Filed under: SOL — Tags: , , , , , , , — Jason @ 7:13 am

Company Achieves Record Quarterly Product Shipment Volume; Net Revenues Exceed Guidance

7:13 am EST, Monday November 16, 2009

JIASHAN, China, Nov. 16 /PRNewswire-Asia-FirstCall/ — ReneSola Ltd (“ReneSola” or the “Company”) (SOL), a vertically integrated Chinese manufacturer of solar power products, today announced its unaudited financial results for the third quarter ended September 30, 2009.

Third Quarter 2009 Financial and Operating Highlights
— Q3 2009 net revenues exceeded guidance and were US$140.9 million, an increase of 70.6% from US$82.6 million in Q2 2009.
— Total solar product shipments in Q3 2009 were a record 146.9 megawatts (“MW”), an increase of 71.0% from 85.9 MW in Q2 2009.
— The Company successfully completed the integration of Wuxi Jiacheng Solar Energy Technology Co. (“JC Solar”) following its acquisition on May 31, 2009. Approximately 11 MW of modules were shipped in Q3 2009 with a gross profit margin of over 20%.

                                Three months     Three months    Three months
                                    ended            ended          ended
                                September 30,      June 30,      September 30,
                                     2008             2009           2009
                                 (Unaudited)      (Unaudited)     (Unaudited)

    Product shipment (MW)              90.4             85.9           146.9
    Net revenue (US$000)            215,754           82,629         140,945
    Gross profit (US$000)            45,809            4,251           4,738
    Gross margin (%)                  21.2%             5.1%            3.4%
    Operating profit (loss)
     (US$000)                        36,888           (3,962)         (7,774)
    Profit (loss) for the
     period (US$000)                 32,385           (3,589)        (10,171)


“We witnessed a strong rebound in customer demand for our quality products in the third quarter of 2009 and reached a corporate landmark as ReneSola achieved the highest quarterly shipments of solar products in its history,” said Mr. Xianshou Li, ReneSola’s chief executive officer. “The benefits of our strategic acquisition of JC Solar and evolution into an OEM based, vertically integrated solar manufacturer expedited with the recently announced acquisition of Dynamic Green Energy are allowing us to build upon our strong wafer manufacturing platform and deliver high quality, low cost products throughout the solar production value chain.”

Mr. Charles Bai, ReneSola’s chief financial officer, added, “We were pleased to see strong improvements in revenues and shipment volumes during the third quarter as we continue to witness strong customer demand and continue to gain market share globally. We are one quarter away from completely working through our high cost inventories. As such, we expect substantial margin improvements and a return to profitability in Q1 2010.”

Results for the Third Quarter of 2009


November 15, 2009

Suntech Selects Arizona for First U.S. Manufacturing Plant

Filed under: STP, WFR — Tags: , , , , , , — Jason @ 10:30 pm

Solar Leader Brings Green Manufacturing Jobs from China to the United States

10:30 pm EST, Sunday November 15, 2009

BEIJING, Nov. 15 /PRNewswire-Asia/ — From the U.S. China Green Tech Summit today, Suntech Power Holdings Co., Ltd. (STP), announced that its first U.S. manufacturing plant for the growing North American market would be located in the Greater Phoenix, Arizona area. The plant will have an initial production capacity of 30 megawatts (MW) and is expected to begin production in the third quarter of 2010.

The announcement makes Suntech the first Chinese cleantech leader to bring manufacturing jobs to America. Suntech selected the Greater Phoenix area for its plant because of Arizona’s leadership in research through Arizona State University, and statewide renewable energy policies, particularly its Renewable Energy Standard and distributed generation set-aside, as well as a supportive local business climate represented by the Greater Phoenix Economic Council. The Suntech U.S. plant will employ over 75 full-time employees at launch and may double its staff within the year as the North American market develops.

Initially starting with 30 MW of PV module production capacity, the Suntech plant is configured for growth to respond to the expected expansion of the U.S. solar market in the coming years. The U.S. market had 356MW of solar PV capacity installed during 2008 (source: Photon Magazine, Nov. 2009), and is expected to grow six-fold to more than 2GW by 2012 (source: Solarbuzz LLC, Mar. 2009).

