Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Stock Market Minor Correction Due - 13th Apr 21
How to Feed Budgies Cucumbers - Best Vegetables Feeding for the First Time, Parakeet Care UK - 13th Apr 21
Biggest Inflation Threat in 40 Years Looms over Markets - 13th Apr 21
How to Get Rich with the Pareto Distribution - Tesco Example - 13th Apr 21
Litecoin and Bitcoin-Which Is Better? - 13th Apr 21
The Major Advantages Of Getting Your PhD Online - 12th Apr 21
Covid-19 Pandemic Current State for UK, US, Europe, Brazil Vaccinations vs Lockdown's Third Wave - 12th Apr 21
Why These Stock Market Indicators Should Grab Your Full Attention - 12th Apr 21
Rising Debt Means a Weaker US Dollar - 12th Apr 21
Another Gold Stocks Upleg - 12th Apr 21
AMD The ZEN Tech Stock - 12th Apr 21
Overclockers UK Build Quality - Why Glue Fan to CPU Heat sink Instead of Using Supplied Clips? - 12th Apr 21 -
What are the Key Capabilities You Should Look for in Fleet Management Software? - 12th Apr 21
What Is Bitcoin Gold? - 12th Apr 21
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21
The History of Bitcoin Hard Forks - 10th Apr 21
Gold Mining Stocks: A House Built on Shaky Ground - 9th Apr 21
Stock Market On the Verge of a Pullback - 9th Apr 21
What Is Bitcoin Unlimited? - 9th Apr 21
Most Money Managers Gamble With Your Money - 9th Apr 21
Top 5 Evolving Trends For Mobile Casinos - 9th Apr 21
Top 5 AI Tech Stocks Investing 2021 Analysis - 8th Apr 21
Dow Stock Market Trend Forecast 2021 - Crash or Continuing Bull Run? - 8th Apr 21
Don’t Be Fooled by the Stock Market Rally - 8th Apr 21
Gold and Latin: Twin Pillars of Western Rejuvenation - 8th Apr 21
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II - 8th Apr 21
You're invited: Spot the Next BIG Move in Oil, Gas, Energy ETFs - 8th Apr 21
Ladies and Gentlemen, Mr US Dollar is Back - 8th Apr 21
Stock Market New S&P 500 Highs or Metals Rising? - 8th Apr 21
Microsoft AI Azure Cloud Computing Driving Tech Giant Profits - 7th Apr 21
Amazon Tech Stock PRIMEDAY SALE- 7th Apr 21
The US has Metals Problem - Lithium, Graphite, Copper, Nickel Supplies - 7th Apr 21
Yes, the Fed Will Cover Biden’s $4 Trillion Deficit - 7th Apr 21
S&P 500 Fireworks and Gold Going Stronger - 7th Apr 21
Stock Market Perceived Vs. Actual Risks: The Key To Success - 7th Apr 21
Investing in Google Deep Mind AI 2021 (Alphabet) - 6th Apr 21
Which ETFs Will Benefit As A Stronger US Dollar Reacts To Global Market Concerns - 6th Apr 21
Staying Out of the Red: Financial Tips for Kent Homeowners - 6th Apr 21
Stock Market Pushing Higher - 6th Apr 21
Inflation Fears Rise on Biden’s $3.9 TRILLION in Deficit Spending - 6th Apr 21
Editing and Rendering Videos Whilst Background Crypto Mining Bitcoins with NiceHash, Davinci Resolve - 5th Apr 21
Why the Financial Gurus Are WRONG About Gold - 5th Apr 21
Will Biden’s Infrastructure Plan Rebuild Gold? - 5th Apr 21
Stocks All Time Highs and Gold Double Bottom - 5th Apr 21
All Tech Stocks Revolve Around This Disruptor - 5th Apr 21
Silver $100 Price Ahead - 4th Apr 21
Is Astra Zeneca Vaccine Safe? Risk of Blood Clots and What Side Effects During 8 Days After Jab - 4th Apr 21
Are Premium Bonds A Good Investment in 2021 vs Savings, AI Stocks and Housing Alternatives - 4th Apr 21
Penny Stocks Hit $2 Trillion - The Real Story Behind This "Road to Riches" Scheme - 4th Apr 21
Should Stock Markets Fear Inflation or Deflation? - 4th Apr 21
Dow Stock Market Trend Forecast 2021 - 3rd Apr 21
Gold Price Just Can’t Seem to Breakout - 3rd Apr 21
Stocks, Gold and the Troubling Yields - 3rd Apr 21
What can you buy with cryptocurrencies?- 3rd Apr 21
What a Long and Not so Strange Trip it’s Been for the Gold Mining Stocks - 2nd Apr 21
WD My Book DUO 28tb Unboxing - What Drives Inside the Enclosure, Reds or Blues Review - 2nd Apr 21
Markets, Mayhem and Elliott Waves - 2nd Apr 21
Gold And US Dollar Hegemony - 2nd Apr 21
What Biden’s Big Infrastructure Push Means for Silver Price - 2nd Apr 21
Stock Market Support Near $14,358 On Transportation Index Suggests Rally Will Continue - 2nd Apr 21
Crypto Mine Bitcoin With Your Gaming PC - How Much Profit after 3 Weeks with NiceHash, RTX 3080 GPU - 2nd Apr 21
UK Lockdowns Ending As Europe Continues to Die, Sweet Child O' Mine 2021 Post Pandemic Hope - 2nd Apr 21
A Climbing USDX Means Gold Investors Should Care - 1st Apr 21
How To Spot Market Boom and Bust Cycles - 1st Apr 21
What Could Slay the Stock & Gold Bulls - 1st Apr 21
Precious Metals Mining Stocks Setting Up For A Breakout Rally – Wait For Confirmation - 1st Apr 21
Fed: “We’re Not Going to Take This Punchbowl Away” - 1st Apr 21
Mining Bitcoin On My Desktop PC For 3 Weeks - How Much Crypto Profit Using RTX 3080 on NiceHash - 31st Mar 21
INFLATION - Wage Slaves vs Gold Owners - 31st Mar 21
Why It‘s Reasonable to Be Bullish Stocks and Gold - 31st Mar 21
How To Be Eligible For An E-Transfer Payday Loan? - 31st Mar 21
eXcentral Review – Trade CFDs with a Customer-Centric Broker - 31st Mar 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Safe Solar Havens - What You Dont Expect Wont Happen

