Solar Stocks Dim as Strong Q4 Outlook Not Expected to Cure Oversupply Issues
Stocks in the Solar sector are trading lower Monday morning following a bearish report on oversupply issues in the industry. The Claymore/MAC Global Solar ETF (NYSE: TAN) is down 2.5 percent in early action.
According to Digitimes, many upstream and downstream solar firms are currently in pricing negotiations, with the most important factor being the price of polysilicon.
Digitimes notes integrated solar maker GCL-Poly may reduce the price of solar wafers to meet market demand. Firms without the capability to produce wafers and cells in-house will be at a disadvantage.
Industry observers see fourth-quarter demand improving sequentially, mostly due to "last minute" installations as incentives and subsidies are expected to drop off in 2012. Despite the increased demand, observers expect oversupply issues to linger amid global economic issues.
Financial institutions which would normally loan out to wafer producers are feeling the pinch from debt crises in Europe and the U.S. Due to this, firms are only willing to issue 90 percent of a loan when construction is done and the installation is running, with the final 10 percent on a six-month hold, putting many firms in a precarious situation.
Trina Solar (NYSE: TSL) and JA Solar (NYSE: JASO) shares are leading the group lower, both down over 3 percent.
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According to Digitimes, many upstream and downstream solar firms are currently in pricing negotiations, with the most important factor being the price of polysilicon.
Digitimes notes integrated solar maker GCL-Poly may reduce the price of solar wafers to meet market demand. Firms without the capability to produce wafers and cells in-house will be at a disadvantage.
Industry observers see fourth-quarter demand improving sequentially, mostly due to "last minute" installations as incentives and subsidies are expected to drop off in 2012. Despite the increased demand, observers expect oversupply issues to linger amid global economic issues.
Financial institutions which would normally loan out to wafer producers are feeling the pinch from debt crises in Europe and the U.S. Due to this, firms are only willing to issue 90 percent of a loan when construction is done and the installation is running, with the final 10 percent on a six-month hold, putting many firms in a precarious situation.
Trina Solar (NYSE: TSL) and JA Solar (NYSE: JASO) shares are leading the group lower, both down over 3 percent.
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TAN
Jack Williamson on Sep 26, 2011 12:10 PMMark as Spam
I'm watching this for a bottom; in the long run, the world needs solar, there might be considerable opportunity here in the long run. But patience will be of essence.