Solar's May See a Cloudy 2010 - Barron's (ESLR, ENER)
According to Barron's today, the solar sector outlook is mostly cloudy, with a slight chance of positive growth.
Though the sector had a horrendous 2009, 2010 may not be too much better. In 2009, Spain put a cap on its lucrative solar subsidy, hushing demand. The industry refused to believe this, however, with exuberant expansion throughout the year.
Prices on modules collapsed about 50%, and polysilicon down to $45 from $400 per kilo.
In 2010, Germany will also follow in Spain's footsteps as they will be capping their subsidiary. In response, companies are now rushing to finish their projects ahead of deadlines.
The boost in production for polysilicon, wafers, cells, and modules will saturate the market for years to come.
An analyst at Lux Research sees growth, with revenues jumping to $77 billion in 2015 from $39 billion today. The increase, however, will come at a slower pace than production, leading to further reduction in pricing.
Capacity in the U.S. also reached 14-GW in 2009, above the 8.9-GW currently demanded. The analyst at Lux thinks that demand won't reach 19-GW until 2013, and more capacity is expected to come online before then.
The Lux analyst sees Evergreen Solar (NASDAQ: ESLR) and the Uni-Solar division of Energy Conversion Devices (NASDAQ: ENER) as vunerable targets to collapse, as well as several companies overseas.
He also notes that the Czech Republic recently suspended further installations of solar power after power spikes made the entire system unstable. While they may have a low-quality post-Communist grid, set-ups in the U.S. are in not much better shape.
Though the sector had a horrendous 2009, 2010 may not be too much better. In 2009, Spain put a cap on its lucrative solar subsidy, hushing demand. The industry refused to believe this, however, with exuberant expansion throughout the year.
Prices on modules collapsed about 50%, and polysilicon down to $45 from $400 per kilo.
In 2010, Germany will also follow in Spain's footsteps as they will be capping their subsidiary. In response, companies are now rushing to finish their projects ahead of deadlines.
The boost in production for polysilicon, wafers, cells, and modules will saturate the market for years to come.
An analyst at Lux Research sees growth, with revenues jumping to $77 billion in 2015 from $39 billion today. The increase, however, will come at a slower pace than production, leading to further reduction in pricing.
Capacity in the U.S. also reached 14-GW in 2009, above the 8.9-GW currently demanded. The analyst at Lux thinks that demand won't reach 19-GW until 2013, and more capacity is expected to come online before then.
The Lux analyst sees Evergreen Solar (NASDAQ: ESLR) and the Uni-Solar division of Energy Conversion Devices (NASDAQ: ENER) as vunerable targets to collapse, as well as several companies overseas.
He also notes that the Czech Republic recently suspended further installations of solar power after power spikes made the entire system unstable. While they may have a low-quality post-Communist grid, set-ups in the U.S. are in not much better shape.
You May Also Be Interested In
- Siliconware Precision (SPIL) Shares Drop on Volatility Spike
- EUR/CHF Spike Remains Mystery
- Savient Pharma (SVNT) Moves Higher with Volatility; Bumps Up Against Key Resistance Point
Create E-mail Alert Related Categories
Insiders' BlogRelated Entities
UBS, Barron'sSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
