Large Cap Siemens AG Leaves Solar Business to ‘Specialized Companies’

Citing “sinking prices and  cutbacks in government support for solar-thermal projects,” Siemens AG announced this week that it was exiting from the solar power business but would continue its alternative energy focus on wind and hydro power, according to several newspapers including the Wall Street Journal ( for subscribers). The much publicized austerity measures throughout Europe, the glut of solar panels that have devastated market prices for panels and cutbacks in solar-thermal projects all played a role in this decision, the WSJ reported. 

Photo courtesy of Siemens AG

It was just three years ago that Siemens paid $418 million for Israel-based Solel Solar Systems as well as a stake in Italy-based Archimede Solar Energy, according to the WSJ report. The solar announcement comes on the heels of Siemens previous decision to shelve its nuclear power ventures.

Michael Suss, a Siemen energy division head, suggested that “only specialized companies” will thrive in today’s solar market. Siemens was focused on solar-thermal technology, “which unlike solar panels, uses the sun’s rays to heat water in large-scale projects, turning it into steam” to generate electricity.” the WSJ report noted. Siemens is apparently in talks to sell off the solar division of its business.

It was only a month ago we took a look at a few small cap solar stocks (call them “specialized companies”), which back then were struggling with many of the same issues as giant Siemens (73.5 billion Euros in annual revenues during its last fiscal year) and trying to keep from being delisted by Nasdaq and the NYSE. So let’s see what’s happened since.

Tempe, AZ-based First Solar (Nasdaq: FSLR,, which specializes in thin-film solar modules, is not a small cap but we include it anyway. FSLR closed Sept. 25 at $20.51. FSLR closed Oct. 23 at $23.31, down 49 cents, with a market cap of $2 billion.

Ontario, Canada-based Canadian Solar (Nasdaq: CSIQ, ), which sells a variety of solar products, closed Sept. 25 at $3.01 with a market cap of $130 million. CSIQ closed Oct. 23 at $2.61, up 1 cent, with a market cap of $112.6 million.

San Jose, CA-based SunPower Corp. (Nasdaq: SPWR,, which makes a wide variety of solar products and systems, closed Sept. 25 at $4.60 with a market cap of $547 million. SPWR closed Oct. 23 at $4.34, down 4 cents, with a market cap of $516 million.

China-based LDK Solar Co. (NYSE: LDK, manufactures solar products and silicon materials. LDK closed Sept. 25 at $1.25 with a market cap of $167 million. LDK closed Oct. 23 at $0.88 with a market cap of $117 million.

China-based Trina Solar Ltd. (NYSE: TSL, designs, manufactures and sells photovoltaic modules worldwide. It has a chart similar to many of the other solar stocks, which reached highs in the summer of 2011. TSL closed Sept. 25 at $4.47 with a market cap of $316 million. TSL closed Oct. 23 at $4.42, up 12 cents, with a market cap of $312 million.

China-based Yingli Green Energy Holding Co. (NYSE: YGE,, which makes photovoltaic products including cells, modules and systems, closed Sept. 25 at $1.74 with a market cap of $272 million. YGE closed Oct. 23 at $1.72, up1 cent, with a market cap of $269 million.

China-based Suntech Power Holdings (NYSE: STP,, the world’s largest producer of solar panels, closed at $0.92 on Sept. 25. STP closed Oct. 23 at $0.85, up 3 cents, with a market cap of $154 million.


Q/A with Philip Lawes, Founder and President of Insoltech Solar

Philip Lawes, founder and president of Laguna Beach, CA-based Insoltech Solar, has been in the solar power business for 34 years. He is a designer and consultant for renewable power systems such as solar photovoltaic systems. Although based in Southern California, Lawes has installed renewable energy systems in various parts of the world including the Caribbean, Mexico and the South Pacific, as well as in the California desert areas.

Smallcapworld: How did you get into the solar business way back in the 1970s and what was your first solar job?

Solar farm photo courtesy KCOY.comChannel 12

Lawes: It was a solar hot water system. That’s all there was back then in the late 1970s that was financially viable. Solar power has been around for a long time. The photovoltaic cell was developed by Bell Labs and the first applications were for space and to power communications satellites. But it really kicked off during the second energy crisis in 1978. Saudi Arabia basically cut off all our oil and gas prices skyrocketed. Remember the long lines and high gas prices? There was an “energy crisis” and everyone started looking for alternative energy sources. President Carter helped boost the solar business by creating large financial incentives through generous tax breaks.

Q: Which companies were making the solar panels back then?

