All the noise about the bankruptcy of privately-held Solyndra, despite the reported $535 million federal loan guarantee, could lead some to think that the solar industry is in trouble. That would, of course, be spectacularly wrong.
While shares in the publicly-traded solar equipment makers have been falling since Aug. 31, the day the bankruptcy was announced, the future of solar power has never been brighter, according to many experts including NRG President and CEO David Crane. He told Jim Cramer on CNBC Sept. 20 that while price of solar panels has dropped “precipitiously…within three to four years, the cost of solar power in at least half of the states in the U.S. will be less than drawing power off the grid.” Crane also added that solar panels represent “a billboard for what you stand for as a business owner. NRG is working with the Washington Redskins to build a 2 megawatt solar installation and solar plug-in stations in the parking lot of their stadium.
As has been noted recently, the problems Solyndra experienced were unique to the company and solar panel equipment makers in general. Basically, its solar panels were too expensive and cost more to install than its competitors. Yahoo News reported that the price for solar panels has dropped by about 42 percent this year alone due to, you guessed it, competition from China.
The problem with picking solar stocks, particularly the solar panel and equipment makers, will be finding which of the group will survive and enjoy the promising future of solar power. Let’s take a look at the stocks of several solar equipment makers and see what they have done since Aug. 31, the day the long anticipated Solyndra bankruptcy became official. They have all fallen sharply, but have they been oversold? If so, which ones?
One of the larger solar companies Tempe, AZ-based First Solar (Nasdaq: FSLR, http://www.firstsolar.com/), the world’s largest maker of thin-film solar modules with a $6.5 billion market cap, hit a four-year low Sept. 22, dropping all the way down to $66.85, then “rallied” on Sept. 23 to $70.24. First Solar’s most immediate problem is apparently its own federal loan program, which is facing new scrutiny due to Solyndra’s problems. FSLR sold for more than $100 as recently as Aug. 31 but has been mostly falling since that day when it lost $1.95 and closed at $99.98.
China-based Suntech Power Holdings (NYSE: STP, http://www.suntech-power.com/), which makes photovoltaic products and provides construction services, was trading for $5.25 on Aug. 31. On Sept. 23 it closed at $2.64, down 7 cents for the day.
Ontario, Canada-based Canadian Solar (Nasdaq: CSIQ, http://www.canadian-solar.com/), which sells a variety of solar products, was trading for $6.74 on Aug. 31. It closed Sept. 23 at $4.72, up 31 cents on the day.
China-based LDK Solar Co. (NYSE: LDK, http://www.ldksolar.com/) manufactures solar products and silicon materials. On Aug. 31 it closed at $5.71 and by the close of market Sept. 23 it had dropped to $3.40, down 7 cents on the day.
China-based Trina Solar Ltd. (NYSE: TSL, http://www.trinasolar.com/) designs, manufactures and sells photovoltaic modules worldwide. Its closing price Aug. 31 was $15.88, while on Sept. 21 it closed at about half that price, or $7.69, up 25 cents.
Shanghai-based JA Solar Holdings Co. (Nasdaq: JASO, http://www.jasolar.com) makes solar cells and other solar products. It closed the trading day Aug. 31 at $3.66. On Sept. 21 it closed at $2.20, up 10 cents on the day.