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
From Recession to an Ever-Deeper One - 19th Oct 20
Wales Closes Border With England, Stranded Motorists on Severn Bridge? Covid-19 Police Road Blocks - 19th Oct 20
Commodity Bull Market Cycle Starts with Euro and Dollar Trend Changes - 19th Oct 20
Stock Market Melt-Up Triggered a Short Squeeze In The NASDAQ and a Utilities Breakout - 19th Oct 20
Silver is Like Gold on Steroids - 19th Oct 20
Countdown to Election Mediocrity: Why Gold and Silver Can Protect Your Wealth - 19th Oct 20
“Hypergrowth” Is Spilling Into the Stock Market Like Never Before - 19th Oct 20
Is Oculus Quest 2 Good Upgrade for Samsung Gear VR Users? - 19th Oct 20
Low US Dollar Risky for Gold - 17th Oct 20
US 2020 Election: Are American's ready for Trump 2nd Term Twilight Zone Presidency? - 17th Oct 20
Custom Ryzen 5950x, 5900x, 5800x , RTX 3080, 3070 64gb DDR4 Gaming PC System Build Specs - 17th Oct 20
Gold Jumps above $1,900 Again - 16th Oct 20
US Economic Recovery Is in Need of Some Rescue - 16th Oct 20
Why You Should Focus on Growth Stocks Today - 16th Oct 20
Why Now is BEST Time to Upgrade Your PC System for Years - Ryzen 5000 CPUs, Nvidia RTX 3000 GPU's - 16th Oct 20
Beware of Trump’s October (November?) Election Surprise - 15th Oct 20
Stock Market SPY Retesting Critical Resistance From Fibonacci Price Amplitude Arc - 15th Oct 20
Fed Chairman Begs Congress to Stimulate Beleaguered US Economy - 15th Oct 20
Is Gold Market Going Back Into the 1970s? - 15th Oct 20
Things you Should know before Trade Cryptos - 15th Oct 20
Gold and Silver Price Ready For Another Rally Attempt - 14th Oct 20
Do Low Interest Rates Mean Higher Stocks? Not so Fast… - 14th Oct 20
US Debt Is Going Up but Leaving GDP Behind - 14th Oct 20
Dell S3220DGF 31.5 Inch VA Gaming Monitor Amazon Prime Day Bargain Price! But WIll it Get Delivered? - 14th Oct 20
Karcher K7 Pressure Washer Amazon Prime Day Bargain 51% Discount! - 14th Oct 20
Top Strategies Day Traders Adopt - 14th Oct 20
AMD is KILLING Intel as Ryzen Zen 3 Takes Gaming Crown, AMD Set to Achieve CPU Market Dominance - 13th Oct 20
Amazon Prime Day Real or Fake Sales to Get Rid of Dead Stock? - 13th Oct 20
Stock Market Short-term Top Expected - 13th Oct 20
Fun Stuff to Do with a Budgie or Parakeet, a Child's Best Pet Bird Friend - 13th Oct 20
Who Will Win the Race to Open a Casino in Japan? - 13th Oct 20
Fear Grips Stock Market Short-Sellers -- What to Make of It - 12th Oct 20
For Some Remote Workers, It Pays to Stay Home… If Home Stays Local - 12th Oct 20
A Big Move In Silver: Watch The Currency Markets - 12th Oct 20
Precious Metals and Commodities Comprehensive - 11th Oct 20
The Election Does Not Matter, Stick With Stock Winners Like Clean Energy - 11th Oct 20
Gold Stocks Are Cheap, But Not for Long - 11th Oct 20
Gold Miners Ready to Fall Further - 10th Oct 29
What Happens When the Stumble-Through Economy Stalls - 10th Oct 29
This Is What The Stock Market Is Saying About Trump’s Re-Election - 10th Oct 29
Here Is Everything You Must Know About Insolvency - 10th Oct 29
Sheffield Coronavirus Warning - UK Heading for Higher Covid-19 Infections than April Peak! - 10th Oct 29
Q2 Was Disastrous. But What’s Next for the US Economy – and Gold? - 9th Oct 20
Q4 Market Forecast: How to Invest in a World Awash in Debt - 9th Oct 20
A complete paradigm shift will make gold the generational trade - 9th Oct 20
Why You Should Look for Stocks Climbing Out of a “Big Base” - 9th Oct 20
UK Coronavirus Pandemic Wave 2 - Daily Covid-19 Positive Test Cases Forecast - 9th Oct 20
Ryzen ZEN 3: The Final Nail in Intel's Coffin! Cinebench Scores 5300x, 5600x, 5800x, 5900x 5950x - 9th Oct 20
How Soon Will We See Stock Market SPX 4000? - 8th Oct 20
Stock Market Spy ETF Testing March Price Peak – What Do the Charts Say? - 8th Oct 20
5 Consequences of US Debt at $50 Trillion - 8th Oct 20
Long Term Cycles Suggest Stock Price Reversion Pending & Gold Price About To Explode High - 8th Oct 20
AMD Zen 3 Ryzen 5000 Launch - Performance, Prices Skews, Cinebench r20 Scores, 5800x, 5900x, 5950x - 8th Oct 20
Gold vs. Silver – Absolutely No Comparison - 8th Oct 20
Gold: Why You Should Be Wary of the "Consensus" - 8th Oct 20
UK Covid-19 Hospital Admissions and Deaths Since Testing Positive in 28 days Analysis - 7th Oct 20
Amazon Prime Day 2020 Sales Top Tips of How To Get Big Savings! - 7th Oct 20
Want To Win Big In Forex Trading? Leverage Is Your Friend - 7th Oct 20
Why I am Voting for Donald J. Hitler - 6th Oct 20
Markets Chop & Grind: Gold, Stocks & Commodities - 6th Oct 20
Silver Price Great Buy Spot Ahead of Second Big Upleg - 6th Oct 20
Forget RTX 3080 Get Zen 3 Ryzen 5900x / 5950x - GPU vs CPU - PC Bottlenecking - 6th Oct 20
How to Get Budgies / Parakeets to Eat Vegetables for the First Time - 6th Oct 20
How to Pick a Reputable Double Glazing Window Company - 6th Oct 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Solar Power Market Emerging as a Sleeper in 2011