A: A lot of companies got into it, but they were mostly small companies, many based in Europe, making solar thermal collectors. It was mostly about heating water to reduce natural gas bills and in some cases electric bills, if you had electric heating.

Q: When did you get into photovoltaics?

That would be in the 1980s. I did a lot of work in Baja California, in and around Cabo San Lucas. I worked for expats in the area, for their small palapas and for pumping water on their ranches, for their cattle or other needs. The idea was to generate electricity in remote areas where utility power was not available and the cost to run diesel-powered generators was prohibitive.

Q: Tell us about some of your other projects.

A: I built a solar electric system for a small resort called Papageno in Fiji. Just a few years ago I also designed and built a solar electric system for Johnny Depp for his private island in the Bahamas. I was also a subcontractor for a 1.3 million watt system for the Twenty-Nine Palms Marine Corps base in the California desert. And I built a small solar energy water pumping system for the Irvine Company here in Southern California to provide water for an endangered species. We are working on a custom home in Shady Canyon now, an exclusive area of the Irvine Ranch.

Q: There are many different types of solar arrays now available. Which are best for the average homeowner?

A: The typicial, flat-plate, mono- or poly-crystalline solar modules are still the workhorses of the industry. They are scalable, maintenance free and offer excellent warantees and still the best route for average homeowners. Thin film modules are not as efficient so they require more area. And companies are still having problems getting the manufacturing process down. People got into thin film because they thought they could manufacture them cheaply but that hasn’t really happened yet. And no one anticipated that the standard modules would come down in price so much.

Q: Are there American companies that are able to compete with the Chinese in the manufacture of solar modules?

A: Oh sure. FirstSolar is a thin film manufactuer, the only really successful thin film manufacturer. SunPower is an American company and has a very efficient module built with great technology but they manufacture offshore, primarily in the Phillipines. Helios is based in Wisconsin and has been successful making solar modules. But there has been, and will continue to be, lots of attrition. Some companies are even selling their modules at a loss.

Q: Why do some companies like Helios succeed, while others like Evergreen Solar and Solyndra fail?

A: Solyndra stepped out of the box and tried a very different approach and ultimately had too many problems. Their idea was to build little glass cylinders with thin film cells inside. They were light weight and didn’t require ballasting, but I believe they had a lot of breakage and lots of other problems in production. Ultimately, they didn’t anticipate the dramatic decrease in price of today’s standard workhorse mono- and poly-crystalline modules. Evergreen had a different approach, called ribbon technology. My take is that they couldn’t approve on the efficiency of the modules enough, couldn’t get enough volume going and couldn’t compete with the big guys from China and Germany. Helios is successful so far, but who knows, we could read tomorrow that they are in trouble. But they do provide the old standard modules people want and a lot of people just want to buy American only, which helps them. I think SunPower makes the highest efficiency module of all.

Q: You say you helped do an installation at a Marine base. Why is the military getting into solar?

A: There have been mandates from the Department of Defense, one of the largest if not the largest user of electricity in the country, and they are looking for ways to do things cheaper.  In many cases these military installations are out in the middle of nowhere and it’s a cheaper alternative than using diesel generators. They also want to be autonomous, and have security. That’s why they are also looking at biofuels. They want to use stuff we grow ourselves instead of relying on outside sources. 

Q: How is solar power progressing in other countries, like the emerging parts of the world?

A: The emerging nations are finally beginning to grasp the value of renewable energy. Cuba has lots of solar, so do the Virgin Islands, and Hawaii as well because they have to import their fuel. Many parts of the world don’t have coal, natural gas or hyro power. It’s all about diesel-fired generators. It’s all about what they call grid parity. That’s the holy grail. If you can product power at a lesser cost than what they charge. Grid parity is now in places like the Bahamas, but it all depends on the particular area.

Q: How long does it take the average residential installation to pay for itself in terms of decreased or eliminating energy bills?

That really depends on your location. There are so many variables like which utility is in the area and what the rates are and what rebate programs they offer. In Southern California, with large homes and large usage like the tier 4 and tier 5 users, it’s about 5-7 years. But in places like Hawaii that doesn’t have coal-powered plants or hydro and electricity is very expensive, but there’s plenty of sun, the payback can be quicker.

Q: What are the chief maintenance problems with a home system? Do you need to have special insurance to cover the installation on the roof?