Commodities / Solar Energy Mar 29, 2013 - 06:12 PM GMT

By: Andrew_McKillop


On March 29 Bloomberg told its readers that Germany’s solar industry "is set to benefit from the financial crisis in Cyprus as investors seek a haven in the guaranteed returns provided by clean-energy plants". It cited a small German firm called Milk the Sun GmbH (more appropriately Milk the Pigeons Unlimited) which claims it is now deluged with investor requests for advice on placements in the "sensitive range" of 100 000 euros and up.

European zombie media has been loyally maintaining the storyline that in Cyprus the so-called tax, or in fact theft of deposits would only operate on accounts holding more than 100 000 euros.

This propaganda can be put to rest right away. This carefully maintained lie, still being bleated on 29 March by (for example) French state-owned media and its partner news outlets owned by big business friends of the State, round the clock, is decorated by the storyline that the Cypriot cash confiscation primarily affects rich, tax-evading Russians.

These are in fact about the last and least to have been affected, due to "capital control breaches" being organized, more than a week ago, to Help the Rich. One choice target for theft has been small and medium-size businesses with net working capital held in Cypriot banks,  which is now gone forever to feed the creepingly insolvent Euro-monster.

As we know or can find out, round the clock from crony media in Europe, Cyprus is a highly special case, like Greece was, and Slovenia will be. Bank deposits elsewhere are sacred. Even Queen of Hearts Merkel feels obliged to have German media "reiterate her four-and-a-half year old pledge" to guarantee bank savings deposits. Now we asked to believe that following Cyprus, there will be a "flight to quality" bringing funds to Germany’s solar industry.