“Bringing manufacturing jobs to the U.S. is part of Suntech’s vision to grow the solar market in every corner of the world,” said Suntech’s Chairman and CEO Dr. Zhengrong Shi. “We are eagerly watching growing markets and see the potential of bringing manufacturing capabilities to other markets where we see the combination of rapid local market growth and manufacturing cost competitiveness.”

Locating the plant close to Suntech’s U.S. customers will reduce the time, costs, and emissions associated with long-distance shipping of Suntech panels. The plant, which will be approximately 80,000 to 100,000 square feet, will allow for long-term growth of manufacturing capabilities to meet increasing American demand for solar power.

“Suntech has been a leader to watch for some time, and its decision to bring manufacturing here to the U.S. is a great sign of the increasingly important collaboration between Chinese and American leaders in the renewable energy industry, as well as the potential for growth of green jobs in countries that implement smart, supportive policies,” said Dan Kammen, Professor in the Energy and Resources Group and Director of the Renewable and Appropriate Energy Laboratory at the University of California, Berkeley.

Dr. Shi continued, “This is the first step in what I see as a long-term, strategic investment in the North American market. Over the last two years we have grown our U.S. team to over 60 employees. As a result of that effort, we have developed a network of over 200 solar dealers and integrators installing Suntech products and are actively involved with a number of large-scale solar project developers serving the utility market. We also have developed strong partnerships with U.S. companies such as MEMC (WFR) of Pasadena, Texas, our largest supplier of silicon wafers used in our modules. The leadership shown by the US government in advancing renewable energy will only improve the environment for further investments in the coming years.”

Suntech plans to make a final decision on the specific location of the plant in the coming weeks.

November 13, 2009

Yingli Green Energy Reports Third Quarter 2009 Results

Filed under: YGE — Tags: , , , , , , — Jason @ 4:07 am

Shipment Volume Reached Record High and Increased More Than 80% Quarter over Quarter
Income from Operations Increased 127% Quarter over Quarter
Non-GAAP EPS Increased to RMB 1.20 from RMB 0.91 Quarter over Quarter

4:07 am EST, Friday November 13, 2009

BAODING, China, Nov. 13 /PRNewswire-Asia-FirstCall/ — Yingli Green Energy Holding Company Limited (YGE; “Yingli Green Energy” or the “Company”), one of the world’s leading vertically integrated photovoltaic (“PV”) product manufacturers, today announced its unaudited consolidated financial results for the quarter ended September 30, 2009.

Third Quarter 2009 Consolidated Financial and Operating Highlights
— Total net revenues were RMB 2,225.2 million (US$326.0 million) and PV module shipment volume increased more than 80% quarter over quarter.
— Gross profit was RMB 447.6 million (US$65.6 million), with a gross margin of 20.1%.
— Operating income was RMB 242.8 million (US$35.6 million), with an operating margin of 10.9 %.
— Net income(1) was RMB 120.8 million (US$17.7 million) and diluted earnings per ordinary share and per American depositary share (“ADS”) was RMB 0.79 (US$0.12).
— On an adjusted Non-GAAP(2) basis, net income was RMB 184.2 million (US$27.0 million) and diluted earnings per ordinary share and per ADS was RMB 1.20 (US$0.18).

“I am pleased to announce strong results for the third quarter, with record highs in shipment volume and net revenues and healthy growth in net income,” said Mr. Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy. “The main driving force for these results was increased market demand for our ‘Yingli Solar’ brand products as the solar project financing environment continued to improve and as we began to see the benefits of our recently implemented competitive pricing strategy, which leverages our favorable cost structure. Additionally, our continuous focus on high quality products and customer service enabled us to continue to expand our market share and raise recognition of our products in both established and emerging solar markets during the quarter, which we expect will help drive growth in the quarters to come.”

“I am also very pleased to report that our gross margin continued to increase, reaching 20.1% in the third quarter from 18.3% in the second quarter of 2009 and 15.3% in the first quarter of 2009, underlining our ability to improve profitability by reducing both polysilicon and processing costs while achieving significant shipment volume growth,” Mr. Miao continued.