My main expertise here is California, which doesn’t have extra insurance, in fact they make it mandatory to not charge extra insurance. But as California goes, so goes the rest of the country, typically. The chief maintenance problem is keeping the modules clean. Again, that depends on where you live. Actually, it’s easier on the East Coast where they get more rain. In California, where it can go months without rain, it can be difficult to keep them clean, particularly if you live near a construction area that is generating lots of dust. It’s good to wash them every few months. Have a window washer do it if you can.

Solar Installations, Farms Catching On with Investors Big and Small

Don’t feel too badly if you are having trouble understanding the ups and downs of the solar industry. Take the Dec. 15 Business section of the Los Angeles Times, for instance. Right above to the headline “Grand Jury Investigating Solyndra,” and yet another story outlining the high-profile bankruptcy of the Fremont, CA solar panel maker despite $535 million in federal aid and $1.1 billion in venture capital backing, was another headline “Record Gains for Solar Industry” and a story noting that “solar power is a booming business in the U.S. ” along with statistics demonstrating the truly staggering growth of solar installations across the U.S. (,0,5390004.story).

But then you flip forward a few pages and there’s another report about solar panel maker First Solar, which fell 21.4 percent to $33.45 on Dec. 15, its lowest level in four years, after announcing its second restructuring in six weeks. First Solar, long considered a solar success story and the world’s largest solar company based on market cap (although its market cap has fallen almost 75 percent this year), released an earnings warning Dec. 14 suggesting that “downward pressure on solar panel prices and profit margins will continue ‘indefinitely,” according to the Financial Times.  The company’s basic problem is that there are too many solar panels on the market and countries in Europe, where solar is very popular, are cutting subsidies and will continue to do so.

“If you’re making solar modules, it’s very dicey out there. The prices keep going down, down, down,” said Philip Lawes, chief executive of Laguna Beach, CA-based Insoltech Solar.

But just go back a few weeks and you can read the reports about Google investing millions in solar power, and then there was last week’s news about Warren Buffett getting into the solar business for the first time. MidAmerican Energy Holdings, a unit of Buffett’s Berkshire Hathaway Inc., purchased the Topaz solar farm in California’s San Luis Obispo County from First Solar. Terms were not disclosed but the Wall Street Journal suggested Topaz was worth “more than $2 billion. If you scan the news further, you’ll see that Buffett isn’t the only one jumping into the solar farm business. First Solar and SunPower Corp. have been unloading their solar farms to some of the U.S.’s biggest utilities, including NextEra Energy, NRG Energy and Exelon Corp.

Lawes said the big investors like Buffett see long term income in the large solar farms.

“These solar farms, they aren’t glamorous, they aren’t going to be a home run, but they create a steady cash flow over the long term,” said Lawes, adding that Buffett’s company will enjoy that steady cash flow by selling the energy produced in the farms to a utility. “The utility companies aren’t going anywhere.”

Google and KKR must agree, since they recently announced a joint investment in four solar farms south of Sacramento, CA. The deal allows the solar farm developer and operator, Recurrent Energy, to raise cash and fund future solar farms. Recurrent has a 20-year contract with Sacramento Municipal Utility District to supply electricity to power 13,000 homes, according to a story in the Wall Street Journal.

There’s also opportunities for small investors, Lawes added. Entrepreneurs are approaching owners of commercial buildings offering in some cases to pay 15 cents a square foot for the use of their roofs. The entrepreneurs then install solar and sell the power to utility, just like the big guys with the big farms. “Typically, they just need a flat roof,” he said.

So, other than the big guys like First Solar, how are the smaller solar companies faring? Not that well if you are in the solar panel business.

China-based Suntech Power Holdings (NYSE: STP,, a smallcap that has boosted its market cap up to $423 million market cap in recent weeks, makes photovoltaic products and provides construction services. This stock closed on Oct. 20 at $2.07. By mid-day Dec. 23 it was trading at $2.34.

Ontario, Canada-based Canadian Solar (Nasdaq: CSIQ,, which sells a variety of solar products, continues to decline. Back in late August it was trading for $6.74. At mid-day Dec. 23 it was trading for $2.85.

China-based LDK Solar Co. (NYSE: LDK, manufactures solar products and silicon materials. It, too, has bounced back from lows in late October of around $3. At mid-day Dec. 23 it was trading for $4.91, much closer to the highs of nearly $6 in late August.

China-based Trina Solar Ltd. (NYSE: TSL, designs, manufactures and sells photovoltaic modules worldwide. It’s now trading for less than half its Aug. 31 close of $15.88. By Oct. 20 it had declined to $7.15. It’s up from there, but not much. At mid-day Dec. 23 TSL stock was trading for $7.39.