Q Cells as recently as 2010 was not only Germany's biggest producer of solar PV equipment, but the world's largest, fattened on generous government electric power feed-in tariff subsidies, by federal and local government aid and subsidies, and almost unlimited investor enthusiasm. Q-Cells filed for insolvency on April 3, 2012, at the insolvency court in Dessau. The executive board reached the decision after its review of alternatives for financial restructuring came to no avail. A very heavily downsized Q Cells was finally bought-out by South Korea's Hanwha Group. Relative to its peak stock exchange value in 2007-2008, its final 2012 share price value of 9 euro cents resulted in a total or maximum loss of shareholder value estimated by analysts at around 8 billion euros ($10.5 billion).

Q Cells was replaced by China's Suntech as the national, and the world's biggest producer of solar PV equipment. On March 21, 2013 the Wuxi Municipal Intermediate People's Court in Jiangsu Province officially accepted the petition for insolvency and restructuring of Suntech Power Holdings Co. As at present, the exact amount of losses are conjectural and depend on the restructuring or break-up of the company, which has already sold its Arizona, US subsidiary. To date, net losses only on defaulted debt notes of the company are about $1 billion. IHS Solar and other industry analysts explain that Suntech's insolvency, exactly like Q Cells' crash, was due to an inexorable cost squeeze between falling prices for whole systems, modules, and unit cells, while finished wafer costs despite lower silicon costs remained stubbornly high. Loss of government subsidies and in Suntech's case trade disputes with the US then sealed the fate of these former giants.

Today however, Bloomberg tells us that Germans with savings of more than 100 000 euros, concerned because of what has happened in Cyprus, would "rather put their money in renewable energy plant", with supposedly "guaranteed returns" than leave it in the bank or invest it in stocks. We could or might suggest they buy gold bars (without the titanium infilling), if they want to lose less than they will lose dabbling in solar energy investor plays.

The Cyprus crisis has surely and certainly reduced trust in the euro, and this distrust may be especially strong in Germany for historical reasons. In theory, this should fuel a flight into material assets, but the current situation is far more complex than this easy one-liner readout suggests. One immediate and real problem, for this "conventional readout", is that the Cyprus theft or "confiscation" of savings and of small business working capital has increased public concern that bank savings accounts may be unsafe, further limiting investment options. Operating an investor account and holding, selling and buying shares firstly needs a bank account. To be sure, you can visit your broker with a bag of gold filings, dust or coins but this will be a tiresome and probably expensive way to run your investor account!

The Bloomberg article talking up the "solar security option", or at least what it says now applies in Germany, claimed that even "elderly people from rural areas" are now being moved to invest in solar energy, but the article quoted a German retail solar equipment dealer as saying there are also "other reasons". These in particular include the rising cost of electricity in Germany - and the approach of Spring and then Summer!

Showing the woeful quality of investor advice in this renewable energy domain, in Germany, buyers of solar equipment prefer to buy plants in Germany, and make a point of avoiding purchases in countries such as Spain or Italy. In both these countries, and in Portugal and Greece however, the quantity of distressed assets in the solar energy sector is massive. Per-kilowatt prices of recently installed but now uneconomic equipment are often 33% to 50% less than in Germany - despite its solar industry rout!

The reason is "perceived investor risk", which due to the Eurozone crisis and its latest, most extreme manifestation in Cyprus, has become political risk. Much more important and other than the smart option of purchasing the distressed assets in the solar domain, which also exist in windpower, and shipping the equipment out of Europe to back out oil-fired power production, Germans believe that current feed-in tariffs favouring solar PV and windpower will remain intact, or only slowly decrease. They believe that the sudden, almost total abandonment of feed-in tariffs in Spain, in particular, signals almost continent-wide scaling back of feed-in tariffs - but not in Germany. This belief may well be a massive mistake.

Solar energy is a decreasingly good investment in Europe, especially northern Europe, and the easy years of exaggerated returns are over. Believing the Bloomberg storyline would have been easier if Bloomberg had published it on April 1st, as an April Fool's Day piece of investor advice!

By Andrew McKillop


Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Co-author 'The Doomsday Machine', Palgrave Macmillan USA, 2012

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2013 Copyright Andrew McKillop - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisor.

Andrew McKillop Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules