Optimistic Reports, $280 Million Google Investment Can’t Boost Solar Stocks

The declining price of solar power should cause “global demand for it to take off,” according to a recent report conducted by GTM Research covered in the Financial Times (http://www.ft.com/intl/cms/s/0/a62f4558-91eb-11e0-b8c1-00144feab49a.html#axzz1OneOwg2w). The report predicts a speedy rise in global solar installations, from about 17,400 megawatts in 2010 to 20,900 MW this year and 35,500MW by 2015.

The increase in demand will be caused by what is called “grid parity,” considered the point when solar energy can compete effectively with other forms of energy. That point is close at hand in the U.S., according to the FT report.

But that doesn’t mean it’s time for solar manufacturers to celebrate, the story notes. The current problem in solar is that global manufacturing, particularly in China, has ramped up and created a glut of solar components, which in turn has caused prices to tumble and a squeeze on margins. According to analysts at Credit Suisse cited in the FT report, prices for solar panels have dropped about 17 percent in the past five months alone.  

The over supply and declining prices are reflected in the 10 percent fall in the prices of shares in large solar manufacturing companies like China-based Suntech Power Holdings (NYSE: STP),  Yingli Green Energy (NYSE:YGE) and Trina Solar (NYSE:TSL) and Tempe. AZ-based First Solar (Nasdaq: FSLR) so far this year.

Prices for inverters, which connect solar panels to the grid, have also declined so much that small cap companies like Boston-based Satcon Technology Corporation (Nasdaq:SATC, http://www.satcon.com/), with a $248 million market cap, and Camarillo, CA-based Power-One Inc. (Nasdaq:PWER, http://www.power-one.com/), with a market cap of $835 million, have issued first quarter results warnings, according to the FT.

So, while Google this week announced the creation of a $280 million solar fund (http://www.latimes.com/business/la-fi-google-solar-20110614,0,4289667.story), considered the biggest green investment Google has ever made, the world of solar companies, both large cap and small cap, remains an uneasy one. That is certainly reflected in recent trading in small cap stocks as well.

At mid-day June 15 China-based Renesola Ltd. (NYSE:SOL, http://www.renesola.com/) was trading at $5.42, down from $9.38 the last time we checked on March 29; Canada-based Canadian Solar (Nasdaq:CSIQ, http://www.canadian-solar.com) was trading at $9.82, down from $11.38 on March 29; China-based Hanwha SolarOne Co, formerly known as Solarfun Power Holdings, (Nasdaq: HSOL, http://www.hanwha-solarone.com/) was trading at $5.61, down from $7.54 on March 29; and China-based JinkoSolar Holding Co (NYSE:JKS, http://www.jinkosolar.com/) was trading at $24.88, down from $26.75 on March 29.


One thought on “Optimistic Reports, $280 Million Google Investment Can’t Boost Solar Stocks

  1. Pingback: Google & SolarCity Partner to Make Solar Affordable | Uses of Solar Power

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