Shanghai-based JA Solar Holdings Co. (Nasdaq: JASO, makes solar cells and other solar


products and has hit by the downturn. On Aug. 31 its stock closed at $3.66; by Oct. 20 it closed at $2.14; at mid-day Dec. 23 it was trading for $1.39.

Solar Stocks May Be Struggling but Industry Is Creating Jobs

The solar industry in the U.S. may be struggling in a market laden with cheaper Chinese imports but you can’t say it isn’t creating jobs. In a report out this week, the The Solar Foundation, a non-profit, “non-lobbying organization” dedicated to increasing the adoption of solar energy (, released its second annual review of the nation’s solar workforce, noting that hiring in the solar industry is increasing and and the industry now employs “more than 100,000 Americans.”  And employment in the industry is expected to grow by 24 percent in the next year, creating 24,000 jobs, according to the report, titled “National Solar Jobs Census 2011: A Review of the U.S. Solar Workforce.” 

The report also noted that the solar industry is increasing jobs nearly 10 times faster than the rest of the economy as a whole. The solar industry’s job growth rate as of August was 6.8 percent compared to the estimated overall economy rate of 0.7 percent. The report included more than 17,198 solar sites and 100,237 solar jobs in August nationwide.
The Los Angeles Times led its Business section Oct. 17 with the report because one in every four solar jobs is held by a Californian (,0,3230671.story). Of the 100,237 solar jobs nationwide, an estimated 25,575 were in California. The next state in the rankings was Colorado, well back of California  with 6,186 solar jobs, followed by Arizona with 4,786. Then came Pennsylvania (4,703), New York (4,279), Florida (4,224), Texas (3,346), Oregon (3,346), New Jersey (2,871) and Massachusetts (2,395).
The other big solar-related news of the week was a trade complaint filed by a group of seven American solar panel makers accusing China of “receiving unfair government subsidies and dumping its products in the United States at below cost,” according to a report in the New York Times (
None of this seemed to stop the slide in stock prices of solar panel manufacturers which has been going on for months. Among the larger caps, Tempe, AZ-based First Solar (Nasdaq: FSLR,, the world’s largest maker of thin-film solar modules, rallied on Oct. 20, up $1.46 to $53.77. But this is a stock that has been as high as $175 this year and was more than $100 as recently as Aug. 31.
Some of the smaller caps included:
China-based Suntech Power Holdings (NYSE: STP,, a smallcap with a $373 million market cap which makes photovoltaic products and provides construction services, closed on Oct. 20 at $2.07. This stock was trading for $5.25 on Aug. 31 and $2.64 on Sept. 23.

Ontario, Canada-based Canadian Solar (Nasdaq: CSIQ,, which sells a variety of solar products, closed Oct. 20 at $3.04, down 16 cents for the day. CSIQ was trading for $6.74 on Aug. 31 and $4.72 Sept. 23.

China-based LDK Solar Co. (NYSE: LDK,, which manufactures solar products and silicon materials, closed Oct. 20 at $3, down 13 cents for the day. This stock was trading at $5.71 on Aug. 31 and $3.40 Sept. 23.

China-based Trina Solar Ltd. (NYSE: TSL,, which designs, manufactures and sells photovoltaic modules worldwide, closed Oct. 20 at $7.15, down 17 cents for the day. It closed at $15.88 on Aug. 31.

Shanghai-based JA Solar Holdings Co. (Nasdaq: JASO,, which makes solar cells and other solar products, closed Oct. 20 at $2.14. It closed Aug. 31 at $3.66.


With Solar Power’s Future So Bright, Which Solar Stocks Are Oversold?

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,, 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,, 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,, 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, 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, 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, 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.

Is a Solar Shakeout on the Horizon?

Barron’s weighed in again March 14 on the outlook for solar stocks, and the news in most cases is not good. Under the headline “Should Solar Bulls Be Such Grumps?,” writer Tiernan Ray suggests that given the surging price of oil and the better-than-expected year-end results turned in by most solar companies, one might expect stock prices to be rising. But that’s not the case for the majority of the pack, other than the two best performers, First Solar and SunPower. With a $1.32 billion market cap, SunPower is just outside our $1 billion ceiling for smallcap stocks and of course First Solar is a solar giant with a more than $12 billion market cap.

For investors, the problems with solar stocks seem to be oversupply and the outlook for government subsidies in our current belt-tightening times. With governments all over the world ratcheting back, investors are concerned that those subsidies, which the young industry has relied on, will be among the cuts. Ray, however, suggests that might ultimately be a good thing. A global solar industry shakeout might help separate the good companies from the bad, he says.

