Shares of JA Solar (NASDAQ:JASO), Jinko Solar (NYSE:JKS), SunPower Corporation (NASDAQ:SPWRA) and China Sunergy (NASDAQ:CSUN) all closed mixed Friday as the solar sector continues to be under immense pressure in relationship to financing concerns and legitimate demand.
With America facing its own sovereign debt crisis, masked by the seemingly endless amount of new money thrown at the economy by the Federal Reserve, the solar industry in the country is facing more uncertainty, as lawmakers look to make budget deals, which could cut financing from the U.S. Department of Energy for the sector.
That was after First Solar (FSLR) alleged they were told by the Department of Energy they were still being considered for financial assistance to construct three major solar plants in the country.
Funding challenges also face the international solar industry as many countries continue to struggle with the lack of capital to artificially prop up the industry.
It's widely known that the Italian has cut back on support for the solar industry, but German Chancellor Angela Merkel suggested on Friday her country needs to take a another look at feed-in tariffs again, saying they may be too high. Germany and Italy have been the two leading markets for solar.
A lot of focus has been on the removing of subsidies from the big oil companies, but in fact we need to have all energy subsidies removed across the board and the let the free market decide how it wants to produce and consume energy and electricity, not politicians.
JA Solar (JASO) closed Friday at $6.16, dropping $0.21, or 3.30 percent.
Monday, May 16, 2011
JA Solar (JASO) (JKS) (SPWRA) (CSUN) Under Pressure on Financing Uncertainty
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1 comment:
Chinese govt has vision and their culture is related to "NINJA" or "Samurai" thinking. Their endurance is much higher than that of West. With the Chinese manufacturing base, raw material in abundance, they can drive down the operating cost and boost the margins of Solar stocks. It is very difficult for any country to match Chinese operating cost in Solar industry. Chinese, themselves are planning to increase their own purchases of Solar energy to more than 50GW in few years. After all, it is clean energy. If we take away all the subsidies for all energies(coal, gas,nuclear), and the rate at which Chinese companies are reducing their operating cost, Solar industry from China will dominate the world.
Please do not forget that same Chinese companies have been supplying to all Dolllar Stores, Walmarts, Best Buys of America for much lesser prices for over 25 years, despite there was more than 5% to 9% inflation in China. When it comes to exports, Chinese never compromized to reduce their operating profits and gain the market share. We in the West may not compromise for the profit with lack of deep vision of future business, but not Chinese companies. I am very "long" on Chinese Solar investments. They have over couple of trillion dollars of capital to support their own companies in high tech and gain the market share from West. Take a look the history. In the first round of expansion, Germany and Japan took the market share from USA and UK. In the second round, Korea, Singapore and few other small countries took the market share.In the final round, China, India and Brazil with too much capital in their hands are taking the market share. When we are busy in balancing our budgets(USA Inc, state level and county level), they are very busy in gaining the market share.
Hence, I suggest to have little faith on China.. Where do you find companies growing at 60 to 70% and PE of 3 to 7?
I would keep on accumulating the Chinese Solar stocks.
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