Commodities / Renewable Energy Feb 23, 2011 - 05:52 AM GMT

By: Money_Morning

Commodities

Best Financial Markets Analysis ArticleDavid Zeiler writes: Companies that manufacture solar power equipment had a great year in 2010 thanks to generous government subsidies. While 2011 may turn out to be a year of transition, most solar companies should do well and the long-term prospects for the industry are bright indeed.

Solar power installations worldwide increased 120% in 2010 with 16 gigawatts added, up from 7 gigawatts added in 2009. That brought total capacity to 40 gigawatts, still just 0.2% of the world's electricity generation in 2010. That leaves a lot of room for growth.


The rate of growth will slow in 2011 - the world will install 22.2 gigawatts this year, an increase of 39.3% over 2010, according to projections by IHS iSuppli (NYSE: IHS) - but increasing activity in the United States and China should re-ignite the market.

The European Photovoltaic Industry Association said in a report earlier this month that by 2015 it expects global investment in solar panels to roughly double from $46 billion in 2010.

Until recently, most of the growth in solar power installations was coming from Europe, led by Germany. In fact, Germany alone consumed almost half of the world's solar panels in 2010. Europe as a whole accounted for more than 80% of the global solar panel market, $65 billion worth of business.

Of course, that pattern figures to start shifting in 2011.

The Shifting Solar Landscape
The primary engine driving solar panel adoption in Europe has been extensive government subsidies.

However, Germany, Spain, and France started cutting back on the subsidies in 2010, partly because of increasing budget constraints and partly because they were working too well - the subsidies encouraged an excessive number of projects. France imposed a three-month freeze on projects in December after getting swamped with up to 3,000 applications per day.

China has lagged in deploying the technology as it studies the European model. China last year accounted for only 3% of the global solar panel market as a purchaser, even though it produces about half of the equipment sold.