November 2, 2009

Q-Cells ends LDK supply agreement, claims guarantee

Filed under: FSLR, LDK, WFR — Tags: , , , , , — Jason @ 2:51 pm

Mon Nov 2, 2009 2:51pm EST

* Q-Cells to apply to draw on bank guarantee

* LDK disputes Q-Cells claims, says will defend itself

* LDK shares tumble 20 pct; Q-Cells down 2.5 pct

By Christoph Steitz and Laura Isensee

FRANKFURT/LOS ANGELES, Nov 2 (Reuters) – Germany’s Q-Cells ended an agreement with its Chinese solar wafer supplier, LDK Solar (LDK), a sign that the solar industry is continuing to struggle with an oversupply of materials.

Q-Cells, one of the world’s largest makers of solar cells, said on Monday that LDK did not fulfill “significant contractual obligations” in a 10-year agreement to supply wafers to Q-Cells. The companies entered the contract when wafer prices were much higher.

LDK, whose shares dropped 20 percent on Monday, said in a statement that it “vigorously disagrees” with Q-Cells’ claims and plans to defend itself against what it called a wrongful termination.

The move comes as manufacturers of solar cells and panels around the world are struggling with oversupply that has driven down prices and curbed demand.

Prices for polysilicon — a key raw material for the solar industry — and for solar panels have tumbled dramatically in the last year, forcing many players to renegotiate contracts.

“People are coping with oversupply and companies are learning that long-term contracts don’t mean much in a down cycle,” said Oppenheimer & Co analyst Sam Dubinsky.

Q-Cells said in a statement that “the contractual parties have differing opinions concerning the validity of the termination of the agreement” and its plans to reclaim a $244.5 million prepayment it made in 2008 related to the agreement.

“Discussions between the two companies and a parallel arbitration process at the International Chamber of Commerce (ICC) in Paris have not resulted in an amicable settlement yet,” the company added.


October 29, 2009

Solar power execs bullish on 2010 despite earnings

Filed under: FSLR, SPWR, STP — Tags: , , , , , , — Jason @ 7:36 pm

Thu Oct 29, 2009 7:36pm EDT

* Execs with Suntech, BP Solar, others see growth in 2010

* Driven by government aid, improved financial markets

* See fall in panel prices stabilizing

By Laura Isensee

ANAHEIM, California, Oct 29 (Reuters) – Executives from solar power companies see clearer skies in 2010 for the beleaguered industry, even as quarterly reports from heavyweights like First Solar Inc. (FSLR) and SunPower Corp (SPWRA, SPWRB) have disappointed investors and dragged down shares.

The industry has struggled to emerge this year from tight credit markets, a global glut of panels and falling prices.

“I think we’re already in the middle of a turnaround. We’ve kind of gone through the low point of the recent past,” said Steven Chan, Suntech Power Holdings Co Ltd’s (STP) chief strategy officer, in an interview with Reuters.

Executives from Sharp Corp, BP’s (BP) solar unit and other solar power players shared similar optimism about the sector’s outlook in 2010 at the Solar Power International conference being held in Anaheim, California, this week.

“Demand’s really good going into 2010. Visibility is a hell of a lot better than it was coming into 2009,” SunPower’s chief executive Tom Werner told reporters at the conference.

The industry, which grew at a clip of more than 40 percent for several years, has suffered in the recession, but solar companies kept a bullish attitude on growth next year.

Executives cited various forces that could drive growth in 2010, including U.S. stimulus funds for green projects, extended tax incentives and new financing.


October 27, 2009

GT Solar Commissions Solar Wafer Production Line in Spain

Filed under: SOLR — Tags: , , , , , , — Jason @ 8:30 am

Enables Cost-Effective Market Entry for DC Wafers

8:30 am EDT, Tuesday October 27, 2009

ANAHEIM, Calif.–(BUSINESS WIRE)–GT Solar International, Inc. (SOLR), a global provider of specialized production equipment, process technology and turnkey manufacturing services for the solar power industry, today announced that it has received final acceptance for the design, installation and commissioning of one of the most technologically-advanced turnkey wafer fabrication lines in Spain.