Herb Greenberg of CNBC agrees. While solar stocks were “on fire” March 14 in the wake of the Japanese disaster and “headlines about nuclear uncertainties,” Greenberg and solar bear Gordon Johnson of Axiom Capital also warned about the expected cuts in solar subsidies. Japan had been expected to offset solar declines in Italy and France, but that may not occur given the serious issues related to the earthquake and tsunami.

Here are a few of the solar stocks we have been watching lately:

China-based JA Solar Holdings (Nasdaq:JASO, is a photovoltaic solar cell manufacturer that was up more than 6 percent March 14 on the Japan news to $6.69 but started to back off in after hours trading. JASO, with a market cap of about $1 billion, has been as high as $10.24 in the past 12 months but was one of several solar stocks downgraded by Piper-Jaffray, due in large part to concerns about future subsidies.

Marlboro, MA-based Evergreen Solar (Nasdaq: ESLR, uses its proprietary wafer manufacturing technology in its String Ribbon solar panels. ESLR has been struggling and, as noted in Barron’s, it has never made a profit and is facing a cash crunch, which prompted a recent sell rating from JP Morgan. The stock traded for more than $7.50 a year ago but has been on a downward slide ever since, closing March 14 at $1.68 a share.

The MAC Solar Energy Index (NYSEarca:TAN) is made up of common stocks, ADRs and GDRs and on March 14 had net assets of $188 million. As Greenberg notes, it was one of the solar stocks enjoying a run March 14 on the Japanese news but had fallen nearly 20 percent in recent weeks.

Ontario-based Canadian Solar (Nasdaq:CSIQ, manufactures and markets solar cells and solar module products in Canada and interntionally. CSIQ, which has a market cap of $461 million, was one of the “downstream” solar stocks hit by the Piper-Jaffray downgrade and it dropped 2.7 percent to $10.75 March 14. The stock has traded for as high as $26.26 in the past 12 months but is off its 12-month low of $8.99.

Solar Bear Tells Barron’s Outlook Is Cloudy

If you believe solar analyst Aaron Chew, the solar industry is in for a pretty major slowdown. At least that’s what he told Barron’s last week during a Q&A that ran under the headline: ‘Solar Outlook: Cloudy.’

Chew, who launched his solar coverage for Hapoalim Securities last July, lists oversupply and a retrenching of government programs as the culprits in the decline of the solar market and says Europe has been “the big driver of solar” for many years. He expects Germany’s solar installations to hit 6 gigawatts this year–more than Japan, the U.S., Italy and France have installed combined in all their histories. But during the next four months governement incentives will decline by double-digit percentages, taking the installation rates down with it.

On the supply side, along with declining installations comes the entrance of three large new players in the global solar market: Samsung, LG and Hyundai, which will ultimately push down solar prices, according to Chew. That may be good for homeowners and commercial installations but perhaps not so good for the profit margins of smallcap solar companies. A good place to check on the progress of the U.S. solar business is the Solar Power International conference set for Los Angeles Oct. 12-14 ( It’s considered the nation’s biggest and best conference each year.

We’ve been following the progress of several small cap solar firms for the past few years and, as is the case in most industries, some seem to be thriving while others struggle, based on the issues inside of each company.

Marlboro, MA-based Evergreen Solar (Nasdaq: ESLR, is one of those continuing to struggle and their issues have been well documented (, including the recent departure of their CEO. Evergreen’s stock, while trading relatively heavily (1.5 million shares a day on average) still languishes around 62 cents a share, not far from the 65 cents a share it was selling for when we last checked in early August.

China-based Renesola Ltd. (NYSE: SOL, also trades actively (nearly 2 million shares a day) and this week was selling for nearly $11.50 a share, just below its 52-week high of $12.10 (and way off 52-week low of $3.50), and nicely above our last check in early August. Back then SOL was selling in for about $7.35 range so perhaps, if you believe Chew, now might be the time to take some profits off the table.

Shanghai-based JA Solar (Nasdaq: JASO, has also been enjoying a good run. Back in early August the company’s market cap was $897 million and the stock price was in the mid-$5 range. This week the stock is in the mid0$8 range and its market cap has ballooned to $1.37 billion.

China-based Solarfun Power Holdings (Nasdaq: SOLF, is another solar company we are just beginning to watch. The company manufactures and sells photovoltaic cells and modules as well as silicon ingots and wafers, among other products. It’s relatively small (market cap $723 million) and currently trades at a bout $12.50 a share, right at the top of its 52-week range.