"China is definitely playing a longer game in solar," Daniel Guttmann, head of renewable energy strategy at PricewaterhouseCoopers LLP inLondon, told Bloomberg News. "It has done a lot to subsidize its manufacturers."

The Chinese government, via the China Development Bank, approved $19 billion in loans for companies involved in the manufacture of solar panels just in the last six months of 2010. The strategy, apparently, is to reduce the cost of the technology before investing heavily in building solar power facilities. Still, China expects to add 20 gigawatts of solar power by 2020.

Another key hurdle preventing more rapid adoption of solar power is that the cost to generate it still exceeds that of more traditional energy sources. Though the cost of solar power continues to fall, it won't become a truly attractive alternative until it reaches so-called "grid parity."

Still, some companies, such as AU Optronics (NYSE: AUO), are investing now with the expectation of cashing in down the road. AU, in a joint venture with SunPower Corporation (Nasdaq: SPWRA), is building a $1.3 billion solar cell plant in Malaysia. Likewise, Taiwan Semiconductor Mfg. Co. Ltd. (NYSE ADR: TSM) is building a solar cell facility in Taiwan.

"Over these two or three years, there will still be a lot of dynamic changes in the industry [structure], but after that, the market will be more mature," James Chen, the head of AU Optronics' solar business, told the Financial Times. Chen added that he thinks the entry of larger tech companies such as Samsung Electronics (PINK: SSNLF) and Hon Hai Precision Industries (PINK: HNHPF) into solar could hasten the arrival of grid parity.

Until then, the solar industry will remain largely dependent on government subsidies to drive growth. But with Europe scaling back and China holding off, only the United States can provide any short-term kick to the solar market.

A Brighter Future
Some recent positive developments hint that the U.S. market could accelerate this year. U.S. President Barack Obama designated $8 billion for clean energy research in his 2012 budget (though deficit-conscious Republicans in the U.S. House of Representatives may well slash that) and the state of California is close to requiring that utilities generate a third of their power from renewable sources.

And the European Photovoltaic Industry Association report predicts that the United States will overtake Germany as the world's top solar customer in 2014.

"While it makes sense on paper that the second half of 2011 will be weaker, there is a good chance that something could surprise us: that could well be the U.S.," Commerzbank analyst Ben Lynch told Reuters.

If any dark clouds lurk on the solar power horizon, the stocks of the companies that make the equipment haven't noticed. Two companies that reported earnings within the past week, San Jose-based SunPower and China's Yingli Green Energy Hold. Co. Ltd. (NYSE ADR: YGE) both beat estimates and gave positive outlooks for 2011.

In fact, the stocks of solar companies have done very well in recent months, rising about 30% on average heading into earnings. Yet even with those gains, most solar stocks are far below highs reached in late 2008 and early 2009.

"Things look pretty good for the solar market as we enter the first half of the year," Auriga USA analyst Mark Bachman told Reuters. "Italy and the U.S. are starting to pick up all of that slack in Germany right now. That adds an air of bullishness."

A few companies of interest include:

Yingli Green Energy: Yingli gained a foothold in the U.S. market by signing a deal to supply San Diego developer Borrego Solar with photovoltaic modules. The company reported last week that it expects shipments to increase 60% in 2011.

SunPower: SunPower should benefit from having projects already underway in Italy, which is expected to grandfather existing projects even if the country tightens policy on solar power subsidies. The company recently opened a manufacturing facility in California to exploit increasing U.S. demand.

Trina Solar (NYSE: TSL): A China-based company with a global footprint, Trina Solar is investing $800 million in a solar cell park in China. Trina's CEO has said he expects 30% growth for 2011, including a doubling of business with the U.S.

Suntech Power Holdings (NYSE: STP): Suntech is expected to ship 1.5 gigawatts of equipment in 2011, which would make it first among all solar suppliers. The company is working on a low-cost technology that would increase solar cell efficiency, a major goal within the industry. Suntech is also active in the growing U.S. market.

Solar ETFs include Claymore/MAC Global Solar Index (NYSE: TAN) and Market Vectors Solar Energy (NYSE: KWT).

Source : http://moneymorning.com/2011/02/23/...

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - 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