Created for Leon-based DC Wafers, the state-of-the-art wafer production line (GT-WAFFABTM) includes GT Solar’s GT-DSS450TM ingot growth technology, coupled with advanced wafering systems, and automated in-line inspection tools. GT Solar’s turnkey services process experts worked closely with DC Wafer’s engineers to optimize the wafer line to increase productivity, boost quality and line yields, and lower production costs. The line was designed to produce 30-megawatts (MW) of multi-crystalline solar wafers annually; it will likely exceed that target by up to an additional 5 MW, as the line is already operating at a better than expected polysilicon consumption rate.

“GT Solar’s proven technology and manufacturing know-how, in combination with the expertise of our manufacturing team, have enabled DC Wafers to build an extremely efficient, cost-effective facility that is allowing us to produce high-quality silicon wafers to meet our customers’ very specific needs,” said Ismael Guerrero Arias, DC Wafers’ director and chief technology officer. “Our company is conscious of the positive implications that generating clean energy has for the environment and our local community in terms of job growth, and we are committed to the development of the photovoltaic industry. To those ends, we will continue to focus our R&D strategies on reducing costs, saving energy and achieving maximum quality and efficiency.”

“The successful commissioning of DC Wafer’s new wafer line was accomplished through great teamwork between our teams,” said Ron Jones, vice president and general manager of GT Solar’s turnkey business. “We believe that DC Wafers is well situated in today’s market and we look forward to further strengthening our partnership with them to help optimize their competitive position as they expand their business.”

GT Solar provides turnkey solutions for every process of the PV manufacturing value chain including wafer, cell, and module lines. The company has successfully installed a variety of turnkey line configurations in countries around the globe including China, Greece, India, Italy, Spain, Taiwan, and the United Kingdom.

About DC Wafers Investments, S.L:

DC Wafers is the first Spanish owned company dedicated to the manufacturing of multicrystalline silicon wafers for the photovoltaic industry. The company methods are designed to satisfy the most demanding quality specifications of the PV industry. For additional information about DC Wafers, please visit

October 26, 2009

Solar: German Subsidy Update

Filed under: FSLR, SPWR — Tags: , , , , , , — Jason @ 1:52 pm

By Tiernan Ray

Analysts this morning are parsing the fine print of a four-year coalition agreement ratified in Germany today that will likely have an impact on funding for solar technology projects, and on solar technology vendors such as First Solar (FSLR) and SunPower (SPWRA, SPWRB).

As Bloomberg notes, German Chancellor Angela Merkel’s Christian Democratic Union pushed through measures for a $36 billion tax cut meant to spur economic growth, a compromise with more aggressive proposals. The measures relating to solar funding appear vague and thus open to widely differing interpretations.

The agreement does not call for immediate cuts in the so-called feed-in tariff for solar projects, subsidies that have helped boost German investment in the technology, writes Collins Stewart analyst Dan Ries. The agreement “highlights that the coalition is committed to solar and indicates that the government will pursue a dialog with the solar industry and community leaders to determine if the current subsidy is too generous.”

Ries is optimistic, writing that “we do not believe the outcome will be as harsh as the “enormous” one-time cut of perhaps 20-30% reported in the press.”

Hapoalim Securities analyst Gordon Johnson, on the other hand, believes cuts to subsidies won’t be “less severe,” as Ries and others believe. In fact, “we see this as confirmation that Merkel’s new coalition sees an immediate need to adjust current incentives for solar PV technologies,” he writes. “Furthermore, there was mention of focusing incremental ground based solar PV systems on “sealed” land – our discussions with contacts in Germany this morning suggest this could materially limit the sites new free-field solar projects in Germany can be placed.”

But as Johnson notes, it’s possible that a future limiting of subsidies will have a positive near-term impact on demand, causing projects to rush to use existing subsidies. But Johnson believes this will be small comfort given what he argues is an industry-wide glut of polysilicon (the raw material for many solar devices), solar wafers, and photovoltaic cells and modules, “we see acute risk of industry wide multiple compression on the horizon.”

The effects of the a potential tariff cut have already begun to be felt by some vendors. SunPower, for example, last Thursday offered a disappointing Q4 revenue outlook, which some analysts attributed to orders being pulled into last quarter from the current quarter, as projects scrambled to buy panels before tariffs run dry.

Sunpower shares today are down 90 cents, or 3%, at $27.45, while First Solar’s stock is up $2.51, or 1.7%, at $154.90.

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